2023 (3) TMI 748 - HC - Insolvency and Bankruptcy

Disciplinary Action against the Resolution Professional (RP) - Incorporation of partnership firm by the name IBBI Insolvency Practitioners LLP - issuance of SCN on the ground that the RP had used the name IBBI in the firm s name - violation of Section 208 of the IBC read with Regulation 7(2)(a) and 7(2)(b) of the 2016 Regulations - HELD THAT - This Court is of the opinion that the RP could not have used the name IBBI for his own private entity which would amount to misleading the trade and industry as also the stakeholders who are involved in resolution and insolvency processes. The Disciplinary Committee s view does not deserve to be interfered with. The order has also already been given effect to by the MCA and the RP s suspension period of three months as directed by the impugned order has already come to an end. The writ petition is dismissed.

Summary

Issues:
Challenge to order of Disciplinary Committee of IBBI regarding the use of IBBI name by a Resolution Professional.

Analysis:
The petition sought to cancel the order passed by the Disciplinary Committee of the Insolvency and Bankruptcy Board of India (IBBI) against the Petitioner, a Resolution Professional (RP), for incorporating a partnership firm with the name 'IBBI Insolvency Practitioners LLP.' The Disciplinary Committee found the RP in violation of Section 208 of the Insolvency and Bankruptcy Code, 2016, along with specific regulations, and issued directions including a suspension of the RP's registration for three months and a prohibition on taking new assignments until the entity with IBBI name was removed from the Register of Companies.

The High Court noted the absence of representation for the RP during the hearing and observed previous erratic appearances. The Court was informed that the entity with IBBI name had been struck off from the Register of Companies by the Ministry of Corporate Affairs, and the three-month suspension period had already lapsed. The Court agreed with the IBBI's counsel that using the IBBI name for a private entity was misleading and upheld the Disciplinary Committee's decision. The Court found that the order had been implemented, and since the suspension period had ended, there was no reason to interfere with the decision.

In conclusion, the High Court dismissed the writ petition challenging the Disciplinary Committee's order, stating that all pending applications were disposed of. The judgment emphasized the importance of compliance with regulations and the avoidance of actions that could mislead stakeholders in insolvency and resolution processes.