Court grants interim relief, stays IBBI order suspending valuer registration, emphasizes reasoned administrative action

The court granted interim relief to the Petitioner by staying the impugned order issued by IBBI, suspending the Petitioner's registration as a valuer based on pending criminal proceedings. The court emphasized the importance of reasoned administrative action, highlighting that mere allegations should not tarnish one's professional integrity. The court also noted that the existence of an alternate appellate remedy does not always bar the writ jurisdiction of the High Court under Article 226 of the Constitution of India. The case is scheduled for final disposal on 16th March 2023.

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Issues Involved:
1. Existence of an alternate appellate remedy.
2. Reasonableness and proportionality of administrative action.
3. Evaluation of "fit and proper person" criteria under the RV Rules.
4. Impact of pending criminal proceedings on professional registration.
5. Jurisdiction and maintainability of the writ petition.

Detailed Analysis:

Existence of an Alternate Appellate Remedy:
The primary issue raised by the Respondent (IBBI) was the existence of an appellate remedy available to the Petitioner. However, the court noted that the existence of an appellate remedy is not an absolute bar to the exercise of writ jurisdiction under Article 226 of the Constitution of India. Citing the Supreme Court decision in *Radhakrishna Industries vs State of Himachal Pradesh & Ors.* [(2021) 6 SCC 771], the court emphasized that there are well-known exceptions to the rule of exhausting alternate remedies, and the existence of an alternate remedy does not per se divest a High Court of its powers under Article 226.

Reasonableness and Proportionality of Administrative Action:
The court underscored that one of the principles in evaluating administrative or executive action in judicial review is whether the standard applied is reasonable and proportionate. The court emphasized that natural justice requires an opportunity to be heard and a reasoned order. The decision-making process must involve a proper application of mind, and where these elements are lacking, a writ court is not denuded of its powers.

Evaluation of "Fit and Proper Person" Criteria under the RV Rules:
The Petitioner, a Chartered Accountant and registered valuer, faced a show cause notice from IBBI based on a charge-sheet filed by the Economic Offences Wing (EOW) related to his association with PMC Bank. The IBBI's order suspended the Petitioner's registration, citing that the pending criminal proceedings impacted his integrity and reputation, thus making him ineligible under Rule 3(1)(k) of the Companies (Registered Valuers and Valuation) Rules, 2017. The court found it difficult to comprehend the rationale behind the order, noting that mere allegations or accusations should not impeach a person's integrity, reputation, and character. The court highlighted that the presumption in criminal jurisdiction is that a person is innocent until proven guilty.

Impact of Pending Criminal Proceedings on Professional Registration:
The court criticized the IBBI's order for assuming that the mere pendency of criminal proceedings was sufficient to tarnish the Petitioner's professional integrity and character. The court noted that charges had not even been framed, and the Petitioner could potentially be discharged or acquitted. The court found the IBBI's logic inherently absurd, as it suggested that the Petitioner was already guilty based on mere accusations.

Jurisdiction and Maintainability of the Writ Petition:
The court addressed the issue of jurisdiction and maintainability by noting that the Petitioner disputed the existence of an effective alternate appellate remedy. The court observed that if the matter of an alternate remedy is controversial and not undisputed, the intervention of the writ court is justified. The court also noted the general order of delegation of powers and functions, which complicated the Respondent's claim about the existence of an appellate remedy.

Conclusion:
The court issued a stay on the impugned order, granting interim relief to the Petitioner. The court directed the Respondent to file an Affidavit in Reply on merits and listed the petition for final disposal on 16th March 2023. The court's decision highlights the importance of reasoned administrative action and the protection of professional integrity against mere allegations.

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