A Disciplinary Committee (DC) of the Insolvency and Bankruptcy Board of India, ordered probation to Insolvency Resolution Professional Mr. Prateek Kathuria for delay in handing over documents to the newly appointed Insolvency Resolution Professional. He was directed to undergo a 50 hours pre-registration educational course. Additionally, direction to work as probationer for four months with other experienced IP so nominated by his IPA under which he is registered was also given.
The Authorization for Assignment (AFA) was also suspended and he was also forbidden from undertaking any fresh assignment as an Insolvency Professional.
The DC noted that handing over the documents with a considerable lag by Mr. Prateek Kathuria is a serious cointervention which should have been avoided at any cost.
It was also observed that “he should have been careful and vigilant in his conduct as IRP and should have been careful and prompt in forwarding documents of the Corporate Debtor (CD) to newly appointed IRP. The delay in transferring documents causes delay in the process and leads to value erosion of CD”.
The Section 23(3) of the Code provides that in case of any appointment of a resolution professional under sub-sections (4) of section 22, the IRP shall provide all the information, documents and records pertaining to the CD in his possession and knowledge to the resolution professional.
The Board observed that Mr. Prabhat Ranjan Singh vide email dated 06.04.2022 followed by reminder email dated 08.04.2022 requested Mr. Prateek Kathuria to hand over the various records, information, documents as per the directions of AA’s order dated 04.04.2022. However, vide email dated 09.04.2022 Mr. Prateek Kathuria replied to him that he would not hand over the charge to him unless he will get his fees as well as the reasoning and apology letter in writing from AA for adjourning such crucial insolvency matters and not deciding his fees for such long period and also reasoning for passing two purported wrong orders.
In light of above facts, the DC noted that acts of Mr. Prateek Kathuria for non-submission of documents to newly appointed IRP has caused delay in process which could have been avoided.
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