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2020 (7) TMI 322 - Board - Insolvency and BankruptcyDisciplinary action against the Insolvency Resolution Professional (IP) - allegation that IP had contravened provisions of the Code, Regulations, and directions - Liquidation of Corporate Debtor - HELD THAT:- The Code envisages the role of an Insolvency Professional to manage the entire resolution process and to conduct liquidation of a Corporate Debtor. The RP is appointed by the Adjudication Authority and is given wide power by them to effectively run and manage the entity as a going concern, and also to manage the assets of the entity at all times during the process of CIRP. Further, the RP have been given immense powers under the Code, but they also have the corresponding responsibility to abide by the Code, rules, regulations and guidelines at all times. In India today, there are professionals and intermediaries that offer services to resolve financial distress of both registered entities as well as individuals. These include lawyers, accountants and auditors, valuers and specialist resolution managers. However, given the critical role that the Code envisages for these entities in the resolution process, the Committee believes that the Board should set minimum standards for the selection of these professionals, along with their licensing, appointment, functioning and conduct under the Code. The duties of IP and CoC are clearly provided under the provisions of the Code. In the present case, the RP permitted conduct of third valuation upon the desire of CoC despite his disbelief in conducting the third valuation. He further incurred additional financial costs upon an over-burdened CD through conduct of such third valuation. Thus, he allowed the members of CoC to usurp his powers thereby putting additional burden on an already ailing CD - Regulation 4(3) of IBBI (Liquidation Process) Regulations, 2016 clearly states that in cases where the Liquidator fees has not been decided by the CoC, then the liquidator is entitled to a fee as per the table provided in the abovementioned provision. Despite such clear and unambiguous position of the law, the IP continued to charge the same fees during liquidation process which he was charging while acting as an RP. The DC, in exercise of the powers conferred under section 220 of the Code read with Regulation 13 (3) of the IBBI (Inspection and Investigation) Regulations, 2017 and sub-regulations (7) and (8) of Regulation 11 of the IBBI (Insolvency Professionals) Regulations, 2016, DC hereby directs Mr. Bhupesh Gupta to deposit an amount of ₹ 31,09,000/- (Rs. Thirty-One Lakh Nine Thousand only) in the Liquidation Estate of CD which he has drawn without any authorisation during the period 8th August 2018 to 31st October 2019 while acting as liquidator. However, Mr. Bhupesh Gupta is at liberty to claim liquidator fee in accordance with the provisions of Regulation 4(3) of the IBBI (Liquidation Process) Regulations, 2016. This Order shall come into force on expiry of 30 days from the date of its issue.
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