Summary : The Insolvency and Bankruptcy Board of India (IBBI), through its Disciplinary Committee, ordered the suspension of insolvency professional Shri Alok Kailash Saksena for two years following its examination of irregularities in the corporate insolvency resolution process (CIRP) of Associate Decor Limited. The CIRP commenced on 26 October 2018 following an application by Oriental Bank of Commerce under Section 7 of the Insolvency and Bankruptcy Code, 2016. The disciplinary proceedings arose from a complaint received in May 2024, followed by a show-cause notice dated 30 July 2024. The Committee rejected preliminary objections concerning parallel judicial proceedings, the validity of the show-cause notice and alleged denial of natural justice. It clarified that proceedings concerning approval of a resolution plan and disciplinary proceedings examining the professional conduct of an insolvency professional operate within distinct statutory jurisdictions. The Committee found that the Resolution Professional failed to include the audited financial statements for FY 2016-17 and FY 2017-18 in the Information Memorandum, contrary to Regulation 36(2)(c) of the CIRP Regulations. Although the professional explained that the corporate debtor’s accounts were incomplete, its server had been damaged by fire and the previous management had not completed the audits, the Committee held that disclosure of these difficulties could not substitute for statutory compliance. It also found that the professional had not initiated the appointment of statutory auditors promptly despite knowing about the deficiencies from the initial Committee of Creditors (CoC) meetings. The Committee emphasised that audited financial information enables prospective resolution applicants to assess the corporate debtor reliably and supports transparency, informed bidding and value maximisation. The disciplinary findings extended to the failure to act diligently on the CoC’s direction to explore an insurance claim for damaged inventory, inadequate maintenance and production of records required by tax authorities, delayed circulation of minutes of several CoC meetings beyond the prescribed 48-hour period, and failure to obtain fresh GST registration as required by Notification No. 11/2020-Central Tax dated 21 March 2020. The Committee considered these failures significant because they affected the proper administration of the insolvency process and exposed the corporate debtor to potential financial consequences, including substantial tax demands and penalties. The Committee nevertheless refrained from deciding Contravention V concerning the resolution plan because the question of its conditional nature remained pending before the Adjudicating Authority. Exercising powers under Section 220(2) of the Insolvency and Bankruptcy Code read with Regulation 13 of the IBBI Inspection and Investigation Regulations, the Committee suspended the professional’s registration for two years, rendering him ineligible to continue existing assignments under Section 206. It directed him to inform the Board about the outcome of IA No. 161/2020 and subsequent proceedings, leaving the relevant contravention open for future examination. The order specifies that it comes into force 30 days after its issuance.
INSOLVENCY AND BANKRUPTCY BOARD OF INDIA
(Disciplinary Committee)
Order No. IBBI/DC/353/2026 | Dated: 13 November 2026
This Order disposes of the Show Cause Notice (SCN) No. IBBI/C/2024/01132/883/488 dated 30.07.2024, issued to Shri Alok Kailash Saksena, an Insolvency Professional registered with the Insolvency and Bankruptcy Board of India (IBBI/Board) with Registration No. IBBI/IPA-001/IP-P00056/2017-18/10134, who is a Professional Member of the Indian Institute of Insolvency Professionals of ICAI.
1. Background
1.1 The National Company Law Tribunal, Bengaluru Bench, (AA) vide its order dated 26.10.2018, admitted an application filed by M/s. Oriental Bank of Commerce under Section 7 of the Insolvency and Bankruptcy Code, 2016 (Code) for initiating Corporate Insolvency Resolution Process (CIRP) of M/s. Associate Decor Limited (CD) and Shri Alok Kailash Saksena was appointed as Interim Resolution Professional (IRP) in the matter and later he was appointed as the Resolution Professional (RP) of CD.
1.2 The Board received a complaint dated 17.05.2024 against Shri Alok Kailash Saksena about certain irregularities in the CIRP of the CD. The Board vide emails dated 06.06.2024 and 11.07.2024 sought reply from Shri Alok Kailash Saksena on the allegation raised in the complaint. In response to the said emails, replies were received by the Board from Shri Alok Kailash Saksena on 12.06.2024, 18.07.2024 and 24.07.2024. The Board examined the allegations in the above complaint vis-a-vis the reply to the same and based on such examination and material available on record, the Board formed a prima facie opinion that Shri Alok Kailash Saksena had contravened provisions of the Code and Regulations made thereunder and issued the SCN to Shri Alok Kailash Saksena. Shri Alok Kailash Saksena provided his response to the SCN on 23.08.2024.
1.3 The SCN, along with the response of Shri Alok Kailash Saksena to the SCN, was referred to Disciplinary Committee (DC) for disposal. The personal hearing of Shri Alok Kailash Saksena before the DC was initially scheduled for 21.03.2025, and an email in this regard was sent to Shri Alok Kailash Saksena on 12.03.2025. The link for joining the personal hearing was subsequently shared with him vide email dated 20.03.2025. On the same day, Shri Alok Kailash Saksena requested that the personal hearing be rescheduled on account of a family emergency.
