IP-Suspension of Insolvency Professional

A Resolution Professional will come within the meaning of ‘Public Servant’ under Section 2(c) of the Prevention of Corruption Act, 1988 and Section 233 of IBC does not protect where he has been apprehended red-handed with the bribe amount – Sanjay Kumar Agarwal Vs. Central Bureau of Investigation, Anti Corruption Bureau, Dhanbad – Jharkhand High Court

In this case, a complaint against Resolution Professional was made that Resolution Professional/Petitioner had demanded a bribe of Rs.2,00,000/- per month for showing leniency in the insolvency resolution process for extending CIRP process from 09 months to 02 years and also demanded Rs.20,00,000/- for obtaining favourable forensic audit/valuation report from his chosen Forensic Auditor/Valuer and for helping in re-possession of plant/company.
The central question in the instant petition is whether Resolution Professional as defined under Section 22 of the IBC will come within the meaning of ‘Public Servant’ under Section 2 (c) of the Prevention of Corruption Act, 1988?.

Hon’ble High Court that: (i) functions and obligations of Insolvency Professionals are as set out under Section 208 of IBC which are public in nature. These functions intimately relate to matters relating to loans extended by the Banks which is investments from public at large and therefore will come within the meaning of public duty as provided under Section 2-c(viii) of the Prevention of Corruption Act, 1988. (ii) The appointment of Resolution Professional is made during the resolution process before the Company Law Tribunal with its approval, he will be a public servant under Section 2(c)(v) of the Prevention of Corruption Act, 1988. (iii) Section 233 of IBC gives protection to a resolution professional from criminal prosecution for acts in good faith, and not where he has been apprehended red-handed with the bribe amount. (iv) Section 232 does not exclude operation of Prevention of Corruption Act, 1988.

A Resolution Professional will come within the meaning of ‘Public Servant’ under Section 2(c) of the Prevention of Corruption Act, 1988 and Section 233 of IBC does not protect where he has been apprehended red-handed with the bribe amount – Sanjay Kumar Agarwal Vs. Central Bureau of Investigation, Anti Corruption Bureau, Dhanbad – Jharkhand High Court Read Post »

Whether Adjudicating Authority(NCLT) can remove a Liquidator? – CA V. Venkata Sivakumar Vs. IDBI Bank Ltd. – NCLAT Chennai

NCLAT held that the Code, 2016 does not explicitly state the grounds for removing the liquidator. In the absence of specific provisions, we may resort to Section 33 & 34 of the Code, 2016 and Section 276 of the Companies Act, 2013, which provides for the removal and replacement of liquidators on various grounds. No Liquidator, has any personal rights, to continue in Liquidation and the Adjudicating Authority, can order for replacement of the Liquidator, recording sufficient reasons, as per law. Combined reading of above Case Laws and provisions along with Section 33 and Section 34 of the Code, 2016, would make it clear that the Adjudicating Authority, which had the powers, to appoint the Liquidator, will also have the powers, to remove the Liquidator for reasons, the Adjudicating Authority, may find fit, just, valid and proper.

Whether Adjudicating Authority(NCLT) can remove a Liquidator? – CA V. Venkata Sivakumar Vs. IDBI Bank Ltd. – NCLAT Chennai Read Post »

High Court can entertain Writ Petition if IBBI’s order effects the work of an Insolvency Professional in its territorial jurisdiction – Partha Sarathy Sarkar Vs. Insolvency & Bankruptcy Board of India (IBBI) – Bombay High Court

In this case, the Registration of Petitioner as Insolvency Professional is suspended for a period of three years under the impugned order dated 24.06.2022. IBBI (and other Respondents) contended that on the basis of principle of forum conveniens, the Petitioner ought to have filed the Petition before the Delhi High Court.
Hon’ble High Court entertained the Writ Petition and held that the Petitioner acts as a Resolution Professional and has work on hand at Mumbai. He is appointed as an IP by the Mumbai Bench for Wholesale Foods P.Ltd. and the said proceeding is pending adjudication before NCLT, Mumbai Bench. The Petitioner is empanelled as IP for financial institution in Mumbai. The Petitioner is also appointed in voluntary liquidation of Gulf India Ltd. before NCLT Mumbai Bench. The effect of the impugned order of suspension will be felt by the Petitioner even in the State of Maharashtra.
The Court held that pursuant to the order of suspension, the Petitioner would not be in a position to work as a Resolution Professional with the assignments on hand in the State of Maharashtra. The Petitioner is already having assignments in the State of Maharashtra as a Resolution Professional. As the effect of the impugned order will be felt by the Petitioner in the State of Maharashtra, it can safely be concluded that part of cause of action has arisen with the territorial jurisdiction of this court.

High Court can entertain Writ Petition if IBBI’s order effects the work of an Insolvency Professional in its territorial jurisdiction – Partha Sarathy Sarkar Vs. Insolvency & Bankruptcy Board of India (IBBI) – Bombay High Court Read Post »

Scroll to Top