In a circular issued on Wednesday, the Insolvency and Bankruptcy Board of India directed the professionals to ensure compliance with provisions of the applicable laws with reasonable care and diligence.
The Board directed that while acting as an Interim Resolution Professional, a Resolution Professional, or a Liquidator for a corporate person under the Code, an insolvency professional shall exercise reasonable care and diligence and take all necessary steps to ensure that the corporate person undergoing any process under the Code complies with the applicable laws.
The circular further clarified that if a corporate person during any of the aforesaid processes under the Code suffers any loss, including the penalty, if any, on account of non-compliance of any provision of the applicable laws, such loss shall not form part of insolvency resolution process cost or liquidation process cost under the Code.
Also, the insolvency professional will be responsible for the non-compliance of the provisions of the applicable laws if it is on account of his conduct.
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