1.4 Thereafter, the Board, vide email dated 29.05.2025, sought certain clarifications and documents from Shri Alok Kailash Saksena in relation to the alleged contraventions. In response, Shri Alok Kailash Saksena, vide email dated 18.06.2025, provided certain submissions and sought additional time to furnish the requisite documents. He further submitted that the issues raised in the complaint before the Board were identical to the issues raised by the suspended director in IA No. 10 of 2022, which had been heard and reserved for orders by the AA. On 30.06.2025, Shri Alok Kailash Saksena furnished certain documents and sought time until 10.07.2025 to provide the remaining documents. On 10.07.2025, he furnished additional submissions and stated that the AA had informed on 08.07.2025 that the order in IA No. 161 of 2020 would be pronounced on 30.07.2025. Subsequently, vide email dated 02.08.2025, Shri Alok Kailash Saksena informed to the Board that on 30.07.2025, the AA had informed that the order was not ready and had adjourned the matter to 26.08.2025 for orders.
1.5 Thereafter, vide email dated 14.08.2025, Shri Alok Kailash Saksena submitted that the issues raised in the complaint and the SCN were identical to those raised by the ex-promoter and the complainant before the AA in IA No. 10 of 2022. He further stated that the said application had been fully heard by the Bench and was reserved for orders on 26.08.2025. Accordingly, Shri Alok Kailash Saksena requested that the personal hearing before the DC be scheduled after the pronouncement of the order in IA No. 10 of 2022. He also stated that he would inform the Board immediately upon pronouncement of the order. Thereafter, Shri Alok Kailash Saksena vide his email dated 03.09.2025 informed to Board that on 26.08.2025 also, the AA had stated that the order was not ready and had accordingly posted the matter to 24.09.2025. Ultimately, on 06.02.2026, Shri Alok Kailash Saksena furnished a copy of the order dated 12.01.2026 passed by the AA in IA No. 10 of 2022, whereby the said application was dismissed. He also made additional submissions in the matter.
1.6 Thereafter, the DC scheduled the personal hearing of Shri Alok Kailash Saksena before the DC for 18.02.2026. On 17.02.2026, Shri Alok Kailash Saksena requested that the personal hearing be rescheduled to another date as he was travelling. Subsequently, vide communication dated 21.02.2026, he submitted that the question of approval of the Resolution Plan was being considered by the third member of the Bench, who had posted the matter to 23.02.2026 for resolving the difference of opinion in relation to the pronouncement of the order on the Resolution Plan. He further stated that he would be occupied with the said matter for some time and would communicate a convenient date for the personal hearing. Thereafter, the DC fixed the personal hearing for 21.07.2026. However, vide email dated 14.07.2026, Shri Alok Kailash Saksena informed to the DC that he was travelling to Udaipur and, in support thereof, enclosed a copy of his air tickets. He accordingly requested that the personal hearing be rescheduled. The personal hearing was thereafter rescheduled to 06.08.2026. Shri Alok Kailash Saksena again vide email dated 30.07.2026 requested that the hearing be further rescheduled, stating that his Advocate, Shri Ashish Makhija, was not available, and requested that it be fixed on 07.08.2026, 10.08.2026 or 11.08.2026.
1.7 Accordingly, the DC, vide email dated 06.08.2026, rescheduled the personal hearing to 07.08.2026. Shri Alok Kailash Saksena availed the opportunity of personal hearing before the DC through virtual mode on 07.08.2026, along with his Advocate, Shri Deep Tarun Bisht. Pursuant to the personal hearing, Shri Alok Kailash Saksena submitted additional written submissions vide emails dated 17.08.2026 and 24.08.2026.
2. Preliminary Objections raised by Shri Alok Kailash Saksena. 2.1 Forum shopping by the complainant and prevailing orders of the AA
2.1.1. Before going into the merits of the instant SCN, the DC notes that in his reply to SCN and in various emails sent to the Board, Shri Alok Kailash Saksena has at length submitted that the complainant has raised materially identical allegations before the AA (IA 10/2022 & IA 161/2020), Hon’ble Karnataka High Court (WP 483/2023), and the Supreme Court (Civil Appeal No. 48 of 2025 arising out of SLP (C) No. 11599 of 2024), which amounts to forum-shopping and an abuse of process, and that judicial prudence requires these proceedings be kept in abeyance pending outcomes elsewhere. The DC finds it appropriate to deal with this issue first.
Examination by the DC
2.1.2. The DC has gone through the orders passed in the above mentioned court proceedings. The DC notes that Hon’ble Supreme Court vide judgment dated 03.01.2025 in the matter of Mohammed Enterprises (Tanzania) Ltd. v. Farooq Ali Khan & Ors. (Civil Appeal No. 48 of 2025 with Civil Appeal Nos. 49 and 50 of 2025, 2025 INSC 25) had set aside the order of Hon’ble Karnataka High Court in WP 483/2023 dated 22.04.2024, and observed as under: –
“11. Having considered the matter in detail, we are of the opinion that the last point taken by Mr. Shyam Divan, that there is no delay in approaching the High Court, must be rejected. The reason is this. The CIRP proceedings commenced on 26.10.2018. The sheet anchor of Mr. Divan submission and also the justification for the High Court to assume jurisdiction on the ground that principles of natural justice were violated, when respondent no.1 was not given a notice before the 19th COC meeting, occurred way back on 11.02.2020. However, the jurisdiction of the High Court was invoked only on 04.01.2023. The time gap between these two events is almost three years. The initiation and continuation of proceeding by Swamitva Consortium before the Adjudicating Authority, NCLT or the Supreme Court cannot lend any justification whatsoever in approaching the High Court so late.
