9911796707
TMI Blog2024 (10) TMI 834X X X X Extracts X X X X X X X X Extracts X X X X ..... red under Section 218 of the Insolvency and Bankruptcy Code, 2016 - "the Code", appointed an Investigating Authority - "IA" to conduct investigation in the matter of the CD. After receipt of the Investigation Report, the IBBI on 11th July 2023 issued a show cause notice to the petitioner raising two grounds, namely, lack of due diligence while verifying the Resolution Plan of the CD and non-intimation of the claim of Kanoria Chemicals & Industries Limited - "KCIL" despite being aware of the partial admission of its claim. It was stated in the show cause notice that the IA had issued a notice of investigation to the petitioner on 29th April 2023 seeking his response. The petitioner through his written submissions dated 11th May 2023 and 19th May 2023 replied to the same. The IA submitted its investigation report to the IBBI and on that basis, the aforesaid show cause notice was issued alleging contravention of the provisions of Section 30 (2) (b) and (e), 208 (2) (a) and (e) of the Code as well as the Regulations framed in that regard. 3. The petitioner on 24th July 2023 submitted his reply to the show cause notice and denied the assertions made therein. Virtual hearing took place ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e proceeded to take action against the petitioner was without legal basis and thus was liable to be set aside. It was then submitted that the period of suspension of one year was not at all justified in the facts of the case. The Disciplinary Committee failed to consider the reason and need to suspend registration of the petitioner for a period of one year. Referring to the decision in Ranjit Thakur Vs. Union of India and Ors., (1987) 4 SCC 611, it was submitted that suspension of the petitioner from functioning as a Resolution Profession was harsh and disproportionate, thus requiring interference. A reference was also made to the decisions in Writ Petition (Lodging) No.19031 of 2023 (Vishal Ghisulal Jain Vs. Union of India and Ors.) decided on 7th August 2023 and Writ Petition (Lodging) No.28206 of 2023 (Partha Sarathy Sarkar Vs. Insolvency & Bankruptcy Board of India (IBBI) & Ors.), decided on 17th October 2023. It was thus submitted that taking an overall view of the matter, there was no case made out to suspend the registration of the petitioner as RP. Hence, the order passed by the Disciplinary Committee on 12th August 2024 was liable to be set aside. 5. Mr. Pankaj Vijayan, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Operational Creditor, KCIL and thereafter admitting the full claim amount, the petitioner as RP did not raise any objection to zero provisioning of KCIL. The second ground on which the show cause notice was issued was the non-intimation of the claim of KCIL by failing to reply to the specific queries made by it to the RP. Reference was made to the investigation report that was the basis for issuance of the show cause notice. Then the petitioner's response was called for. The petitioner replied to the aforesaid show cause notice on 24th July 2023 denying all the allegations made in the show cause notice. After granting the petitioner an opportunity of hearing, which he availed virtually, the Disciplinary Committee passed its order on 12th August 2024 suspending the petitioner's registration with the IBBI for a period of one year. We may note that there is no challenge raised by the petitioner as regards non-compliance of the principles of natural justice while adjudicating the show cause notice. Due notice along with all relevant material was given to him and after the petitioner submitted his reply, he was heard before the impugned order of suspension was passed. We would therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the claim of KCIL had not been admitted. The NCLAT gave the benefit of doubt to the petitioner on the premise that in view of the change in RP, it was likely that all documents and papers were not transferred from the earlier IRP to the petitioner. Despite aforesaid, it noted that the petitioner as RP had failed to take necessary follow-up despite various e-mails received and thus recorded a finding that the petitioner as RP had failed in his duty under the CIRP Regulations. 8. The NCLAT further found that the petitioner as RP had failed in his duty in pointing out objectional comments made by the Successful Resolution Applicant - "SRA" which had proceeded to examine in detail the arbitration proceedings on the basis of which an award was passed in favour of the KCIL. The SRA proceeded to comment on the arbitration award as being void ab initio and the entire process of making the award being defective and unlawful. It was found that the petitioner as RP ought to have taken note of these comments while examining the Resolution Plan. By failing to point out such objections and comments when the Resolution Plan was placed for consideration before the Committee of Creditors and the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to object to the proposal submitted by the SRA on the ground that it included comments as well as legal analysis of the arbitration process wherein an award was passed in favour of KCIL. It found that it was not open for the SRA to term the award as void ab initio or unlawful. In spite of receiving the legal opinion dated 13th July 2020 wherein it was stated that such comments by the SRA ought not to have been made, the petitioner as RP failed to take cognizance of the same. This conduct of the RP has thus been found to be in contravention of the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016. As regards inaction on the part of the petitioner as RP to indicate the precise amount of claim admitted by him, the observations of the NCLAT in paragraph 20 form the basis for holding that the petitioner failed to act in accordance with Regulation 13 (2) (a) and (d) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. In our view, the Disciplinary Committee has proceeded to take necessary action based on the observations of the NCLAT, which the petitioner did not challenge. The findi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
