IBBI disposes of SCN against an IP aged more than 70 yrs. without directions

Case Details: INSOLVENCY AND BANKRUPTCY BOARD OF INDIA, In re Vijaykumar Subramaniam Varun

Judiciary and Counsel Details

• • Sudhaker Shukla, Whole Time Member

Facts of the Case

In the instant case, the Applicant was an Insolvency Professional (IP) registered with IBBI. A Show Cause Notice (SCN) was issued to the applicant, after an examination of available records in respect of his role as an Interim Resolution Professional (IRP) in the Corporate Insolvency Resolution Process (CIRP) of corporate debtor (CD).

In the exercise of the powers conferred to it under section 218 of the Code read with the Inspection Regulations, the Board appointed an Inspecting Authority (IA) to conduct the inspection of IP vide order dated 4-8-2021. A draft inspection report (DIR), prepared by the IA, was shared with the IP, which was later followed by an addendum. The IP had not replied either to DIR or an addendum to DIR. Later, The IA submitted the Inspection Report to the Board.

It was found that the applicant received claims from two financial creditors (FCs) prior to last date of claim and submission as per the public announcement. However, the applicant had only made a preliminary verification of the claim and had assigned provisional voting shares to both FC’s and conducted Committee of Creditors (CoC) meetings.

Further, it was noted that IRP had made no final verification of the claim with records of CD, and despite 242 days having elapsed no final verification of claims was undertaken by IRP.

IBBI Held

Consequently, Hon’ble IBBI observed that pursuant to regulation 13(1) of CIRP Regulations, it is the duty of IRP to verify claims within seven days of its receipt. Also, by not constituting CoC as per provisions of the Code and Regulations made thereunder, contravention of section 18(b), regulation 13(1) of CIRP Regulations and clauses 1, 2, 13 and 14 of the Code of Conduct of IP Regulations had been made out.

The Hon’ble IBBI was of the view that this was a fit case for cancellation of the registration of the applicant but considering the fact that he had crossed the age of 70 years, cancelling the registration of the applicant would not have any effect as after crossing age of 70 years, the applicant anyway, was not entitled to get Authorisation for Assignment renewed and currently he had no IBC cases which he needed to pursue anyway. Accordingly, the show cause notice was disposed of.