12. Further, it is also an admitted fact that on 06.10.2022, respondent no. 1 moved an interlocutory application before the Adjudicating Authority seeking rejection of the resolution plan filed by the appellant. The grounds taken in the interlocutory application are the same as those in this appeal. It is not as if the High Court was unaware of respondent no. 1 availing the statutory remedy under the Code. At least on this ground, the High Court should have relegated respondent no. 1 to the procedure under the Code and permitted him to continue the remedy that he has chosen to adopt. We may hasten to add that it is not necessary for us to enter into the merits of the matter to examine the amounts offered by respondent no. 1 and to contrast with the offer made by the applicant.
13. The jurisdiction and power of the Adjudicating Authority under Section 60(5)(c) has already been reiterated by this Court in Committee of Creditors of Essar Steel India Ltd. v. Satish Kumar Gupta and Gujarat Urja Vikas Nigam Limited v. Amit Gupta. It is important to note that CIRP proceedings commenced on 26.10.2018, six years ago, and the resolution plan of the appellant was approved in 2020, four years back. The importance of concluding the CIRP proceedings was highlighted by this Court, on a number of occasions. In a recent order in Committee of Creditors of KSK Mahanadi Power Company Ltd. v. M/s Uttar Pradesh Power Corporation Ltd (supra), this Court has observed that an unjustified interference with the proceedings initiated under the Insolvency and Bankruptcy Code 2016, breaches the discipline of law.
14. In view of the delay in approaching the High Court, particularly when respondent no.1 himself has initiated proceedings under the Code by filing interlocutory applications seeking similar relief, we are of the opinion that the High Court committed an error in entertaining the writ petition.
15. Apart from delay and laches, High Court should have noted that Insolvency and Bankruptcy Code is a complete code in itself, having sufficient checks and balances, remedial avenues and appeals. Adherence of protocols and procedures maintains legal discipline and preserves the balance between the need for order and the quest for justice. The supervisory and judicial review powers vested in High Courts represent critical constitutional safeguards, yet their exercise demands rigorous scrutiny and judicious application. This is certainly not a case for the High Court to interdict CIRP proceedings under the Insolvency and Bankruptcy Code.
16. In view of the above, we allow these appeals and set aside the final judgment and order passed by the High Court in Writ Petition No. 483 of 2023 (GM-RES) dated 22.04.2024. We further direct that the Adjudicating Authority will now commence the proceedings from where it was interdicted by the High Court and complete the same as expeditiously as possible, which is also the spirit of the Code.
17. There shall be no order as to costs.”
2.1.3. Accordingly, the DC observes that the Hon’ble Supreme Court had set aside the judgment of the Hon’ble Karnataka High Court on the ground of delay and because the suspended director had already pursued his remedy under the Code by approaching the AA. The Hon’ble Supreme Court did not go into the merits and had directed the AA to resume the proceedings from where it was interdicted by the Hon’ble High Court and to complete them expeditiously.
2.1.4. The DC further notes that there were two applications which were filed before the AA. The first application was IA 10/2022 which contained matters related to some of the contraventions of the instant SCN. Although the matter was dismissed by the AA, there were two separate orders i.e., one by the Hon’ble Technical Member and the other by Hon’ble Judicial Member. The Hon’ble Judicial Member dismissed the matter on all parameters raised in the application and recorded that “In conclusion, based on aforegoing reasons, the Application is dismissed on all parameters raised therein and observing that the [sic] it is yet another spoke in the wheel of adoption of Resolution Plan submitted by SRA which got approval with 100% voting strength of CoC and that this Plan is languishing all these years because of the manoeuvrability of suspended director.” The Hon’ble Technical Member dismissed the application as not maintainable on the grounds of lack of locus standi and the conduct of the suspended directors during the CIRP. Some of the issues forming part of the contraventions in the SCN were raised in the application, though they were not specifically discussed in the analysis portion of the orders.
2.1.5. In the second application bearing IA 161/2020 filed before the AA for approval of the Resolution Plan, two separate orders were passed on 12.01.2026 by Hon’ble Judicial and Hon’ble Technical ember. The Hon’ble Technical Member observed as under: –
“1. From the Documents available on record, it appears that the Audited Financial Statements are not included in the Information Memorandum nor were they made available to the Prospective Resolution applicants.
In this regard, it is necessary to refer to the Regulation 36 of the CIRP Regulations …
Form G itself requires: “Financial statements, including audited financial statements for last two financial years of the corporate debtor…” The use of the word “shall” in Regulation 36 makes it clear that providing audited financial statements in the IM is mandatory, not discretionary.
1.2 In the present case: CIRP commenced on 26.10.2018. The RP should have prepared the IM with audited financials by 19.12.2018 (54 days from CIRP commencement). However, the RP did not appoint a statutory auditor until September 2019, nearly 11 months into the CIRP. The EOI was issued on 23.08.2019, even before the auditor was appointed.
1.3 The Information Memorandum issued in June-August 2019 contained only provisional/unaudited financial statements. Audited financial statements were provided to stakeholders only on 03.02.2020, nearly 15 months into the CIRP and well after the last date for submission of resolution plans, by which time most of the PRAs withdrew.
1.4 The RP seeks to justify this by claiming that
a. The books of account were not available with the RP.
b. The RP acted on a “best efforts” basis.
c. The Corporate Debtor was to be resolved “as is where is.”
