Insolvency Professional penalized for lacking Authorization for Assignment post-2019

The Disciplinary Committee found Mr. Juneja in violation of regulations mandating Insolvency Professionals to possess a valid Authorization for Assignment (AFA) before undertaking any assignment post-31st December, 2019. Mr. Juneja's failure to comply was deemed professional misconduct, leading to a penalty imposed by the Insolvency Professional Agency's Disciplinary Committee. The Disciplinary Committee disposed of the Show Cause Notice based on the IPA's decision, emphasizing the significance of adhering to regulations and the Code of Conduct to uphold the integrity of insolvency processes and professional standards.

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Issues:
Violation of section 208(2)(a) and 208(2)(e) of the Insolvency and Bankruptcy Code, 2016, regulations 7(2)(a), 7(2)(h) and 7A of the IBBI (Insolvency Professionals) Regulations, 2016, and Code of Conduct for Insolvency Professionals.

Analysis:

Background:
The Insolvency and Bankruptcy Board of India (IBBI) issued a Show Cause Notice (SCN) to Mr. Girish Siriram Juneja for accepting an assignment as Resolution Professional (RP) in a Corporate Insolvency Resolution Process (CIRP) after 31st December, 2019 without a valid Authorisation for Assignment (AFA) from his Insolvency Professional Agency (IPA).

Show Cause Notice:
The SCN alleged contravention of specific sections and regulations related to the Insolvency and Bankruptcy Code, 2016, and the IP Regulations for accepting the assignment without a valid AFA.

Submissions by Mr. Juneja:
Mr. Juneja argued that he accepted the assignment as Interim Resolution Professional (IRP) before the relevant regulation came into force and had not violated any provisions of the Code. He also mentioned that he had applied for an AFA from his IPA.

Analysis and Findings:
The Disciplinary Committee (DC) found that Regulation 7A clearly mandates Insolvency Professionals to have a valid AFA before undertaking any assignment after 31st December, 2019. Mr. Juneja's failure to have a valid AFA was a breach of regulations and the Code.

The DC noted that the credibility of insolvency processes relies on adherence to the Code of Conduct, and Mr. Juneja's actions were deemed as professional misconduct. A penalty was imposed by the IPA's Disciplinary Committee for the violation.

Order:
Considering the IPA's decision, the DC disposed of the SCN without further direction. Copies of the order were forwarded to the IPA and the National Company Law Tribunal for information.

In conclusion, the judgment highlights the importance of compliance with regulations and the Code of Conduct for Insolvency Professionals to maintain the integrity of insolvency processes and uphold professional standards.

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