Validity of authorization for assignment is mandatory before acting as liquidator; disciplinary penalty was sustained.

Acting as a liquidator or insolvency professional requires compliance with the statutory scheme under the Insolvency and Bankruptcy Code, 2016, including valid enrolment, registration and the prescribed authorization for assignment on the relevant date. On the facts, the records showed that the required authorization for assignment was not in force when the petitioner was appointed liquidator, and the earlier rejection of his request supported the finding that he was not duly qualified. The disciplinary authorities therefore had a basis to conclude that he acted in breach of the regulatory requirements, and the disciplinary order and penalty were sustained.

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Issues: Whether the disciplinary finding and penalty imposed on an insolvency professional for acting as liquidator without a valid authorization for assignment were sustainable.

Analysis: The petitioner was appointed as liquidator, but the records showed that the required authorization for assignment had not been in force on the date of appointment. The statutory scheme under the Insolvency and Bankruptcy Code, 2016 requires a person to act as an insolvency professional only after enrolment and registration, subject to the prescribed regulatory conditions. The cited regulations governing authorization for assignment treated the qualification as mandatory, and the prior rejection of the petitioner's request for such authorization supported the finding that he was not duly qualified to function as liquidator. The disciplinary authorities therefore had a basis to hold that the petitioner had acted in breach of the regulatory requirements.

Conclusion: The disciplinary order and the confirmation of penalty were upheld, and the challenge failed.

Final Conclusion: The writ petitions were rejected because the petitioner was found to have acted as liquidator without the necessary authorization, and the claim for compensation did not survive.

Ratio Decidendi: A person cannot lawfully act as a liquidator or insolvency professional unless the statutory and regulatory requirements for enrolment, registration, and authorization for assignment are satisfied on the relevant date.

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