1.5 I find these justifications to be wholly improper and contrary to law. Section 19 of the IBC provides:
…
1.5.3. By proceeding with a defective IM, the RP has:
a. Reduced competition in the bidding process.
b. Violated the fundamental principle of transparency in the CIRP process.
c. Deprived creditors of better recovery and guarantors of protection from invocation.
1.6. The RP’s argument that there is no concept of “best efforts” under the Code is correct, but it applies to the RP himself. The Code imposes strict statutory duties on the RP. There is no provision allowing the RP to discharge duties on a “best efforts” basis. The RP must comply with statutory requirements, failing which appropriate action must be taken
1.7. Similarly, the concept of “as is where is” in Clause 1.10.5 of the RFRP does not stop or holdback the RP from complying with Regulation 36. The phrase “as is where is” means that the resolution applicant takes over the corporate debtor with all its assets and liabilities as they exist. It does not mean that the RP can provide incomplete or inaccurate information. Even for “as is where is” sale, the seller (in this case, the RP) must provide full and accurate information to enable buyers to make informed decisions.
Thus, the First Violation that occurred in the CIRP process is the Violation of Regulation 36.”
2.1.6. Furthermore, the Hon’ble Technical Member rejected the resolution plan and ordered for liquidation of the CD by making following observations: –
13. DECISION:
13.1. Based on the above detailed analysis, I arrive at the following conclusions:
a. The Resolution Plan dated 11.02.2020 submitted by METL and approved by the CoC suffers from multiple fundamental and incurable defects, both procedural and substantive.
b. The CIRP process leading to approval of the Resolution Plan was vitiated by material irregularities including violation of Regulations 19, 21(3), 36, 36B(4A), 39(3) and 39(4) of the CIRP Regulations.
c. The Resolution Plan violates Section 24, 30, 30(2)(c), (d), (e) and (f) of the Insolvency and Bankruptcy Code, 2016 and thus, is not satisfactory.
d. The Resolution Plan is conditional in nature and cannot be effectively implemented, contrary to the principles laid down in Ebix Singapore (supra).
e. The Resolution Applicant and Acquisition SPV through which the plan is to be implemented does not satisfy the requirements specified in the Resolution Plan itself and has not provided Section 29A compliance.
f. The proposed merger violates the Companies Act, 2013 and the Competition Act, 2002.
g. The proposed assignment of debt violates the SARFAESI Act and RBI guidelines.
H. The Resolution Plan dated 11.02.2020 is not viable and feasible.
i. The Resolution Professional failed to maximize the value of the Corporate Debtor by excluding the VAT Loan eligibility of Rs.205 crores from the valuation, issuing Information Memorandum without audited financial statements and conducting a CIRP process that resulted in withdrawal of 21 out of 23 prospective applicants.
The defects are so fundamental and incurable that the Resolution Plan cannot be approved and must be rejected under Section 31(2) of the IBC.
The CIRP process is not a game where parties can cut corners, violate regulations, and hope to escape on technicalities. It is a serious process with serious consequences for all stakeholders. It must be conducted with utmost fairness, transparency, and adherence to law.
13.2. I also note that certain actions of the Resolution Professional in this case raise serious questions about his conduct and deserve investigation by the Insolvency and Bankruptcy Board of India (IBBI). In particular:
a. The issuance of Information Memorandum without audited financial statements in violation of Regulation 36.
b. The tabling of an amended Resolution Plan dated 11.02.2020 for approval without evaluation matrix.
c. The submission of Compliance Certificate and Form H for the wrong plan dated: 10.02.2020.
d. The filing of I.A. 161/2020 before receipt of Performance Bank Guarantee.
These actions, viewed cumulatively, suggest either gross incompetence or worse, deliberate misconduct in collusion with the Resolution Applicant. The Registry is directed to forward a copy of this order to the IBBI for such action as it deems appropriate against the Resolution Professional.”
2.1.7. However, the Hon’ble Judicial Member through his separate order approved the resolution plan and observed as under:
“16. In view of the discussions, the law thus settled and for the aforesaid reasons, the incumbent application bearing I.A. No. 161 of 2020 in CP (IB) 51/2018 meets the requirements of Section 30(2) of the Code and Regulations 37, 38, 38 (1A) and 39 of the CIRP Regulations, 2016 and the Resolution Plan is not in contravention of any of the provisions of Section 29A of the Code and is Resolution Plan, the Resolution Plan dated 11.02.2020 bearing I.A. No. 161 of 2020 , submitted by MeTL, is hereby approved.”
2.1.8. Since there was a difference of opinion between the Hon’ble Judicial and Hon’ble Technical Member, the matter was referred to the President, NCLT for referring the matter to a third member. The relevant excerpts are as follows:
“1. Having heard the submissions advanced on behalf of the parties in various Interlocutory Applications on multiple dates and perusing material available before the Bench, the Members of this Bench had a difference of opinion in passing the Order. While the Member (Judicial), upon considering the facts and circumstances of the case, has concluded to Approve the Resolution Plan submitted by SRA, the Member (Technical) has deemed it as a fit case for Rejection of the Resolution Plan and accordingly has appointed a Liquidator from the Panel of Resolution Professionals submitted by the IBBI.
2. Consequently, the Members have passed two separate and independent Orders authored by them.
3. In the circumstances, a request letter with necessary annexures be sent to the Hon’ble President, NCLT, New Delhi for necessary order/directions regarding constituting a Bench of the Third Member as envisaged in Section 419(5) of the Companies Act, 2013 read with Rule 60(3) of the NCLT Rules, 2016 to consider the following legal point. “Whether in the facts and circumstances of the case, the Resolution Plan submitted by the SRA is liable to be approved or Rejected under Section 31 of the IBC, 2016?
