IBBI Penalises 6 Insolvency Professionals in November for Not Following IBC Procedure
Moneylife Digital Team 01 December 2022
The Insolvency and Bankruptcy Board of India (IBBI) imposed a penalty of Rs2 lakh to Rs5 lakh for non-compliance and warned six insolvency professionals (IP) to strictly follow the procedure and guidelines of Insolvency and Bankruptcy Code (IBC/Code) in corporate insolvency resolution process (CIRP). In six separate orders in November, the disciplinary committee (DC) of IBBI also asked three IPs to work as probationers while keeping their authorisation for assignment suspended. One IP is asked to undergo 50 hours of pre-registration educational course. 
 
Out of the six orders, three were passed by Sudhaker Shukla, whole-time member (WTM) of IBBI, two by WTM Jayanti Prasad and one order was passed by Ravi Mital, chairperson of the Board. 
 
IBBI has imposed a penalty of Rs5 lakh each on Sonu Jain and Sanjeev Ahuja, Rs2.50 lakh on Gopal Lal Baser and Rs2 lakh each on Anuj Kumar Tiwari and Sunil Kumar Agarwal. 
 
The DC of IBBI found these resolution professionals (RP) not complying with the provisions of IBC while handling CIRP cases. Mr Tiwari was handling four CIRPs but failed to regularly file the monthly report in form CIRP7. 
 
In his order, Mr Shukla, the WTM of IBBI, says Mr Agarwal, the RP, 'failed to seek an extension of time'. "Seeking extension of time on expiry of deadline is an essential requirement and in the normal course, RP is in position to nudge the CoC to take an appropriate decision as per stipulations of the Code...This is rather a bad example that both RP and CoC worked towards pushing the corporate debtor (CD) to liquidation on technical grounds," the order says.
 
While imposing a penalty of Rs2.50 lakh, IBBI told Mr Baser to be more cautious in future and strictly comply with the applicable provisions of the Code. In his order, Mr Mittal, the chairperson of IBBI, says, "...the conduct of Mr Baser considering the preliminary views of creditors who had voted prior to the meeting of the CoC, as final views and based on that, declaring an agenda approved is a negligence as considering preliminary votes taken prior to the discussions or deliberations in the CoC when full information has not been supplied and informed decision has not been made goes against the provisions of the Code."
 
In its order against Ms Jain, the DC noted that she was "conducting CIRP and liquidation proceeding in a very casual and careless manner which is not at all expected from an IP. Ms Jain was not only casual in keeping the records of the proceeding and submitting the same to the inspecting authority (IA), but she was careless in filing report also with AA."
 
Ms Jain was handling the CIRP of four companies and was assigned different roles like IRP, RP and liquidator for these companies.
 
While asking Mr Kathuria to undergo 50 hours of pre-registration educational course, Mr Shukla, the WTM of IBBI says, "Mr Kathuria should have applied his mind independently being an insolvency professional and not doing so resulted in utter disregard and disrespect to the order of AA. However, keeping in view of written apology aided by the fact that this was his first case, some leniency is being conceded as a one-time measure."
 
In his order against Mr Ahuja, IBBI found that the IP was not cautious and careful in interpreting the provisions of the Code and Regulations. "The lapses in procedure about appointing non-registered valuers (RVs), not sending notice of the meeting of CoC to operational creditors (OCs) and not seeking approval from CoC regarding insurance cost indicates that Mr Ahuja was not cautious and careful," the order passed by Mr Prasad says.
 
Case1
 
Name of IP: Anuj Kumar Tiwari
CIRP: Sparkspell Homes Pvt Ltd, Chinttpurni Engineering Work Pvt Ltd, Prism Industrial Complex Ltd and Diamond Infraland Developers India Ltd
IBBI Order: Penalty of Rs2 lakh
Case No.IBBI/DC/142/2022  Date: 24 November 2022
 
Case2
 
Name of IP: Sunil Kumar Agarwal
CIRP: Brain Master's Classes Pvt Ltd, Eagle Corporation Pvt Ltd 
IBBI Order: Penalty of Rs2 lakh
Case No.IBBI/DC/141/2022 Date: 21 November 2022
 
Case3
 
Name of IP: Gopal Lal Baser
CIRP: Wianxx Impex Pvt Ltd 
IBBI Order: Penalty of Rs2.50 lakh
Case No.IBBI/DC/140/2022 Date: 15 November 2022
 
Case4
 
Name of IP: Sonu Jain
CIRP: Diamond Shipping Company Ltd (IRP, RP, Liquidator), Bengal Chemicals and Pharmaceuticals Ltd (IRP), Falcon Consultancy Pvt Ltd (Liquidator), Jinprabhu Infrastructure Developments Ltd (IRP, RP, Liquidator) 
IBBI Order: Penalty of Rs5 lakh/ to work as a probationer for four months
Case No.IBBI/DC/139/2022  Date: 10 November 2022
 
Case5
 
Name of IP: Prateek Kathuria
CIRP: India Sports Flashes Pvt Ltd
IBBI Order: 50 hours pre-registration educational course/to work as a probationer for four months
Case No.IBBI/DC/138/2022   Date: 3 November 2022
 
Case6
 
Name of IP: Sanjeev Ahuja
CIRP: Auto Decor Pvt Ltd, MBL Infrastructures Ltd
IBBI Order: Penalty of Rs5 lakh
Case No.IBBI/DC/137/2022      Date: 2 November 2022
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