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TMI Blog2024 (11) TMI 735X X X X Extracts X X X X X X X X Extracts X X X X ..... ms of the merits of the case must necessarily be only on a prima facie basis. Time Limitation - Regulation 3(4) of the IBBI (Grievance and Complaint Handling Procedure) Regulations, 2017 - HELD THAT:- The Regulation clearly stipulates that a complaint must be filed within forty-five days of the occurrence of the cause of action. A complaint filed after the aforesaid period can be entertained only if there are sufficient reasons justifying the delay, but such period shall not exceed 30 days. Thus, the proviso to Regulation 3(4) indeed sets a strict time limit for filing a complaint, hence, the critical issue here is determining when the cause of action for the grievance or complaint actually arose. In the instant case, the allegations against the Petitioner in the Show Cause Notice dated 2 nd April, 2024 are serious and revolve around the improper constitution and functioning of the CoC. Specifically, it is alleged that Axis Bank, a Financial Creditor of the corporate debtor, had not filed its claim at the time, yet the Petitioner proceeded to form a CoC comprising only the sole operational creditor - the Petitioner took no action to notify Axis Bank about the initiation of the CIRP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Senior Counsel for Petitioner, presses for stay of the impugned order dated 30th July, 2024 passed in Complaint No. COMP11011/43/2023/IBBI, whereby the Disciplinary Committee of Insolvency and Bankruptcy Board of India IBBI , while exercising powers under Section 220(2) of the Insolvency and Bankruptcy Code, 2016 IBC read with Regulation 11 of the IBBI (Insolvency Professionals) Regulations, 2016 IBBI IP Regulations , have suspended the registration of the Petitioner as an insolvency professional for the period of one year. FACTS AND CONTENTIONS OF THE PETITIONER: 7. Mr. Krishnan has raised three primary jurisdictional objections in support of his request for grant of interim relief. He puts forth the following facts and contentions: 7.1. The impugned order fails to adequately consider the preliminary objections raised by the Petitioner concerning the maintainability of the Show Cause Notice SCN dated 2nd April, 2024. These objections were summarily dismissed without a substantive examination of the merits of the case. Such omission reflects a failure to engage with the foundational jurisdictional challenge, which is crucial to determining the validity of the proceedings initiate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e purported cause of action from which the limitation period could be accurately calculated. This dual failure renders the complaint fatally flawed from a procedural standpoint. 7.6. This objection was specifically raised in the reply; however, the impugned order reflects no application of mind on the same and the said objection has been rejected summarily without giving any reasoning. 7.7. The Disciplinary Committee comprising of only one member Mr. Sudhaker Shukla, Whole Time Member, IBBI does not have the jurisdiction to pass the impugned order. Section 220(1) of the IBC explicitly stipulates that the Disciplinary Committee shall consist of whole time members (plural). Thus, undeniably the legislative intent of the IBC contemplates that the Disciplinary Committee should comprise of at least two whole-time members. ANALYSIS AND FINDINGS: 8. The Court has carefully considered the contentions presented by the parties. It is important to note that the amended writ petition is exhaustive and voluminous, raising numerous grounds of challenge. Given the breadth and complexity of these issues, it is neither practical nor appropriate to adjudicate them fully at this interim stage. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not extend beyond the date of approval of the Resolution Plan on 16th January 2021. However, the Court is not convinced by this argument. 12. It has been pointed out that the first alleged contravention against the Petitioner pertains to the malafide constitution of the CoC. This raises a significant question regarding the timeline of the cause of action; whether it is tied solely to the date of the Resolution Plan s approval, or whether subsequent events or discoveries could have given rise to a new cause of action. The resolution of this issue is crucial, as it impacts the applicability of the limitation period under Regulation 3(4). 13. In the instant case, the allegations against the Petitioner in the Show Cause Notice dated 2 nd April, 2024 are serious and revolve around the improper constitution and functioning of the CoC. Specifically, it is alleged that Axis Bank, a Financial Creditor of the corporate debtor, had not filed its claim at the time, yet the Petitioner proceeded to form a CoC comprising only the sole operational creditor. Furthermore, it is urged that during the very first meeting of the CoC, major decisions were taken including the appointment of the Petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter the approval of the Resolution Plan by CoC, until the process is fully and finally completed. 15. It must also be noted that the regulation in question, i.e., Regulation 3(4) of the IBBI (Grievance and Complaint Handling Procedure) Regulations, 2017, does not refer to the date of approval of the resolution plan by the CoC, but is instead linked to the occurrence of the cause of action, allowing for flexibility regarding determination of the limitation period. 16. Given that the CIRP proceedings are ongoing and the complaint against the Petitioner relates to a fundamental aspect of the process the constitution of the CoC the Court is of the view that the complaint cannot be dismissed as time-barred. It would be contrary to the objectives of the IBC to disregard serious allegations of procedural misconduct simply because they were raised after the approval of the Resolution Plan by CoC, especially when the CIRP itself has not yet reached its finality. 17. As regards the Petitioner s contention that the complainant did not meet the criteria of an aggrieved party or stakeholder as defined in the Regulations, the Court, prima facie, is not persuaded by this argument. This is becaus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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