4. The Registry to take immediate necessary steps in this behalf. Parties will be accordingly notified in due course.”
2.1.9. In view of the above, the matter was referred to a Third Member i.e., Hon’ble Justice Jyotsna Sharma, Member (Judicial), sitting as Special Bench, who after hearing all the parties, passed the order on 30.09.2026. The Hon’ble Third Member has rendered her opinion on each of the issues where there was a difference of opinion between the members, except on the issue of conditional nature of the resolution plan. The relevant extract of the order is as under: –
“13. K. Concluding Para: Cumulative effect of procedural violations, if any, on approval of Resolution Plan
i. All the points of difference between the members of the regular bench have been dealt with in the above paras in seriatim. The points of difference can be divided into two categories: some are procedural and other points are not.
ii. As far as the procedural violations are concerned, they may be in the nature of irregularities, deficiencies or misapplication. They may further fall into two broad categories First are those which may cause prejudice to the interest of the stakeholder. The second category may consist of the procedural violation of such nature which may not cause any real prejudice to any of the stakeholders. Considering from this point of view, each and every case may have its own peculiar facts and circumstances for reaching to the right conclusion. In general whenever a procedure is prescribed it should be followed as it is. The word of caution is that minor violations which are trivial in nature or not substantive, may not call for any interference. The old adage is that procedure is handmaids to justice. Such procedural violations or irregularities which do not prejudicially affect the right of any party or do not have any direct or indirect bearing on the objective sought to be achieved and where principles of fairness have not been ignored may not be treated as vitiating the process.
…
(vi) All the points of difference have been dealt with in the preceding paras. Certain procedural violations have been committed, however, none of them has been found to be material enough so as to vitiate the whole process and therefore reject the resolution plan.
The point discussed under the head “F. Conditional nature of Resolution Plan” requires special consideration in view of peculiarity of facts and circumstances.
ORDER
i. Accordingly, the opinion(s) of the Special Bench in the capacity of a third member is pronounced.
ii. The matter be placed before the Original Division Bench (NCLT Bengaluru Bench) for passing appropriate orders in terms of the majority opinion under Section 419(5) of the Companies Act, 2013.
iii. This order alongwith the order passed under section 419(5) of the Companies Act, 2013 dated 29.01.2026, be placed before the Hon’ble President, NCLT, for appropriate action.”
2.1.10. The DC observes that the Third Member, Hon’ble Justice Jyotsna Sharma, sitting as Special Bench, has given her opinion on all the points of difference except the conditional nature of the Resolution Plan. She has held that this point requires special consideration and directed that the matter be placed before the original Division Bench for orders in terms of the majority opinion. As on the date of this order, the AA has not passed a final order approving or rejecting the plan.
2.1.11. The DC notes that the jurisdiction of the AA and that of the DC are totally different, although there might be similar set of facts to be considered by both the authorities. The AA examines whether the CIRP was running as per the provisions of the Code and Regulations and whether the Resolution Plan should be approved under Section 31 of the Code. However, the present proceedings under Section 220 of the Code has a different scope of consideration to examine as to whether the Insolvency Professional has complied with the Code, the Regulations and the Code of Conduct. These two separate proceedings operate in separate fields. Neither the pendency of proceedings before the AA, nor the fact that the complainant raised similar grievances before other fora, prevents the Board from examining the conduct of the Insolvency Professional. Likewise, the dismissal of IA 10/2022, whether on merits or on the ground of locus and conduct, does not take away the statutory power of the Board to monitor the performance of the Insolvency Professional. The Board’s power is irrespective of either the identity or the conduct of the complainant.
2.1.12. The DC observes that insofar as Contravention V of the SCN with respect to the failure to consider the Resolution Plan in accordance with applicable provisions of the Code is concerned, it rests on several grounds i.e., the details of the resolution applicant, disclosures under Section 29A, the source of funds, the conditional nature of the plan, and the alleged undue haste in its approval. Of these, only the question of whether the Resolution Plan dated 11.02.2020 was conditional in nature remains unsettled and has not yet been finally decided by the AA. Accordingly, the DC has refrained from recording any finding at this stage and the Board will be at liberty to reexamine the Contravention V appropriately, based on the order of the AA.
2.1.13. The DC further notes that even though the Hon’ble Third Member has observed that none of the procedural violations has been found to be material enough so as to vitiate the whole process and reject the resolution plan. Such observation is to be seen in the context of the adjudicatory proceedings before the AA. That observation was made in the context of the CIRP and the approval of the Resolution Plan and it does not dispense with or dilute the independent statutory obligation of an Insolvency Professional to comply with the requirements prescribed under Code and Regulations made thereunder. This supervisory and disciplinary function lies squarely within the mandate of the Board. The DC accordingly proceeds to examine the contraventions on their own merits.
2.2. Validity of SCN in absence of formal investigation report under Section 219 of the Code and Regulation 10A of Inspection and Investigation Regulations.
