IBBI directs to penalise IP for placing Non-Compliant Resolution Plan for consideration of CoC
IBBI – penalise IP – Non-Compliant Resolution Plan – consideration of CoC – taxscan
IBBI – penalise IP – Non-Compliant Resolution Plan – consideration of CoC – taxscan
The Insolvency and Bankruptcy Board of India (IBBI) has directed to penalise Insolvency Professionals (IP) for placing non-compliant resolution plans for consideration of CoC.
Mr Anurag Kumar Sinha who is a Professional Member of the Indian Institute of Insolvency Professionals of ICAI and an Insolvency Professional (IP) registered with the Insolvency and Bankruptcy Board of India (IBBI) has erred in his judgement in placing a noncompliant resolution plan for the consideration of the CoC. Further, despite being a non-compliant plan, it was passed and placed for AA's approval.
It was submitted that all the resolution plans submitted by resolution applicants were examined as per the requirements of the Code and the Board, hence, there was no violation of Section 30(2)(f) and 30(3) of the Code. The resolution plan contained payment of insolvency resolution process cost, payment of debts of operational creditors in the manner as specified by the Board, provided for management of affairs of the CD, implementation, and supervision of the resolution plan etc. Hence, the resolution plan complied with the provisions of Section 30(2) of the Code and section 30(3).
Mr Anurag Kumar Sinha submitted that there was no violation of regulation 36B(4A) of CIRP regulations. The RFRP contained the clause for submission of performance security within a specified time and contained a provision also for forfeiture of performance security/ invocation of performance guarantee in case of breaching of any of the conditions of the resolution plan, for violation of the Code or the Regulations by SRA etc.
It was evident that on the performance guarantee issue, Mr Anurag Kumar Sinha has erred in interpreting the requirement and failed to guide the CoC in making an informed decision as per the law's requirement.
Further, despite being a non-compliant plan, it was passed and placed for AA’s approval. AA has strongly commented on the issue in its judgement pointing out the mistake of the resolution professional and the CoC in submitting the plan despite the PG issue being unresolved and directed ‘.IBBI to look into the conduct of the Applicant and initiate appropriate action against the Resolution Professional’.
The Disciplinary Committee (DC) noted that the resolution plan placed before the CoC for approval had a timeline for submission of PBG which was at variance with the one contained in RFRP. The Board directed to consider taking action against SRA as per provisions of the code.
To Read the full text of the Order CLICK HERE
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