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2021 (3) TMI 248 - Board - Insolvency and BankruptcyValidity of accepting the assignment as a liquidator in voluntary liquidation process of Buffalogrid Project (P.) Ltd. without holding a valid Authorization for Assignment (AFA) issued to him by his IPA - contraventions of sections 208(2)(a) and 208(2)(e) of the Insolvency and Bankruptcy Code, 2016 (Code), regulations 7(2)(a), 7(2)(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 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. Regulation 7A was inserted in the IP Regulations vide notification dated 23rd July, 2019, much before the cut-off date, i.e., 31st December, 2019. Adequate time was given to the professionals to obtain AFA from respective IPAs. The Bye-Laws of ICSI Institute of Insolvency Professionals defines in para 4(1)(aa) the expression "Authorization for Assignment" as an authorization 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 - Further, Section 208 of the Code also casts an obligation to abide by the code of conduct and comply with all requirements and terms and conditions specified in the bye-laws of the insolvency professional agency of which he is a member. The credibility of the processes under the Code hinges upon the conduct and competence of the IP. Section 208(2) of the Code provides that every IP shall take reasonable care and diligence while performing his duties and to perform his functions in such manner and subject to such conditions as may be specified. Further, 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. The DC finds that an order has been passed by the Disciplinary Committee of IPA against Mr. Kapur on 7th September, 2020 wherein it has been mentioned that the Mr. Kapur accepted the assignment on 4th September, 2019. However, on examination of the documents placed on record, the DC finds that the date of acceptance is 28th August, 2019 while the order of Disciplinary Committee of IPA mentions the date of acceptance as 4th September, 2019, which appears to be incorrect - The Disciplinary Committee of IPA vide aforementioned order issued warning to Mr. Kapur to be extremely careful and diligent and that he should act strictly as per law and similar action should not be repeated. IPA further directed that Mr. Kapur shall not accept any new assignment without obtaining Authorisation for Assignment. SCN disposed off.
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