2.2.1. Shri Alok Kailash Saksena submitted that the SCN purportedly issued under Section 219 of the Code read with regulations 11 and 12 of Insolvency and Bankruptcy Board of India (Inspection and Investigation) Regulations, 2017 (Inspection and Investigation Regulations) is not tenable and unauthorised. He submitted that in terms of Regulation 11 of Inspection and Investigation Regulations, before issuance of any show-cause notice, the IBBI is required to form a prima facie opinion that sufficient cause exist to take actions against the Insolvency Professional. However, in the instant case, the prima facie opinion does not exist because there was no investigation report.
2.2.2. Shri Alok Kailash Saksena further submitted that Regulation 10A is inconsistent with the provisions of the Code, particularly regarding the handling of complaints against insolvency professionals. The Code does not grant any suo motu power to IBBI to refer a matter to the DC without first conducting an inspection or investigation. Therefore, Regulation 10A is ultra vires the Code, and the present notice is liable to be quashed.
Examination by the DC.
2.2.3. The DC notes that Shri Alok Kailash Saksena has raised a preliminary objection with respect to the provisions of Sections 218 and 219 of the Code not being followed prior to issuance of the SCN. However, it is pertinent to note that the present SCN has been issued in terms of the Regulation 11(2) read with Regulation 10A of the Inspection and Investigation Regulations, 2017 which empowers the Board to issue SCN if after the consideration of the investigation report on the basis of material available on record, the Board is of the prima facie opinion that sufficient cause exists. The said regulation is as hereunder:
“11. Consideration of Report.
1. The Board shall consider the inspection report received under regulation 6 or investigation report received under regulation 10, as the case may be, expeditiously.
2. If the Board, after consideration of the report under sub regulation (1) or on the basis of material otherwise available on record, is of the prima facie opinion that sufficient cause exists to take actions under section 220 or sub-section (2) of section 236, it shall issue a show-cause notice in accordance with regulation 12 to the service provider or an associated person and in any other case, close the inspection or investigation, as the case may be”
2.2.4. Further, the DC notes that in terms of Regulation 10A of the Inspection and Investigation Regulations, the processing of a complaint or grievance or material available on record, is deemed to be investigation and the processing papers in this regard are deemed to be investigation report. The said Regulations is as hereunder:
10A. Investigation during disposal of complaint or grievance.
Notwithstanding anything contained in Chapter III, the processing of a complaint or grievance or material available on record under the Insolvency and Bankruptcy Board of India (Grievance and Complaint Handling Procedure) Regulations, 2017, shall mean investigation under this regulation and in such case the processing papers shall mean the investigation report under regulation 10:
Provided that nothing in this regulation shall restrict the Board to appoint an inspecting authority under Chapter-II or an investigating authority under Chapter-III.
2.2.5. Therefore, the DC is of the considered view that the present SCN has been issued in terms of the statutory framework and is therefore proper and can be adjudicated by this DC in terms of the provisions of the Code.
2.3. Non-supply of the complaint and its annexures alleged violation of natural justice
2.3.1. Shri Alok Kailash Saksena has submitted that he was only served with the Form A of the complaint filed by the complainant with the Board. However, the five volumes attached to in complaint and referred to in complaint was never supplied to him. Therefore, he never had the access to entire complaint and the documents referred to by the complainant.
Examination by the DC.
2.3.2. The DC notes that Shri Alok Kailash Saksena was provided with the gist of the complaint, which runs to 42 pages and sets out each allegation in detail. Further, the relevant documents which was relied upon by the Board to form a prima facie opinion for issuance of SCN was shared with Shri Alok Kailash Saksena alongwith the SCN.
2.3.3. Accordingly, the DC is of the view that the instant SCN has been validly issued in terms of the applicable statutory provisions and Shri Alok Kailash Saksena has been provided a full and fair opportunity to explain his conduct on the allegations mentioned in the SCN. Nonetheless, apart from written submissions, Shri Alok Kailash Saksena has also been provided with repeated opportunities of personal hearing before this DC to defend his actions and also allowed Shri Alok Kailash Saksena to submit multiple additional submissions.
3.Alleged contraventions in the SCN, submissions of Shri Alok Kailash Saksena and findings of the DC
The contravention alleged in the SCN, submissions by Shri Alok Kailash Saksena and findings of the DC are summarized as follows:
3.1 Contravention – I: Failure to Include the Audited Financial Statements of the CD in the Information Memorandum (IM).
3.1.1 It was observed by the Board that the CIRP of the CD was initiated vide order of AA dated 26.10.2018 and as per the procedure prescribed under the Code and rules and regulations made thereunder, Shri Alok Kailash Saksena was required to prepare the IM according to Regulation 36 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulations) and provide it to the members of the CoC.
3.1.2 It was further observed by the Board that Regulation 36(2)(c) of CIRP Regulations mandates the RP to include audited financial statements of the CD for the last two financial years and provisional financial statements for the current financial year made up to a date not earlier than fourteen days from the date of the application. It was observed that only the provisional balance sheet as on 31.03.2017, and 2018 have been included in the IM and Shri Alok Kailash Saksena failed to provide the audited financial statements for the year ending 31.03.2017 and 31.03.2018 as provided under Regulation 36(2)(c) of the CIRP Regulations.
3.1.3 Thus, the Board held a prima facie view that Shri Alok Kailash Saksena had contravened Section 208(2)(a) and (e) of the Code, Regulation 36(2)(c) of CIRP Regulations, Regulation 7(2)(a) and 7(2)(h) of the IP Regulations read with Clause 14 of the Code of Conduct for Insolvency Professionals provided under First Schedule to IP Regulations (Code of Conduct).
