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A. S. CHANDURKAR, RAJESH S. PATIL
Kairav Anil Trivedi – Appellant
Versus
Insolvency & Bankruptcy Board of India (IBBI), Through its Chairperson – Respondent
JUDGMENT :
(A.S. Chandurkar, J.) :
1. Rule. Rule made returnable forthwith and heard the learned counsel for the parties.
2. The challenge raised in this writ petition is to the show cause notices dated 26th October 2023 and 10th April 2024 that have been issued to the petitioner by the Insolvency & Bankruptcy Board of India proposing to take action against him for violations under the Insolvency and Bankruptcy Code, 2016 and Regulations framed thereunder. The petitioner besides seeking restoration of his Authorization for Assignment also challenges the validity of Clause 23A provided in the Schedule to the Insolvency and Bankruptcy Board of India (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2016 (“2016 Regulations”) as well as Clause 23A of the Bye-Laws of ICSI Institute of Insolvency Professionals by urging the same to be ultra vires.
3. Facts relevant for considering the challenge as raised in the writ petition are that the petitioner is presently registered with the Insolvency & Bankruptcy Board of India (“IBBI”) as an Insolvency Professional (“IP”). This registration is granted under The Insolvency & Bankruptcy Code, 2016 (“Code”) read wit
The court affirmed that the IBBI's issuance of show cause notices and the suspension of the Authorization for Assignment were valid under the Insolvency and Bankruptcy Code, 2016 and its regulations.
The main legal point established in the judgment is that Regulation 23A and Section 204 (a) (b) (c) (d) and (e) of the Insolvency and Bankruptcy Code, 2016, were found to be constitutional and not vi....
The court upheld the suspension of a Resolution Professional for one year due to lack of due diligence and failure to communicate claims, affirming the Disciplinary Committee's authority under the In....
The court emphasized that disciplinary penalties must be proportionate to the misconduct and factors such as prior penalties and delays in proceedings must be considered.
The court clarified the applicability of RBI guidelines in the context of ongoing CIRP and upheld the validity of the impugned Show-Cause Notice, emphasizing compliance with the RBI guidelines.
Proceedings for declaring wilful defaulters under RBI guidelines can proceed even amidst ongoing insolvency resolution process, provided proper procedures are followed and no prejudice is shown.
A regulatory circular cannot retroactively amend established rules without formal procedures; clarifications must not introduce new legal standards.
The court affirmed that a show cause notice issued by SEBI is valid despite claims of delay and non-application of mind, emphasizing the necessity of fair opportunity for the petitioners to respond.
Resolution of corporate insolvency - Notice - An act of wilful default, if committed by a promoter/whole-time director/guarantor of corporate debtor who was in charge at relevant period, is not oblit....
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