A Disciplinary Committee under Section 220 of the Insolvency and Bankruptcy Code can be constituted with a single whole-time member without violating statutory provisions.

JUDGMENT :

A.S. CHANDURKAR, J.

1. Rule. Rule made returnable forthwith and heard learned counsel for the parties.

2. The challenge raised in this writ petition filed under Article 226 of the Constitution of India is to the order dated 3^rd July 2023 passed by the Disciplinary Committee consisting of a whole-time member of the Insolvency and Bankruptcy Board of India. By the said order, the show cause notice under Section 220 of the Insolvency and Bankruptcy Code, 2016, read with Regulation 13 of the Insolvency and Bankruptcy Board of India (Inspection and Investigation) Regulations, 2017, dated 16^th May 2023, issued to the petitioner as an Insolvency Professional has been adjudicated and the petitioner’s registration has been suspended for a period of one year from the date of the order.

3. Bereft of unnecessary details, it may be stated that the petitioner came to be appointed as an Insolvency Professional – IP by the Insolvency and Bankruptcy Board of India – IBBI. On the basis of an investigation report submitted by the Investigating Authority, the IBBI through its Deputy General Manager issued a show cause notice to the petitioner under Section 219 of the Insolvency and Bankruptcy Code, 2016 – the Code - calling upon the petitioner to show cause why action as indicated in paragraph 5 of the show cause notice, which included an action of cancellation of the petitioner’s registration, may not be taken. The petitioner responded to the aforesaid show cause notice and it is on that basis that the Disciplinary Committee comprising of a single whole-time member adjudicated the same on 3^rd July 2023.

4. Mr. Pratik Sarkar, the learned counsel for the petitioner inter alia submitted that since the show cause notice was adjudicated by a single member of the Disciplinary Committee in a manner contrary to the proviso to Section 220 of the Code, the order impugned was vitiated. According to him, under the proviso to Section 220 of the Code, it has been clearly stipulated that the Disciplinary Committee would consist of “whole-time members” which indicated that such Committee ought to comprise of more than one whole-time member. To buttress his submission in this regard, the learned counsel sought to rely upon Treatise on the Insolvency and Bankruptcy Code, 2016, wherein after referring to the report of the Joint Committee of Parliament, 2016, it has been stated that the Disciplinary Committee ought to consist of more than one Member. Though Clause 2(1)(c) of the Insolvency and Bankruptcy Board of India (Inspection and Investigation) Regulations, 2017 – Regulations of 2017 defined the expression “Disciplinary Committee” to mean a Committee of whole-time member(s) constituted by the Board under Section 220(1) of the Code, that definition in the Regulations would not control the proviso to Section 220(1) of the Code for it to be contended that the Disciplinary Committee could consist of a single member. In that regard the learned counsel placed reliance on the decision in Kunj Behari Lal Butail and Ors. Vs. State of H.P. and Ors. 2000 INSC 88 and urged that the Regulations had been framed in exercise of powers conferred by Section 196 of the Code for carrying out the purposes of the Code. The same would not empower such Regulations to travel beyond the provisions of the Code. He also placed reliance on the decision in Kerala State Electricity Board and Ors. Vs. Thomas Joseph alias Thomas M.J. and Ors. 2022 INSC 1293. He also referred to an interim order passed by the Gujarat High Court in Bhupendra Singh Rajput Vs. Insolvency and Bankruptcy Board of India (IBBI) (Special Civil Application No. 6988 of 2023 dated 20^th April 2023) wherein after noting the submission that the Disciplinary Committee ought to consist of “whole-time members” which could not be construed to mean a single member, interim relief was granted. Merely because the Regulations were placed before both the Houses of Parliament in accordance with Section 241 of the Code, the same