TMI Blog2018 (7) TMI 1632X X X X Extracts X X X X X X X X Extracts X X X X ..... he order of appointment immediately after the order shows that there was a delay on the part of IRP/Applicant who has failed to recognize the importance of his unique position in the entire scheme of IBC, 2016, particularly in relation to CIRP of the CD. Ld. Counsel for the Applicant/IRP represented before this Tribunal that with great efforts after passing the qualifying exam a certificate of registration has been granted to him to act as a Resolution Professional. It is also pertinent to note that consent has been given to IBBI as rightly pointed out in the affidavit filed by IBBI by the Applicant/RP herein to be included for a period of 6 months commencing from 01.01.2018 to 30.06.2018 and Which panel list was forwarded to this Tribunal and also from which panel list this Tribunal had chosen and appointed the Applicant as the IRP of the CD and hence the stand taken by the Ld. Counsel for the Applicant/IRP before us that declaration in Form 2 has not been filed the same being a pre-condition and subject to which the IRP assumes charge as per the orders of this Tribunal is too technical and cannot be accepted as it does not hold much water. The reasons given in the applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Agencies empanelled with it - CA NOS. 60, 69 & 70/C-III/ND/2018 And CP IB NO. 446/ND/2017 - - - Dated:- 16-5-2018 - MR. R. VARADHARAJAN, JUDICIAL MEMBER AND DR. V.K. SUBBURAJ, TECHNICAL MEMBER For The Appearing Parties : Sushan Mahajan, Adv., Abhishek Iyer, Adv., Pulkit Agarwal, Adv., Rajendra Beriwal, Adv. and Ms. Swarupma Chaturvedi, Adv. ORDER 1. This is an Application filed by the Insolvency Resolution Professional (IRP) seeking for discharge from the Corporate Insolvency Resolution Process (CIRP) initiated by this Tribunal by admitting the above main Company Petition filed by the Operational Creditor (OC) namely, Takkshill Enterprises in view of defaults committed by the Corporate Debtor (CD) in relation to the operational debt owed to it. The main Company Petition was admitted by this Tribunal vide order dated 28.2.2018 wherein the IRP as required was also appointed namely, the Applicant herein to discharge the duties as required of him under the provisions of Insolvency and Bankruptcy Code, 2016 (IBC, 2016) read with all attendant rules and regulations. Perusal of the present Application shows that in relation to the order dated 28.2.2018 passed by this Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lution professional is made under sub-section (4) of section 9, the resolution professional as proposed, shall be appointed as the interim resolution professional, if no disciplinary proceedings are pending against him. (4) The Board shall, within ten days of the receipt of a reference from the Adjudicating Authority under sub section (3), recommend the name of an insolvency professional to the Adjudicating Authority against whom no disciplinary proceedings are pending. (5) The term of the interim resolution professional shall not exceed thirty days from date of his appointment. 3. A perusal of the above Section would reveal that where the OC has not chosen to propose the name of an IRP, then by virtue of Section 16(3), the Adjudicating Authority namely, this Tribunal is required to make a reference to the Insolvency and Bankruptcy Board of India (IBBI) for the recommendation of an Insolvency Professional who may act as an IRP. 4. Due to unavoidable administrative delays in communication of reference and subsequent recommendations as contemplated above, IBBI in order to overcome the administrative delays, amended the guidelines formulated earlier by it in May, 2017 titl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, IMCLT, New Delhi vide their communication dated 10.1.2018 a panel of IPs recommended for appointment as IRP/Liquidators in respect of CIRP for any CD located in the State of Delhi and Rajasthan for the period from 01.01.2018 to 30.06.2018. From the above panel containing the list of IPs who are eligible to be appointed as IRPs, this Tribunal has chosen the Applicant herein to act as the IRP in relation to the CIRP of the CD in the main petition. 8. However, without assuming charge of his office and discharging the functions as are required to be done under the provisions of IBC 2016, that too after having given his consent for the 6 months period with IBBI commencing from 01.01.2018 to 30.6.2018, in terms of paragraph 4 of December, 2017 guidelines, the IRP has chosen to file this Application seeking for discharge from the functions of IRP, thereby effectively subverting the provisions of IBC, 2016 of the CIRP of CD and from the expeditious manner in which the Resolution Process is required to be carried out. In this regard, it is to be observed that IRPs carry a very serious onus for effectively carrying out the requirements under the provisions of IBC, 2016. For e.g. under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in consonance with any of the provisions of IBC,2016 for the purpose of seeking for the discharge of an irp, this Tribunal was forced to direct notice to IBBI and also make IBBI as party to the Application, as the Insolvency Professionals are basically empanelled and regulated by IBBI and the list of names of empanelled IPs is also forwarded by it to this Tribunal as noted in paragraph supra Hence its reply was sought for to the Application, more by way of assistance, then in relation to facts, though some material facts have also come to light in the affidavit as filed by IBBI of which this Tribunal has duly taken note of in relation to the conduct of the IRP as borne out in the succeeding paragraphs. In this connection, a perusal of the powers of IBBI which has been delineated under Section 196 of IBC, 2016 is relevant and the following sub-sections will be of significance to be noted vis-a-vis an RP, namely: 196. (1) The Board shall, subject to the general direction of the Central Government, perform all or any of the following functions namely: - (a) register insolvency professional agencies, insolvency professionals and information utilities and