The Insolvency and Bankruptcy Board of India‘s (IBBI) Disciplinary Committee has issued a warning to an Insolvency Professional (IP), for alleged inordinate delay of the corporate insolvency resolution process (CIRP) of M/s Sabari Realtors Private Limited. The order was issued under Section 220 of the Insolvency and Bankruptcy Code, 2016, and relevant regulations.
The National Company Law Tribunal, Chennai, had admitted the application for CIRP of M/s Sabari Realtors Private Limited in September 2019, appointing the IP as the Resolution Professional (RP) in June 2020. However, the IBBI found that there was a significant lack of progress in the CIRP from November 2020 to January 2021, even after a 90-day extension was granted by the AA in April 2021.
The Insolvency Professional’s contention that the COVID-19 pandemic prevented him from conducting any meetings of the Committee of Creditors (CoC) was deemed unacceptable by the IBBI. They highlighted that virtual meetings could have been arranged, similar to the 9th CoC meeting held in September 2021.
The Disciplinary Committee concluded that the IP, S Amarendran had violated Section 25(1) and Section 208(2)(a) of the Insolvency and Bankruptcy Code, as well as specific regulations and clauses of the Code of Conduct. However, they took into account the exceptional circumstances presented by the COVID-19 pandemic and the submissions made by Mr. S. Amarendran.
S Amarendran argued that he had conducted three CoC meetings during the relevant period, sent emails to claimants, and finalized pleadings in applications related to the CIRP. He also cited personal difficulties due to COVID-19, including his wife contracting the virus and the subsequent need for isolation.
The Disciplinary Committee acknowledged the IP’s submissions but emphasized the importance of continuous communication and adherence to timelines in the CIRP process. They warned him to perform his duties with diligence and care, ensuring effective communication with all CoC members for timely decisions and actions.
The order of the IBBI comes into immediate effect, and a copy of the order will be forwarded to the ICSI Institute of Insolvency Professionals, where Mr. S. Amarendran is enrolled as a member. It will also be shared with the Registrar of the Principal Bench of the National Company Law Tribunal (NCLT).
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