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2024 (1) TMI 93 - MADRAS HIGH COURTDisciplinary enquiry / proceedings against Resolution Professional (RP) - Automatic suspension of Authorization For Assignment (AFA) of the Resolution Professional - Regulation 23A of the Model Bye-Laws and Governing Board of Insolvency Professional Agencies Regulations, 2016 - liquidator-petitioner shared the details of the valuation report of the assets of the company with all the scheme proponents, as a result of which all of them quoted the same price. The petitioner does not deny that he shared the valuation report, but defends it on the ground that he was under an order of the NCLT to try for a compromise under Sec.230 of the Companies Act and backs it up with the ratio of the Hon'ble Supreme Court in Vijay Kumar Vs Standard Chartered Bank [2019 (2) TMI 97 - SUPREME COURT] and that of the NCLT in Hemant Shantilal Shah & another Vs Care Office Lt., [2022 (4) TMI 522 - NATIONAL COMPANY LAW TRIBUNAL , AHMEDABAD BENCH]. Whether the show cause notice which the IBBI has served on the petitioner is legally sustainable? Whether this petition is entertainable when only a show cause notice of a statutory body is in challenge? HELD THAT:- Inasmuch as the petitioner has admitted that he had shared the valuation report of the CD, this Court considers that a prima facie ground is available for the IBBI to issue the show cause notice. The prima facie view of this Court is that when the petitioner ceases to be a Resolution Professional, and starts wearing the cap of a liquidator, the role of IIIP of ICAI vis-a-vis its member ceases. Hence, this Court considers, that at the best the decision of the IIIP of ICAI can be a piece of evidence in the proposed disciplinary proceedings but may not be adequate to affect the jurisdiction of the IBBI to initiate a disciplinary action against the petitioner. Turning to suspension of the petitioner is concerned, this is an automatic process on commencement of a disciplinary proceedings under Regulation 23A of the IBBI (Model Bye-laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016. This cannot be interfered with since this Court finds that the IBBI has the jurisdiction to initiate a disciplinary proceedings, and in the instant case it is not established to be a malafide exercise of statutory power. The petitioner will have all the liberty to put forth his entire line of defence disciplinary enquiry, which needless to say includes all that the grounds on the basis of which he has now challenged the show cause notice - Petition dismissed.
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