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TMI Blog2018 (7) TMI 1632X X X X Extracts X X X X X X X X Extracts X X X X ..... ncy 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 Tribunal, it is contended by the Applicant that it was not received by him either by way of email or by way of post till 14.3.2018 and since the order was also not uploaded on time, the parties were not in a position to provide the order dated 28.2.2018. On 15.3.2018, it is further stated that a representative was sent by the IRP to the Registry of this Tribunal for obtaining a free copy and that the free copy was given to the representative of IRP on 15.3.2018. However, on receipt of the copy of order on 15.3.2018, it is averred by the Applicant that an email was sent on 17.3.2018 addressed both to the advocate for the OC as well as to the Registrar of this Tribunal, expressing the inability of IRP-Applicant to continue as IRP and that the consent given in Form-2 be treated as withdrawn in the matter due to unavoidable circumstances. Further the initial deposit of Rs. 2.00 lakhs it is stated had also been advised not to be paid to the IRP in view of the email dated 17.3.2018 expressing inabili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rence and subsequent recommendations as contemplated above, IBBI in order to overcome the administrative delays, amended the guidelines formulated earlier by it in May, 2017 titled as Insolvency Professionals to act as Interim Resolution Professionals (Recommendation) Guidelines, 2017 dated 25.5.2017 and wherein detailed guidelines were framed by IBBI. It will be pertinent to reproduce paragraph 3 of the earlier guidelines (May, 2017) which reads as under: 3. When a reference is received from AA for recommending the name of an IP, the Board has no information about the volume, nature and complexity of the CIRP or the resources available at the disposal of an , I.P. Keeping in view the observations of the Joint Parliamentary Committee and this fact, the Board believes that every IP is equally suitable to act as IRP of any CIRP, if otherwise not disqualified. Therefore, it is necessary to have guidelines to recommend one IP out of all registered IPs for any CIRP. 5. In furtherance to the May, 2017 guidelines framed by IBBI in relation to appointment of IRP in a given instance, an amended guidelines as already mentioned and titled as Insolvency Professionals to act as Interim Resol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 Section 17 of IBC, 2016 from the date of appointment of an IRP, the management of affairs of the CD are to vest in the IRP and the powers of the Board of Directors of the CD shall stand suspended and be exercised by the IRP. It is also provided in clause (d) of sub-section (1) of Section 17 of IBC, 2016 that the financial institution maintaining the accounts of the CD is required to act in accordance with the instructions of IRP. Further, officers of the CD are also required to report to the IRP and also to provide access to documents and records, as may be required by the IRP for the discharge of his functions. The duties of the IRP has been listed out under Section 18 of IBC, 2016, wherein, one of the important duties of the IRP is to constitute a Committee of Creditors (CoC) after receiving the claims as envisaged under Section 21 of IBC, 2016 by collating all the claims against CD received by the IRP pursuant to public announcement, as required to be made within a period of 3 days from the date of admission, as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the following functions namely: - (a) register insolvency professional agencies, insolvency professionals and information utilities and renew, withdraw, suspend or cancel such registrations; (b) specify the minimum eligibility requirements for registration of insolvency professional agencies, insolvency professionals and information utilities; (c)........................... (d) specify by regulations standards for the functioning of insolvency professional agencies, insolvency professionals and information utilities; (e) lay down by regulations the minimum curriculum for the examination of the insolvency professionals for their enrolment as members of the insolvency professional agencies; (f) carry out inspections and investigations on insolvency professional agencies, insolvency professionals and information utilities and pass such orders as may be required for compliance of the provisions of this Code and the regulations issued hereunder; (g) monitor the performance of insolvency professional agencies, insolvency professionals and information utilities and pass any directions as may be required for compliance of the provisions of this Code and the regulations issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies; (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 members of insolvency professional agency; (m) the manner of conducting examination for enrolment of insolvency professionals; (n) the manner of monitoring and reviewing the working of insolvency professional who are members; (o) the duties and other activities to be performed by members; (p) the manner of conducting disciplinary proceedings against its members and imposing penalties; (q) the manner of utilising the amount received as penalty imposed against any insolvency professional. (3) Notwithstanding anything contained in any other law for the time being in force, while exercising the powers under this Code, the Board shall have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908, while trying a suit, in respect of the following matters, namely : - (i) the discovery and production of books of account and other documents, at such place and such time as may be specified by the Board; (ii) summoning and enforcing the attendance of persons and examining them on oath; (iii) inspecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le to the said Regulations and more particularly clauses 13(i)(e)(g)(h) of Chapter VIII of the Model Bye-Laws provide in relation to duties of IP as follows: 13(1) In the performance of his functions, a professional member shall- ** ** ** (e) discharge his functions with the highest standards of professional competence and professional ethics; ** ** ** (g) perform duties as quickly and efficiently as reasonable, subject to the timelines under the Code; (h) comply with applicable laws in the performance of his functions; and ** ** ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 even though in the present Application, the grounds of unavoidable circumstances has been cited seeking for the discharge, however, vide email annexed dated 26.4.2018 and as evidenced by Annexure A-4 fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ell 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 notice through telephone about the 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 positio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the insolvency and bankruptcy resolution process. A well functioning system of resolution driven by IPs enables the adjudicator to delegate more and more powers and duties to the professionals. This create ..... X X X X Extracts X X X X X X X X Extracts X X X X
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