The Insolvency and Bankruptcy Board of India ( IBBI ) imposed a penalty of two lakh on the Insolvency Resolution Professional for Non-Cooperation in Conducting Investigation. It was found that the RP inadvertently failed to provide the minutes of the 2nd CoC meeting.
The show cause notice was issued in an allegation against the Insolvency Professional ( IP ) registered with the Insolvency and Bankruptcy Board of India ( IBBI ). interim resolution p The alleged person was an interim resolution professional (IRP)/ resolution professional/liquidator in the matters, Falcon Consultancy Pvt Ltd (cooperate debtor(CD)-1), Global Coke Ltd. (CD-2), Saraswati Sales Pvt. Ltd (CD-3), Dayal Commercial Co. Pvt. Ltd. (CD-4) and Yash Smelter Pvt. Ltd (CD-5).
The IBBI, in the exercise of its powers under Section 196 of the Code read with Regulation 3(1) and 3(3) of the IBBI ( Inspection and Investigation ) Regulations, 2017 ( Inspection Regulations ) appointed an Inspecting Authority ( IA ) to inspect. The IA shared the Draft Inspection Report (DIR).
The Disciplinary Committee (DC) found that the IRP has not perused the valuation report submitted by valuers. Accepting such a valuation report shows gross negligence and carelessness on the part of Mr Shashi Agarwal. Therefore, the DC holds the charge made in the SCN.
The Board observed that IRP did not appoint any registered valuers to determine the valuation of the CD-2 during his tenure as IRP. The IRP in his reply to DIR has merely stated that RP was confirmed on 09.07.2018 and hence there was no delay but he has not denied having appointed any valuer during his tenure as IRP.
The Board held the prima facie view that Mr Shashi Agarwal had, inter alia, violated Regulation 27 of the CIRP Regulations read with clauses 13 and 14 of the Code of Conduct.
The RP has accepted that he inadvertently failed to provide the minutes of the 2nd CoC meeting. However, he has still not provided the said minutes and instead forwarded the minutes for the 2nd SCC ( Stakeholders’ Consultation Committee ) meeting dated 19.04.2022. Hence, the DC finds the act of IRP in contravention of the alleged provisions.
The DC in the exercise of the powers conferred under Section 220 of the Code read with Regulation 13 of the IBBI ( Inspection and Investigation ) Regulations, 2017 and Regulation 11 of the IBBI ( Insolvency Professionals ) Regulations, 2016 imposed a penalty of Rs.2,00,000 ( Rupees two lakhs only ) on RP and directed him to deposit the penalty amount directly to the Consolidated Fund of India ( CFI ).
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
