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2021 (2) TMI 873 - Board - Insolvency and BankruptcyProfessional Misconduct - Validity of accepting the assignment as the Liquidator in the Corporate Insolvency Resolution Process (CIRP) of M/s The Jeypore Sugar Company Limited (CD) after 31st December, 2019 without holding a valid Authorisation for Assignment (AFA) from his IPA - Regulation 7A of IP regulations - HELD THAT:- It is clear from the said Regulation that one of the essential condition 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 any assignments or conduct various processes thereof. Regulation 7A was inserted in the IP Regulations vide notification dated 23rd July 2019 - The bye-laws of Indian Institute of Insolvency Professionals of ICAI 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 by the IPs to the IPA under para 12A of said bye-laws. An IP who is more than seventy years of age is ineligible to make an application for AFA under para 12A (2)(e) of the said bye-laws. In the present matter it is observed that, Mr. Sivakumar was appointed as Liquidator of the CD vide order of the AA dated 29th May, 2020. The date of Public Announcement of the Liquidation is 29th May, 2020. The notification published on 23rd July, 2019, inter alia, amended the IP Regulations and holding of AFA has been made one of the essentials for conducting various processes under the Code, to be effective from 1st January, 2020. Thus, adequate time was given to the Insolvency Professionals to obtain AFA. The DC notes that Mr. Sivakumar did not hold valid AFA even after more than four months from the date of enforcement of the provisions. The submission of Mr. Sivakumar that liquidation of the CD is not a new assignment is not tenable as the order for liquidation is separately passed under section 33 of the Code and liquidator is appointed subject to his consent as per section 34 of the Code. The CIRP and Liquidation process are entirely separate and require separate consent from the Insolvency Professionals - The DC finds that an order has been passed against Mr. Sivakumar on 1st December, 2020 by the Disciplinary Committee of IPA for accepting assignment as Liquidator after 31st December, 2019 without holding a valid AFA in the CIRP of the CD and it has been decided that Mr. Sivakumar is guilty of Professional Misconduct and a penalty of ₹ 10,000/- has been imposed. In view of the fact that the Disciplinary Committee of the Indian Institute of Insolvency Professional of ICAI has already passed order in this matter, 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 - SCN disposed off.
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