Submissions by Shri Alok Kailash Saksena.
3.1.4 Shri Alok Kailash Saksena submitted that complainant was engaged in forum shopping and the issues raised in the complaint were exactly the same as those raised by the complainant in application bearing I.A No. 10 of 2022, which was pending adjudication before the AA and in Writ Petition No. 483 of 2023 filed before Hon’ble High Court of Karnataka.
3.1.5 Shri Alok Kailash Saksena further submitted that the pattern of raising the same issues before multiple forums suggested a deliberate attempt to create undue pressure on him. He also submitted that the issues raised in the present complaint were already before the AA in I.A 10 of 2022, which was then awaiting adjudication, and the matter was therefore sub-judice. He further pointed out that IBBI was made a party in WP 483 of 2023 before Hon’ble High Court of Karnataka, I.A. 10 of 2022 before AA which were pending for adjudication and in SLP no. 11599/2024 filed before the Hon’ble Supreme Court which had been filed against the order of Hon’ble High Court in WP 483 of 2023. The complainant has dragged IBBI in legal proceedings with the oblique objective.
3.1.6 Shri Alok Kailash Saksena submitted that the issue related to ‘audited financial statement’ of the CD was raised in multiple forums, including the High Court, NCLAT, and the Supreme Court by one of the unsuccessful Prospective Resolution Applicant (PRA) and by the complainant in their individual capacity. The Hon’ble NCLAT, Chennai Bench had already dealt with this specific issue in an appeal bearing Company Appeal (AT)(Ins.) No. 173/2021 filed by Shri Alok Kailash Saksena, wherein the Hon’ble NCLAT observed that there was no violation of the CIRP. The relevant extract of the NCLAT order dated 19.09.2022 is reproduced hereunder:
39. The Respondents failed to establish that the RP violated the ‘CIRP ’process. It is only the case of the Respondents such averments allegations have been made and the ‘Adjudicating Authority’without going into the reality simply ratified the submissions of the Respondents, which this Tribunal highly deprecate the said stand.
3.1.7 Subsequently, Hon’ble Supreme Court vide its order dated 25.11.2022 upheld the above-said order of the Hon’ble NCLAT. Further, the complainant also raised the similar allegations before the Hon’ble Karnataka High Court in WP 483/2023. There were no adverse observations of the Hon’ble High Court on the issue of non-updation of books of accounts and non-furnishing of audited accounts in the Information Memorandum and violation of Regulation 36 of the CIRP Regulations.
3.1.8 Shri Alok Kailash Saksena submitted that in the present case, due to mismanagement of the CD (where the complainant himself was the managing director of CD) prior to initiation of ‘CIRP’, its accounts had remained unaudited from FY 2015-16 onwards and the auditor appointed by the erstwhile management had also resigned on the date of initiation of the ‘CIRP’. Therefore, in absence of the audited financial statements, he had included the provisional financial statements of the CD for the FY 2016-17 and FY 201718 in the Information Memorandum. Further, Shri Alok Kailash Saksena took appropriate steps to have the books of accounts updated and to appoint a statutory auditor to have the financial statements audited while keeping the CoC informed of the steps taken.
3.1.9 Shri Alok Kailash Saksena further submitted that fire break out at Mumbai office of the CD just approximately 2 months before the initiation of CIRP had damaged the server where the books of accounts were stored, and considerable effort was made to recover the data and prepare provisional accounts. This was mentioned in the IM as follows:
“Page 8 of IM: The CD has reported that there was a fire in its office and the server on which books of accounts were stored was damaged in the fire. The process of recovery from the damaged hard disk was entrusted to a specialized agency. The agency took considerable time and recently delivered the complete tally for the year 1 April 2015 to the date of the fire. Such recovered books of accounts are now available for due diligence. The provisional accounts are based on such recovered tally. The provisional and unaudited annual financial statement as on 26 October 2018 prepared from the Tally backup received is given in Annexure A (i).”
3.1.10 Shri Alok Kailash Saksena submitted that he took all necessary efforts to recover the accounts from the damaged hard disk, prepare provisional accounts, and make them available for due diligence. Therefore, the allegations against him are unfounded, and the complainant’s lack of action in preparing these accounts should also be noted by the Board.
3.1.11 Shri Alok Kailash Saksena further submitted that the issue relating to Regulation 36(2)(c) of the CIRP Regulations was first raised before the AA by Svamitva Landmarks (Consortium), one of the PRAs, in I.A 227/2020, and the complainant had also filed an impleadment application bearing I.A. 228 of 2020 in support of that application. Though the AA initially observed that the IM should have contained the audited financial statements, the Hon’ble NCLAT, on appeal, overturned this observation, holding that the resolution process was conducted on an “as is where is basis” with the data and resources available, as provided in the RFRP, and that he had complied with the rules. According to Shri Alok Kailash Saksena, since the IM clearly disclosed the reasons for the non-availability of the audited accounts and the issue has already been examined and settled by the judicial forums, it should not be re-opened by the Board.
Analysis and findings of the DC.
3.1.12 The DC notes that the requirement of Regulation 36 (2)(c) of CIRP Regulation is as below: –
“36. Information memorandum
…
(2) The information memorandum shall highlight the key selling propositions and contain all relevant information which serves as a comprehensive document conveying significant information about the corporate debtor including its operations, financial statements, to the prospective resolution applicant and shall contain the following details of the corporate debtor-
..
