TaxTMI 
TaxTMI 
TaxTMI 
2018 (4) TMI 1439
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....tated 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 issued on 26th December, 2017, was approved by the CoC....
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....ard) 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) Mr. Mohan was appointed as an Interim Resolution Professional for Carnation Auto India Private Limited, the corpo....
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.... 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 of the CoC." (f) He enclosed a draft EoI in respect of another corporate debtor, Athena Demwe Power Limited seeking "approval of the Board before its issue so that there will be no deficiency in the EoI of ....
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....gulations 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 the draft advertisement for EoI and finalized the draft, incorporating the requirement of CA certificate. This change does not have approval of the CoC. (c) Mr. Mohan issued the advertisement inviting EoI from the prospective resolution applicants for Carnation India Auto Private Limited on 26.12.201....
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....r 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 NCLAT in Export Import Bank of India Vs. Resolution Professional JEKPL Pvt. Ltd., Company Appeal (AT)(Insolvency) No. 304 1of 2017, vide its order dated 08.12.2017, directed Mr. Mohan to take into consideration the claim of the appellant and request the CoC to notice the same and bring it to the notice of the AA. However, Mr. Mohan did not bring to the notice of this fact to ....
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....rst 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. Mohan stated in the application before the AA and in the letter to the Board dated 01.01.2018 that the CoC has approved the advertisement for EoI. The fact, however, is that the advertisement approved by the CoC does not require a certificate from a CA. Thus, Mr. Mohan added the requirement of a certificate from a CA without approval of the CoC and thereby contravened section 25(2)(h) of the Code. He also attempted to mi....
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....ions 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 resolution process in contravention of clause 13 of the Code of Conduct. It is the duty of the resolution professional to conduct the entire resolution process. 6. Thus, Mr. Mohan has attempted to mislead the CoC, the AA, and the Board, outsourced his responsibilities to a third person, acted beyond his authority without the approval of the CoC, acted for and on behalf of one of the creditors, and thereby contravened provisions in sections 21(8), 23(1), 25(2)(h....