TaxTMI 
TaxTMI 
2018 (4) TMI 1439
X X X X Extracts X X X X
X X X X Extracts X X X X
..... At the hearing, he reiterated what he has stated in the written submission. 3. Mr. Mohan has submitted para wise response to the findings in the ex-parte interim order. I, however, do not find anything new in his submissions that has not been dealt in the ex-parte interim order or that disproves a finding in the ex-parte interim order. Let me take two examples: (i) It has been found in the ex-parte interim order that Mr. Mohan inserted the requirement of the certificate of CA in the Expression of Interest (EoI) issued on 26th December, 2017 without the approval of CoC, in the matter of Carnation Auto India Private Limited. Mr. Mohan has now responded that the "Committee of Creditors in its meeting held on January 05, 2018 confirmed that the published EoI was in accordance with section 25(2)(h) of the Insolvency and Bankruptcy Code, 2016." This only indicates that the EoI was in accordance with the section 25(2)(h) of the Insolvency and Bankruptcy Code, 2016, ignoring for a moment whether the CoC is competent to make this confirmation. It does not say anything about the insertion of requirement of the certificate of CA in the EoI. It does not even say that the EoI, as ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion and Investigation) Regulations, 2017 The Insolvency and Bankruptcy Board of India (hereafter, Board) has referred the Interim Inspection Report (hereafter, IIR) dated 16.02.2017 to the Disciplinary Committee under sub-regulation (3) of regulation 5 of the Insolvency and Bankruptcy Board of India (Inspection and Investigation) Regulations, 2017 (hereafter, regulations) for appropriate action urgently. 2. The Board, in exercise of its powers under section 218 of the Insolvency and Bankruptcy Code, 2016 (Code) read with the IBBI (Inspection and Investigation) Regulations, 2017, vide its order dated 04.01.2018, has appointed the Inspecting Authority (hereafter, IA) to conduct an inspection of Mr. Mukesh Mohan, Insolvency Professional, Regn. No. IBBI/IPA-001/IP-P00018/2016-17/10042 on having reasonable ground to believe that Mr. Mohan had contravened the provisions of the Code, regulations made, and directions issued by the Board thereunder. The IA has submitted an IIR on 16.02.2018 under sub-regulation (3) of regulation 5 of the regulations. 3. On examination of the IIR and the documents attached thereto and other material available on record, I observe that - (i)....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ting with Forensic Auditors and Punjab National Bank (PNB) on 21st December, 2017, "the draft advertisement for EoI was approved and signed by the Mr. D. Vasudevan, Deputy General Manager of the PNB, one of the members of the CoC after certain modifications as per the observations of the financial creditor." (c) As regards to the condition mentioned in Expression of Interest that, "Resolution Applicants also to submit an affidavit supported with CA certificate that they are eligible to be Resolution Applicants under Insolvency and Bankruptcy Code, 2016, all amendments, Rules and Regulations made thereunder", he submitted that "the same was approved by the Punjab National Bank, member of Committee of Creditors in the meeting held on December 21, 2017." (d) He submitted that "most of the deficiencies pointed out by the Board in case of EOI of Carnation Auto India Pvt. Ltd. exist in most advertisements for EoI published in the past." (e) He may be "allowed to issue an addendum for the deficiencies pointed out" by the Board and "the cost of addendum may form part of the corporate insolvency resolution process cost else it will be major penalty on the members ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on from Mr. Mohan, the IA submitted the IIR on 16.02.2018 to the Board on the basis of material available on record, wherein it is stated that IA is of the considered opinion that the conduct of Mr. Mohan in the ongoing cases is violative of provisions of the Code, rules and regulations thereunder and in the interest of all the stakeholders, it is appropriate that relevant facts are brought to the notice of the Disciplinary Committee for further action, if any, pending completion of the inspection. (xvi) The Board has referred the IIR dated 16.02.2017 under sub-regulation (3) of regulation 5 of the regulations to the Disciplinary Committee, for appropriate action urgently. 4. The findings of the IIR, inter alia, are as under: - (a) The agenda and minutes of the meeting of the CoC held on 05.12.2017 show that the CoC approved the draft advertisement for EoI and that draft did not contain the requirement of a CA certificate for determination of eligibility of the resolution applicants. (b) The minutes of the meeting of the RP with Forensic Auditors and PNB held on 21.12.2017 show that an officer of the PNB, who is one of the creditors, made changes in th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essional, 1106-1107, New Delhi House, Barakhamba Road, Connaught Place, New Delhi-110001." (ii) The minutes of the meeting of Mr. Mohan with Forensic Auditor and PNB on 21.12.2017 is extracted here: "Resolution Professional requested PNB to vet the Expression of Interest for Resolution Plan for Carnation Auto India Private Limited. After detailed discussion the Expression of Interest was finalised, which is enclosed with these minutes and forms an integral part of these minutes". (f) Mr. Mohan was specifically directed by the Board vide email dated 06.03.2017, at the time of issuance of the Certificate of Registration as an Insolvency Professional, to quote Registration Number, email id and address registered with the Board in all his future correspondences with various agencies relating to insolvency professional related work. But he did not comply with these directions in the advertisement inviting EoI. (g) In the matter of Athena Demwe Power Limited, Mr. Mohan wanted approval of EoI from the Board before its issue though there is no such provision in the Code. Thus, he tried to push the EoI to the Board for approval. (h) The Hon'ble N....
X X X X Extracts X X X X
X X X X Extracts X X X X
....shall not form part of the insolvency resolution process cost". However, Mr. Mohan stated in his application before the AA that the fresh advertisement would impose burden on the corporate debtor. He made similar mis-presentation to the Board in his letter dated 01.03.2018 Thus, he attempted to mislead the AA and the Board in contravention of clauses 1, 2, 9, 12 and 14 of the Code of Conduct under the first schedule of the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulation, 2016. (iv) Mr. Mohan stated in his letter dated 01.01.2018 to the Board and in the application before the AA that the advertisement made by him was in accordance with the best market practice. He enclosed several advertisements in support of his contention. The fact, however, is that none of the advertisements provided by him required a certificate from a CA to provide a certificate of eligibility of resolution applicants. Thus, he attempted to mislead the Board and the AA in contravention of clauses 1, 2, 3, 12 and 14 of the Code of Conduct. (v) Section 25(2)(h) of the Code requires a resolution professional to lay down criteria with the approval of the CoC. Mr. Moh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ponsibility of the insolvency professionals is ascertaining whether a prospective resolution applicant is eligible under the Code to submit a resolution plan. Mr. Mohan, in the instant case, outsourced his responsibility to a third person to certify eligibility of resolution applicants in contravention of sections 23(1) and 30(2)I of the Code. (ix) Mr. Mohan made false statements in his letter dated 01.01.2018 and contravened the provisions of the Code and regulations under section 70 (2) read with section 235A. B. In the matter of JEKPL Pvt. Ltd. (x) The Hon'ble Appellate Authority directed Mr. Mohan to take into consideration the claim of the appellant (Export Import Bank of India) and request the CoC to notice the same and bring it to the notice of AA. It appears that Mr. Mohan did not comply with this direction. Nevertheless, the IA should conclude the facts in this regard in its final report. C. In the matter of Athena Demwe Power Limited (i) Mr. Mohan sought approval of the Board for advertisement for EoI. Such approval is not envisaged under the Code. In the process, he tried to avoid responsibility cast on him under the Code and delayed the resolu....