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2021 (1) TMI 755 - Board - Insolvency and BankruptcyAccepting the assignment in the capacity of Insolvency Resolution Professional (IRP) without holding a valid Authorisation for Assignment (AFA) from his IPA - contraventions of sections 208(2)(a) & (e) of the Insolvency and Bankruptcy Code, 2016 (Code), regulations 7(2)(a) & (h) and 7A of the IBBI (Insolvency Professionals) Regulations, 2016 (IP Regulations) read with clauses 1, 2, 11, 12 and 14 of the Code of Conduct contained in the First Schedule of the IP Regulations - HELD THAT:- It is clear from Regulation 7A of IP regulations that one of the essential conditions for undertaking any assignment by an IP is that he should have a valid AFA which is issued by the IPA with which he is enrolled. In other words, without AFA, an IP is not eligible to undertake assignments or conduct various processes thereof after 31st December, 2019. Regulation 7A was inserted in the IP Regulations vide notification dated 23rd July, 2019, much before 31st December, 2019. The same was widely publicized in various programmes. Adequate time was given to the professionals to obtain AFA from respective IPAs. This information was made available on the websites of the IBBI as well as the IPAs. The bye-laws of ICSI Institute of Insolvency Professionals defines in para 4(1)(aa) the expression "authorisation for assignment" as an authorisation to undertake an assignment, issued by an insolvency professional agency to an insolvency professional, who is its professional member, in accordance with its bye-laws regulation. An application for grant of AFA can be made to the IPA under para 12A of said bye-laws. Every professional member of the IPA with which he is enrolled should keep himself abreast with new professional developments - The credibility of the processes under the Code depends upon the observance of the Code of conduct by the IRP/RP during the process. Section 208(2) of the Code casts an obligation to abide by the code of conduct, take reasonable care and diligence while performing his duties and comply with all requirements and terms and conditions specified in the byelaws of the insolvency professional agency of which he is a member. The Code of Conduct specified in the First Schedule of the IP regulations enumerates a list of code of conduct for insolvency professionals including maintaining of integrity and professional competence for rendering professional service, representation of correct facts and correcting misapprehension, not to conceal material information and not to act with mala fide or with negligence. In the present matter, the DC notes that Mr. Joshi accepted the assignment of CIRPs in matter of Indian M/s Govindam Metals and Alloys Private Limited on 30th September, 2019 and M/s Rajit Rolling Mills Private Limited on 8th November, 2019, which is evident from the consent form (Form 2) submitted along with the application for initiating CIRPs. However, due to administrative issues, the CIRPs commenced after 31st December, 2019, viz., 17th January, 2020 and 25th February, 2020. It is also noted that he is more than 70 years of age, is ineligible to apply for AFA and does not intend to take further assignments under the Code - DC finds that an order has been passed against Mr. Joshi on 7th September, 2020 by the Disciplinary Committee of IPA with respect to the issue raised in this SCN, i.e., accepting assignment as an Interim Resolution Professional after 31st December, 2019. The Disciplinary Committee of IPA has issued warning to Mr. Joshi in view of the fact that the date of commencement of the CIRPs is after 31st December, 2019 but the acceptance for the assignments has been given by Mr. Joshi prior to 31st December, 2019. In view of the fact that Mr. Arun Rajabhau Joshi being more than 70 years of age is ineligible to apply for AFA under the Code and that Disciplinary Committee of ICSI Institute of Insolvency Professionals has already taken disciplinary action against Mr Joshi with regard to the issue of undertaking assignments without holding valid AFA, the DC, in exercise of the powers conferred under Regulation 11 of the IBBI (Insolvency Professionals) Regulations, 2016, disposes of the SCN without any direction against Mr. Arun Rajabhau Joshi - SCN disposed off.
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