The Insolvency and Bankruptcy Board of India (IBBI) has recently reprimanded an Insolvency Professional (IP) for directly approaching AA for adjudication on his withdrawal application instead of following the established procedure through IRP.
The Disciplinary Committee observed that, “Mr. S Shivshanker as IRP had several options to correct this anomaly. Firstly, he could have initiated the CIRP as he is required to do after the order of admission and secondly, he was in an apt position to approach AA for seeking clarity on the wrongful deed of the applicant to submit the application directly with AA. He chooses neither of the options and leaves the case to get finality by itself. This being the first case being dealt by Mr. S Shivshanker holds no ground to justify his passive approach.”
As per established principles and procedure, the application of withdrawal can be filed prior to constitution of CoC, however, IRP has to file application with AA in a prescribed form along with the Bank Guarantee.
The IP was charged with Non-conduct of the CIRP proceedings and Non-submission of CIRP forms with the Board as he failed to approach AA for seeking clarity, but sought adjudication instead.
The Disciplinary Committee noted that it was the duty of the IP to conduct CIRP proceedings once the AA had passed an admission order and was appointed as IRP.
The DC noted that contraventions on the part of Mr. S. Shivshanker are procedural in nature and largely resulted due to ignorance of provisions of the Code and regulations made thereunder.
Keeping observations of AA in his case in mind, the Disciplinary Committee warned Mr. S. Shivshanker to be more careful in handling pending assignments and he was further directed to undergo pre-registration educational courses specified under Regulation 5(b) of the IP Regulations from the IPA where he is registered.
S. Shivshanker shall accept or undertake any further assignment under the Code only after successful completion of the preregistration education course, the Disciplinary Committee added.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
