Insolvency Resolution Professional's Discharge Application Denied, Cost Imposed, New Professional Not Appointed

The Tribunal dismissed the Insolvency Resolution Professional's application for discharge, imposed a cost of Rs. 50,000, and directed immediate commencement of duties. The Tribunal instructed the Insolvency and Bankruptcy Board of India to treat the application as a complaint and take appropriate actions against the professional for unprofessional conduct. Additionally, the Operational Creditor's application for appointing a new Insolvency Resolution Professional was dismissed without costs.

---

---

Issues Involved:
1. Application for discharge by the Insolvency Resolution Professional (IRP).
2. Duties and responsibilities of an IRP under the Insolvency and Bankruptcy Code, 2016 (IBC, 2016).
3. Guidelines and regulations by Insolvency and Bankruptcy Board of India (IBBI) regarding IRP appointments.
4. Conduct and unprofessional behavior of the IRP.
5. Response and involvement of IBBI in the discharge application.
6. Additional applications by the Operational Creditor (OC) for new IRP appointment.

Issue-wise Detailed Analysis:

1. Application for Discharge by the IRP:
The IRP sought discharge from the Corporate Insolvency Resolution Process (CIRP) due to delays in receiving the Tribunal's order and subsequent inability to continue as IRP. The IRP claimed non-receipt of the order dated 28.2.2018 until 14.3.2018 and cited unavoidable circumstances for withdrawal of consent.

2. Duties and Responsibilities of an IRP under IBC, 2016:
The Tribunal emphasized the critical role of the IRP, highlighting Section 16 of IBC, 2016, which mandates the appointment of an IRP within fourteen days from the insolvency commencement date. The IRP's duties include managing the Corporate Debtor's (CD) affairs, constituting a Committee of Creditors (CoC), and ensuring financial institutions act per IRP instructions. The IRP's term should not exceed thirty days from the date of appointment.

3. Guidelines and Regulations by IBBI Regarding IRP Appointments:
The Tribunal referred to the guidelines issued by IBBI for appointing IRPs, including the May 2017 and December 2017 guidelines, which outline the preparation of a panel of IPs for appointment. The IRP's inclusion in the panel was based on his expression of interest and eligibility criteria, including no pending disciplinary proceedings and not being convicted in the last three years.

4. Conduct and Unprofessional Behavior of the IRP:
The Tribunal criticized the IRP's unprofessional behavior for seeking discharge without assuming charge and discharging duties. The IRP's contradictory reasons for discharge, citing inability to devote adequate time after expressing interest to be included in the panel, were deemed unprofessional. The Tribunal highlighted the importance of IRPs in the CIRP process and the negative impact of the IRP's inaction on stakeholders.

5. Response and Involvement of IBBI in the Discharge Application:
IBBI, impleaded as a party, filed a detailed reply stating the IRP's application lacked merit and was based on an incorrect understanding of the law. IBBI emphasized the importance of every assignment under the Code and the IRP's duty to perform his role diligently. The Tribunal noted IBBI's regulations governing IPs and IPAs, highlighting the IRP's obligations and the need for regulatory oversight.

6. Additional Applications by the Operational Creditor (OC) for New IRP Appointment:
The OC filed applications seeking directions for the IRP to commence duties or appoint a new IRP. The Tribunal acknowledged the stakeholders' need for the CIRP process to commence and noted the management's willingness to cooperate with the IRP. The Tribunal dismissed the IRP's application for discharge and directed the IRP to commence duties within three days.

Conclusion:
The Tribunal dismissed the IRP's application for discharge, imposed a cost of Rs. 50,000, and directed the IRP to commence duties immediately. The Tribunal also instructed IBBI to consider the application as a complaint and initiate appropriate actions against the IRP for unprofessional conduct. The OC's application for appointing a new IRP was also dismissed without costs.

---