TMI Blog2019 (3) TMI 825X X X X Extracts X X X X X X X X Extracts X X X X ..... duty to address the distress. The DC unfortunately finds that Mr. Kejriwal did not discharge any of his statutory responsibilities as IRP or RP either to manage the operations of the two CDs as going concern under section 20 of the Code or to conduct the resolution processes of the two CDs under section 23 of the Code. He has, therefore, violated provisions of sections 18, 20, 23, 25(2)(g), 25(2)(h), 29, 208(2)(a), and 208(2)(e) of the Insolvency and Bankruptcy Code, 2016, regulations 6(1), 19(1), 27 and 36 of the IBBI (Insolvency Resolution process for Corporate Persons) Regulations, 2016 and regulation 7(2)(a) and 7(2)(h) of the IBBI (Insolvency Professionals) Regulations, 2016 read with clauses 1, 2, 3, 5, 10, 12, 13, 14, and 25 of the Code of Conduct under the said Regulations. It, however, finds in his favour two mitigating factors, namely, (a) Mr. Kejriwal was not well for some time during the relevant period, and (b) the CDs were practically not going concerns to start with. Disciplinary Committee thus imposed monetary penalty equal to one hundred percent of the total fee payable to him as IRP and as RP in the CIRPs of respective companies and directs him to deposit the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pointed Mr. Kejriwal, proposed by the applicant, as IRP with a direction to list the matter on 4th October, 2017 for submission of progress report by the IRP. 3.1.1 Mr. Kejriwal did not file the progress report. The AA, in its order dated 4th October, 2017, observed: even after expiry of more than 30 days, no progress report has been filed by the Interim Resolution Professional. The IRP is directed to remain present in the Court on the next date of hearing and submit his report. List on 16-10-17 for submission of p report by the Interim Resolution Professional. . 3.1.2 Mr. Kejriwal did not appear before the AA. Nor did he submit the progress report. The AA, in its order dated 16th October, 2017, observed: None appeared. .. but till date no report has been filed by the IRP. Let the notice be issued on IRP. List on 16th November, 2017. . 3.1.3 Mr. Kejriwal filed the first progress report stating that he fell ill on 4th September, 2017 and remained on bed till 22nd October, 2017 and hence could not publish Form A (Public Announcement). He sought extension of the period of appointment of the IRP and permission to take steps for ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... new RP who conducted the CIRP. On conclusion of the CIRP, the AA issued an order for liquidation of the CD vide order dated 1st March, 2018 with the following observation: Vide order dated 29th August 2017, the petition was admitted by appointing Mr. Sandeep Kumar Kejriwal as the Resolution Professional for initiating corporate insolvency resolution process. Mr. Sandeep Kumar Kejriwal however, discontinued from completing the resolution process by resigning himself without prior notice and without permission of this Adjudicating Authority. Upon his resignation one Mr. Basudeo Agarwal was appointed as the Resolution Professional. He (Mr. Basudeo Agarwal, Resolution Professional) was not in receipt of any Resolution Plan in response to the publication and that he was not in receipt of any documents or information from the I.R.P. (Mr. Sandip Kumar Kejriwal) who was firstly appointed in the case in hand. Since he (Mr. Sandip Kumar Kejriwal) has resigned on 18.12.2017 without seeking prior permission of the Adjudicating Authority this Bench was compelled to obtain another proposal from I.B.B.I recommending the name of a resolution professional under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the progress report but he has not annexed the minutes of CoC meeting. IRP is directed to file the minutes of CoC meeting along with the attendance sheet without which it cannot be ascertained whether he is appointed as RP or not. 3.2.4 The CoC met for 2nd time on 18th December, 2017 where it was informed that Mr. Kejriwal was resigning. The CoC resolved to appoint another insolvency professional as RP. Mr. Kejriwal filed an application dated 19th December, 2017 stating that he resigned as RP with effect from 18th December, 2017 due to personal reason. The AA, in order dated 20th December, 2017, observed: Let show cause notice be issued against the IRP as to why after accepting the work of resolution professional, he is resigning, without prior permission of the adjudicating authority. 3.3 Vide several mails, the Board sought comments on observations of the AA, and Mr. Kejriwal responded to these mails. It also sought certain documents which Mr. Kejriwal provided. On consideration of the responses and documents provided by Mr. Kejriwal, the Board issued the SCN. Contraventions and Findings 4. The DC observes that both the CIRPs are strikingly similar. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion and approval of resolution plan to resolve insolvency. The heart of the process is resolution plan. He did not invite resolution plans. He did not even prepare or provide the required information to prospective resolution applicants. b. As regards his excuse of non-co-operation from CDs to manage the operations of the CDs as a going concern, there is absolutely no evidence that he wanted to take over management of the CDs. For the sake of formality, he wrote a few letters to the CDs seeking certain documents. He never brought it to the notice of the AA under section 19 of the Code that he was having any non-co-operation from the CDs. He did not make any effort whatsoever to run the CDs as a going concern. c. One can consider illness as an excuse. But that does not justify him to cling on to the CIRPs indefinitely till he recovered. The CIRP of Maa Taara Industrial Complex Pvt. Ltd. was admitted on 8th September, 2017, while Mr. Kejriwal claims to be on bed since 4th September, 2017. He could have brought its to the notice of the AA which may have appointed another IRP. d. His excuse for resignation has also no merit. He has been appointed by the AA with a solemn object ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0, 12, 13, 14, and 25 of the Code of Conduct under the said Regulations. It, however, finds in his favour two mitigating factors, namely, (a) Mr. Kejriwal was not well for some time during the relevant period, and (b) the CDs were practically not going concerns to start with. 6.1 In view of the above, the Disciplinary Committee, in exercise of the powers conferred under section 220 (2) of the Code read with sub-regulations (7) and (8) of regulation 11 of the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016, hereby:- (a) imposes on Mr. Kejriwal a monetary penalty equal to one hundred percent of the total fee payable to him as IRP and as RP in the CIRPs of Upadan Commodities Private Limited and Maa Taara Industrial Complex Pvt. Ltd. and directs him to deposit the penalty amount by a crossed demand draft payable in favour of the Insolvency and Bankruptcy Board of India within 30 days of the issue of this order. The Board shall in turn deposit the said penalty amount in the Consolidated Fund of India. (b) directs Mr. Kejriwal to undergo the pre-registration educational course specified under regulation 5(b) of the Insolvency and Bankruptcy ..... X X X X Extracts X X X X X X X X Extracts X X X X
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