renew, withdraw, susp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this clause, the term non-discriminatory means lack of discrimination on the grounds of religion, caste, gender or place of birth and such other grounds as may be specified; (d) the manner of granting membership; (e) setting up of a governing board for internal governance and management of insolvency professional agency in accordance with the regulations specified by the Board; (f) the information required to be submitted by members including the form and the time for submitting such information; (g) the specific classes of persons to whom services shall be provided at concessional rates or for no remuneration by members; (h) the grounds on which penalties may be levied upon the members of insolvency professional agencies and the manner thereof; (i) a fair and transparent mechanism for redressal of grievances against the members of insolvency professional agencies; (j) the grounds under which the insolvency professionals may be expelled from the membership of insolvency professional agencies; (k) the quantum of fee and the manner of collecting fee for inducting persons as its members; (l) the procedure for enrolment of persons as membe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceeding before the Adjudicating Authority to the Board as well as to the insolvency professional agency of which he is a member; and (e) to perform his functions in such manner and subject to such conditions as may be specified. It is also significant to note that pursuant to the powers vested in it, IBBI as a Regulator has formulated regulations governing the functions of Insolvency Professional Agencies and Insolvency Professionals titled, inter alia, as follows:- IBBI (Insolvency Professional Agencies) Regulations, 2016. IBBI (Model Bye-Laws and Governing Body of Insolvency Professional Agencies) Regulations, 2016. IBBI (Insolvency Professional ) Regulations, 2016. IBBI (Grievance and Complaint Handling Procedure) Regulations, 2017 10. From the Regulations as framed above, reference initially to Model Bye-Laws of an Insolvency Professional Agency proposed by IBBI and to be incorporated by any Insolvency Professional Agency, pursuant to Regulation 3 of IBBI (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulation, 2016 and as contained in Schedule to the said Regulations and more particularly clauses 13(i)(e)(g)(h) of Chapter VI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce served upon IBBI and IBBI having been impleaded as a party to this Application, IBBI has filed a detailed reply through its Deputy General Manager, wherein it has been stated that the Application as filed by the Applicant is not justified as it lacks merit since the issue raised is based upon an incorrect understanding of law. In accordance with the guidelines of December, 2017 as noticed above in this order, it is stated that the Board prepares a panel of IPs for appointment as IRP or liquidator and has shared the said panel with this Tribunal and that the said panel has a validity of 6 months and that a new panel replaces the earlier panel every 6 months. It is further pointed out in the affidavit that based on the expression of interest to be included in the panel for the relevant period by the IRP who is Applicant herein, his name has been included in the panel which has been forwarded to this Tribunal and in view of the same the prayer as sought for by the IRP in the Application cannot be encouraged particularly having come to know he has been appointed as an IRP. It is also brought to the notice of this Tribunal by way of the above referred affidavit filed by IBBI that eve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal vide order dated 28.2.2018 as well as the reply filed by IBBI and the Applications filed by the OC in CA No. 69/C-III/ND/2018 and CA No. 70/C-III/ND/2018. Further, representations of the CD as well as the Financial Creditors of the Company were also heard. It is evident from the representations of the OC, CD as well as Financial Creditors who are before us that there is prime need for the CIRP Process to commence, as envisaged under the provisions of IBC, 2016 and in consonance with the order of admission of CIRP as initiated against the CD by this Tribunal. From the submissions made by the stakeholders who were before us, it is clear that the management of the CD is willing to act in accordance with IBC, 2016 and cooperate with the IRP. However, the unprofessional action of IRP has virtually made the CIRP process initiated by this Tribunal by way of admission of Company Petition as a non-starter. The delay on the part of IRP ascribing, however, of a procedural nature in the application about receipt of the order of this Tribunal dated 28.02.2018 even though fairly conceded by Ld.Counsel appearing for the IRP/Applicant that the IRP appointed by this Tribunal was put on no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been forwarded and from which it is sought to be withdrawn. Thus it can be seen that the act of the IRP is totally unprofessional and instances of similar nature on the part of IRPs is being evidenced in some of the matters before this Tribunal and also seems to be not uncommon, before other Benches of NCLT as well. This practice of IRP s appointed by NCLTs based on panel list provided by IBBI and subsequently trying to resile from their consent earlier given and that too upon appointment by Adjudicating Authority (AA) is strongly required to be eschewed and is to be nipped in the bud at the earliest opportunity. In this connection, the role of the Insolvency Professionals on the one hand and on the other that of AA and their interplay has been succinctly brought in the Report of the Bankruptcy Law Reforms Committee Volume I, Rational and Design, 2015 and at Chapter 4.4 dealing with the Insolvency Professionals after elucidating the role of IPs in the process of Insolvency and Bankruptcy and while stressing the importance of IPs concludes with the following paragraph of Chapter 4.4, which is extracted hereunder: The role of the IPs is thus vital to the efficient operation of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
