TaxTMI 
TaxTMI 
2021 (2) TMI 873
X X X X Extracts X X X X
X X X X Extracts X X X X
....ho is a Professional Member of the Indian Institute of Insolvency Professionals of ICAI (IPA) and an IP registered with the Insolvency and Bankruptcy Board of India (IBBI) with Registration No. IBBI/IPA-001/IP-P00184/2017-2018/10852. Background 1.1 The IBBI had issued on 28th August, 2020, the SCN to Mr. Venkata Sivakumar for accepting the assignment as the Liquidator in the Corporate Insolvency Resolution Process (CIRP) of M/s The Jeypore Sugar Company Limited (CD) after 31st December, 2019 without holding a valid Authorisation for Assignment (AFA) from his IPA. 1.2 The IBBI referred the SCN, response of Mr. Sivakumar and other material available on record to the Disciplinary Committee (DC) for disposal of the SCN in accordance wi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gs 4. The DC after taking into consideration the SCN, the reply to SCN of Mr. Sivakumar and also the provisions of the Code, rules and the regulations made thereunder finds as follows. 4.1 The DC notes that the Regulation 7A of IP regulations requires every IP to have AFA before undertaking any assignment after 31st December 2019. Regulation 7A reads as follows: "7A. An insolvency professional shall not accept or undertake an assignment after 31st December, 2019 unless he holds a valid authorisation for assignment on the date of such acceptance or commencement of such assignment, as the case may be: Provided that provisions of this regulation shall not apply to an assignment which an insolvency professional is undertaking as ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cy professional shall abide by the following code of conduct: - (a) to take reasonable care and diligence while performing his duties; (b) to comply with all requirements and terms and conditions specified in the byelaws of the insolvency professional agency of which he is a member; and (e) to perform his functions in such manner and subject to such conditions as may be specified." 4.5 The DC further notes that the certificate of registration granted to an IP is subject to the condition that he should follow at all times the provisions of the Code and Regulations and the bye-laws of Insolvency Professional Agency of which the IP is a member and also follow the Code of Conduct specified in the First Schedule to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sentials for conducting various processes under the Code, to be effective from 1st January, 2020. Thus, adequate time was given to the Insolvency Professionals to obtain AFA. The DC notes that Mr. Sivakumar did not hold valid AFA even after more than four months from the date of enforcement of the provisions. The submission of Mr. Sivakumar that liquidation of the CD is not a new assignment is not tenable as the order for liquidation is separately passed under section 33 of the Code and liquidator is appointed subject to his consent as per section 34 of the Code. The CIRP and Liquidation process are entirely separate and require separate consent from the Insolvency Professionals. The public announcements with regard to both the processes ar....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ouncement that the Corporate Debtor is in liquidation. In relation to officers/employees and workers of the Corporate Debtor, taking into consideration Section 33(7) of IBC, 2016, this order shall be deemed to be a notice of discharge" Mr. Sivakumar has applied for AFA on 31st December, 2019 however, the same has not been granted. The DC finds that Mr. Sivakumar has contravened Regulation 7A of the IP Regulations by accepting the assignment as Liquidator of the CD after 31st December, 2019 without holding a valid AFA. 5.1 The DC finds that an order has been passed against Mr. Sivakumar on 1st December, 2020 by the Disciplinary Committee of IPA for accepting assignment as Liquidator after 31st December, 2019 without holding a valid AFA....