TaxTMI 
TaxTMI 
2022 (9) TMI 140
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....orders: "We direct IBBI not to initiate any enquiry till further orders, if any enquiry is initiated, the same be halted till further direction from this Court. List IA No. 1346/ND/2021, IA No. 3253/ND/2021 on 05.08.2021 with another application filed by the Operational Creditor being IA No. 190/ND/2021 which is for rectification of the order dated 06.07.2021" 2. The facts giving rise to this Appeal are as follows: i) The Appellant is a statutory body established under Section 188 of the Code to carry out the purposes of the Code that consolidates and amends the laws relating to reorganization and insolvency resolution of corporate persons, partnership firms and individuals in a time bound manner for maximization of the value of assets of such persons to promote entrepreneurship, availability of credit and balance the interest of all stakeholders. It is a unique regulator and regulates profession as well as process. It is pertinent to state herein that the Board has regulatory oversight over Insolvency Professionals, Insolvency Professional Agencies, Registered Valuers, Registered Valuers Organisations and Information Utilities and that it is the duty of the....
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....nquiry is initiated, the same be halted till further direction from the court." vi) Further case is that the Appellant Board was preferred the Appeal bearing Company Appeal (AT) (Ins.) No. 324 of 2019 against order dated 05.02.2019 passed by the Adjudicating Authority, New Delhi Bench quashing the disciplinary proceedings initiated by IBBI and the same was disposed of by this Appellate Tribunal with the following directions: "7. For the reasons aforesaid, we set aside the last portion of the impugned order dated 5th February, 2019 relating to quashing of all disciplinary proceedings. The matter is remitted to the IBBI to pass appropriate order taking into consideration the reference of initiation of proceedings by the Adjudicating Authority as made on 26th April, 2018 and latter acceptance of explanation. The 'Resolution Professional' has already been expunged and it is expected that an order of closure will be passed at an early date. The Appeal stands disposed of. No cost." 3. The Appellant Board preferred the instant Appeal against the impugned order dated 29.07.2021 under Section 61 of the Code on the following amongst grounds: * The Impugned ord....
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....ppropriate enquiry with respect to the conduct and actions of Respondent No. 1. 5. It is further submitted that after perusing the order of the Ld. Adjudicating Authority, the Appellant Board independently examined the issue and vide email dated 14.07.2021 directed the Respondent No. 1 to file a response along with relevant documents with the Appellant Board. Vide email dated 15.07.2021 the Respondent No. 1 sent his response to Appellant's email stating that he was never informed about his appointment as an IRP in the said matter either by the registry or by the operational Creditor and therefore, he could not take any steps in that regard. Surprisingly, while the Appellant Board was examining the response of the Respondent, the Adjudicating Authority passed the second impugned order dated 29.07.2021 'Directed the IBBI not to initiate any enquiry till further orders, if any enquiry is initiated, the same be halted till further directions of this court'. 6. It is further submitted that the Ld. Adjudicating Authority, by issuing the aforementioned directions to the Board, has clearly transgressed it jurisdiction given under the Code and if the impugned order is not ....
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....ections from the Adjudicating Authority. 8. It is further submitted that Section 240 of the Code empowers the Board to make necessary regulations and rules to carry out the provisions under the Code. In furtherance to the said powers conferred under the Code, the Appellant Board has made various regulations, including, 'IBBI (Insolvency and Investigation) Regulations, 2017'. It is submitted that the said Regulations provides a detailed procedure as to how an inspection or an investigation is to be conducted by the Board. Under the Regulations, the Insolvency Professional is given adequate opportunity to present his case to the Board and the Board is required to pass appropriate orders only after taking into consideration all the facts and circumstances. Therefore, a perusal of the provisions would evince that neither the Code, not the rules framed thereunder confers any power to the Adjudicating Authority to interfere with the process f inspection and investigation initiated by the Board, not does it have the power to direct the Appellant board to take or not to take actions. 9. It is further submitted that as per the law laid down and interpreted by Hon'ble Supre....
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.... the Adjudicating Authority cannot travel beyond the powers granted to it under the Statute. It is pertinent to note that during the pendency of the present Appeal, the Ld. Adjudicating Authority, vide Order dated 07.03.2022 (at page 8 of the Reply filed by the Respondent No. 2) has allowed the Respondent No. 1 to continue as the IRP in said matter. Inspite of the fact that the Appellant Board was ceased of the issue and Ld. Adjudicating Authority observed, '..... Though, the Operational Creditor has also failed to deposit the amount and did not approach the IRP, but it is apparently the duty of the Registry to intimate the order regarding initiation of the CIRP proceedings to the Ld. IRP. Therefore, apparently the default has occurred due to the reason that the registry could not communicate properly to the Ld. IRP.' 12. It is further submitted that inspection and investigation into the actions of an Insolvency Professional is a fact finding process and the Ld. Adjudicating Authority does not have the power to interfere with this process in any manner, Therefore, in view of the above, this Appellate Tribunal may be pleased to set aside both the impugned orders in view o....
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....ar to be the IRP for the Corporate Insolvency Resolution Process of the Corporate Debtor. The Respondent No. 2 declares that so far as the appointment of Aditya Kumar as an IRP by the Ld. Adjudicating Authority is concerned the Respondent No. 2 is left with no grievance and accepts him as the IRP. 15. After hearing the parties and having gone through the record, we place reliance on the Judgment of the Hon'ble Supreme Court in the case of 'K. Sashidhar Vs. Indian Overseas Bank & Ors. [(2019) 12 SCC 150]' wherein, in paragraph 58, it is held as under: "58. Indubitably, the inquiry in such an appeal would be limited to the power exercisable by the resolution professional under Section 30(2) of the I&B Code or, at best, by the adjudicating authority (NCLT) under Section 31(2) read with Section 31 (1) of the I&B Code. No other inquiry would be permissible. Further, the jurisdiction bestowed upon the appellate authority (NCLAT) is also expressly circumscribed. It can examine the challenge only in relation to the grounds specified in Section 61(3) of the I&B Code, which is limited to matters "other than" enquiry into the autonomy or commercial wisdom of the dissenting financi....