TaxTMI 
TaxTMI 
TaxTMI 
2024 (6) TMI 19
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.... as 'the IBC'), the National Company Law Tribunal (NCLT), Ahmedabad passed an order admitting the application filed by the ICICI Bank commencing the Corporate Insolvency Resolution Process (hereinafter referred to as 'the CIRP') of the Corporate Debtor. b. The Petitioner was appointed as the Interim Resolution Professional of the Corporate Debtor. Vide Order dated 25.04.2019, the NCLT Ahmedabad directed that the Corporate Debtor shall undergo liquidation under Section 33 (2) of the IBC and the Petitioner was to act as a Liquidator to discharge duties under Section 35 of the IBC. c. On 02.06.2021, the Petitioner received a Notice of Inspection of the liquidation assignment of Corporate Debtor which was being handled by the Petitioner. d. On 04.04.2022, the Petitioner received a draft inspection report under Regulation 6(1) & (2) of the IBBI Inspection and Investigation Regulations, 2017 (hereinafter referred to as 'the Inspection Regulations'). e. On the basis of the draft inspection report, a Show Cause Notice dated 26.07.2022 was issued to the Petitioner by the IBBI asking the Petitioner to show cause as to why disciplinary action should not be taken against the Petitioner....
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....n of the assets of the Corporate Debtor. It is further alleged that the valuation report dated 15.07.2019 and corrigendum dated 19.11.2019, submitted by RBSA Valuation Advisors LLP were signed by Mr. Manish Kaneria as one of the partners of RBSA and not in his individual capacity, and the valuation report dated 13.07.2019, was signed by Rakesh Narula as partner of Rakesh Narula & Co. The Board, therefore, held that the Petitioner has acted in contravention of IBBI Circular No. IBBI/RV/019/2018 dated 17.10.2018 which mandates the liquidator to appoint only registered valuers to conduct valuation under the IBC and Regulations made thereunder. It was also found that the valuers appointed by the Petitioner namely Manish Kaneria engaged one Mr. Rajeev Shah to obtain a valuation of another asset class of Securities and Financial assets, and Rakesh Narula engaged Mr. Tejas Dave for the valuation of Land and building asset class and Chander Sawhney for the valuation of another Securities and Financial Assets class. The IBBI has held that rule 8 (2) of Companies (Registered Valuers and Valuation Rules), 2017 provides for obtaining inputs for the valuation report or get a separate valuation ....
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....travention regarding influencing registered valuers to change the value of the assets and likewise, the Petitioner could not have been held guilty for other charges as well. 6. With regard to the charge of prescribing non-refundable participation fee on prospective bidders for participating in the auction process at the time of submission of Expression of Interests is concerned, learned Counsel for the Petitioner states that though the Show Cause Notice indicates that Regulation 36A (4) (d) and 36B (4) of the CIRP Regulations have been violated by the Petitioner, the Board itself has, in the impugned Order, accepted the contention of the Petitioner that Regulation 36A (4) (d) and 36B (4) of the CIRP Regulations do not apply to the infraction in the present case. He further draws the attention of this Court to a notification bearing IBBI/2021-22/GN/REG079 dated 30.09.2021 by which a proviso has been inserted in Schedule I-(1) (3) of the Liquidation Regulations prohibiting payment of non-refundable deposit or fee for participation in the auction process. Learned Counsel for the Petitioner states that when the auction process advertisements were issued on 17.09.2019, 27.09.2019, 22.1....
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....ctive bidders for participating in the auction process. In view of the above, this Court is not inclined to accept the view taken by the Board that the Petitioner has violated any Code of Conduct under IP regulations. 9. With regard to the charge against the Petitioner for appointing unregistered valuers, it is stated by the learned Counsel for the Petitioner that the fact that the valuation report has been given in the name of firm does not mean that the valuation was not done by the registered valuers. He states that at best the incident can be termed as irregularity and the valuation report is valid as it has been done by a registered valuer. He further states that the fact that bills have been raised in the name of the firm is also immaterial as long as the valuation report cannot be found fault with. He states that the engagement letters were issued in the name of Mr. Manish Kaneria and Mr. Rakesh Narula, in their individual capacity, and the fact that while drafting the minutes for the meeting of the Stakeholders Consultation Committee on 19.06.2019, names of partnership firms of Mr. Kaneria and Mr. Narula have been used instead of their actual names does not change the fact....
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....dvisory LLP, in which the Petitioner himself is a partner, and paying more fees to it than what was paid to the Petitioner himself as the Liquidator of the Corporate Debtor, learned Counsel for the Petitioner contends that even though fee has been claimed by the BRAL, the same has yet not been paid by the Board. Learned Counsel for the Petitioner draws the attention of this Court the remunerations paid to BRAL to contend that only 50% of the claimed amount has been paid and the remaining 50% is yet to be paid. He, therefore, contends that the Petitioner has not violated any provisions of the Regulations of the IBBI. He contends that BRAL was appointed for providing support services to the Liquidator after taking the consent of the Committee of Creditors and, therefore, nothing has been done by the Petitioner without disclosing it to the Committee of Creditors. He further states that Petitioner has not violated Regulation 7 (2) of the Liquidation Regulations which prohibits the liquidator from appointing a professional who is his relative, is a related party of the Corporate Debtor or who has served as an auditor to the Corporate Debtor in five years preceding the date of commenceme....
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....y to uphold the integrity of the process. As fiduciaries, they are entrusted with the responsibility of managing the affairs of insolvent entities and any hint of impropriety or conflict of interest could undermine the credibility of the entire insolvency process. A liquidator is entrusted with safeguarding the interests of all parties involved, navigating complex legal and financial terrain with complete transparency. With such authority comes a heightened obligation to exercise discretion judiciously and in the best interests of all stakeholders involved. Therefore, while the official liquidator enjoys a significant degree of autonomy, they are bound to wield their power responsibly and ethically within the confines of the IBC framework. Upholding ethical principles and demonstrating unwavering commitment to fairness are paramount for an official liquidator to effectively discharge their duties under the IBC. At the same time, it is imperative that a liquidator is given the autonomy that is required to take decisions that may help in actualizing the real value of the assets or materials that are being liquidated. 16. A perusal of the records reveals that the Petitioner appointed....