(c) audited financial statements of the corporate debtor for the last two financial years and provisional financial statements for the current financial year made up to a date not earlier than fourteen days from the date of the application;”
3.1.13 The DC notes that Regulation 36(2)(c) of the CIRP Regulations requires the IM to contain the audited financial statements of the CD for the last two financial years. In the instant matter the CIRP of the CD had commenced on 26.10.2018. The IM therefore had to contain the audited financial statements for FY 2016-17 and FY 2017-18. However, the IM contained audited financial statements only up to FY 2014-15. For FY 2015-16 to FY 2017-18 it contained only provisional, unaudited statements. Shri Alok Kailash Saksena did not dispute this fact. The Third Member of the AA also recorded this fact in her order dated 30.09.2026 and described it as “an irregularity as far as stipulated procedure is concerned”.
3.1.14 The DC notes that this matter was also one of the issues where there was a difference of opinion and where findings were given by the Third Member vide order dated 30.09.2026. It was observed that this issue was earlier litigated before the NCLAT in Alok Kailash Saksena, the RP v. Svamitva Landmarks and Ors, Company Appeal (AT)(CH)(Ins.) No. 173 of 2021, which was decided on 19.09.2022, where the NCLAT allowed the RP’s appeal and had set aside the AA’s order directing RP to place Svamitva’s plan (one of the PRAs) before the CoC, holding that the AA had exceeded its jurisdiction in interfering with the CoC’s commercial wisdom.
3.1.15 The DC further notes that the Third Member of the AA, in its order dated 30.09.2026 had recorded that there was no dispute that the IM contained audited financial statements only up to FY 2014-15, that all prospective resolution applicants had access to the same material, and that the non-availability of audited statements for the subsequent two years was disclosed both at the 1st CoC meeting and in the IM itself. On this basis, it held that
“My opinion is that non-availability of audited financial statements for the last two financial years was an irregularity as far as stipulated procedure is concerned. However, I cannot ignore that the deficiency in complying with procedural requirements has been a point in issue before the Hon’ble NCLAT and their observations have a binding effect. My opinion is that every procedural deficiency, nonadherence or even violations, if trivial in nature, may not be fatal in nature. As pointed out earlier, every prospective resolution applicant had the same material before them hence, it cannot be said that unavailability of the audited financial statements of preceding two financial years caused prejudice to any party or was unfair, therefore the procedure is vitiated. However, the issue of procedural irregularities and violations, their legal impact on the ultimate decision given or to be given by the adjudicating authority shall be again dealt with in the concluding para of this order.”
In concluding paragraph, it was observed that:
“All the points of difference have been dealt with in the preceding paras. Certain procedural violations have been committed, however, none of them has been found to be material enough so as to vitiate the whole process and therefore reject the resolution plan.”
3.1.16 Shri Alok Kailash Saksena sought to explain this lapse by submitting that the accounts of the CD had remained unaudited since FY 2015-16 under the erstwhile management and the statutory auditor appointed by them had resigned on the date of commencement of the CIRP, that a fire in the office of the CD about two months before the commencement of the CIRP had damaged the server on which the books of account were stored, and that the non-availability of the audited financial statements was disclosed to the members of the CoC in the 1st CoC meeting and was also mentioned in the IM. He further placed reliance on the order of the Hon’ble NCLAT in Company Appeal (AT)(CH)(Ins.) No. 173 of 2021, which did not find any material irregularity in the CIRP, and on the order of the Third Member, which held that no prejudice was caused to any party on this account.
3.1.17 However, the DC notes that Regulation 36(2)(c) of the CIRP Regulations uses the word “shall”, so the requirement of providing the audited financial statements of the corporate debtor for the last two financial years was mandatory. The defaults of the earlier management can explain why audited accounts were not available when the CIRP began, however it does not explain why Shri Alok Kailash Saksena did not get the accounts audited before he issued the IM. As examined in Contravention II in later paragraphs, the DC found that Shri Alok Kailash Saksena did not start the process of appointing an auditor in time.
3.1.18 The DC further notes that the minutes of the 3rd CoC meeting held on 26.02.2019 record that the CD had not provided access to its books of account (Tally data) and that the members of the CoC had directed Shri Alok Kailash Saksena to give one last opportunity to the CD, failing which he could seek legal remedy. In such a situation, Section 19(2) of the Code specifically enables the IRP/RP to make an application to the AA for necessary directions where the personnel of the CD do not extend the required cooperation. However, there is nothing on record to show that Shri Alok Kailash Saksena had approached the AA under Section 19(2) of the Code for getting access to the books of account or for getting the accounts updated and audited, and he has also not made any submission to this effect either in his reply to the SCN or during the personal hearing.
3.1.19 As regards the submission of Shri Alok Kailash Saksena that the non-availability of the audited financial statements was disclosed in the 1st CoC meeting and in the IM, the DC is of the view that such disclosure cannot be treated as a substitute for compliance with Regulation 36(2)(c) of the CIRP Regulations. The very purpose of the IM is to enable a prospective resolution applicant to form a fair and informed assessment of the CD, and a disclosure that certain information is not available only informs the prospective resolution applicant to know about the gap only but does not help in taking informed decision. The audited financial statements carry the assurance of an independent auditor, and absence of any such information lead to a situation of information asymmetry in which the prospective resolution applicants are left to rely upon figures which had not been verified through an audit process as required under the Code. This may have affected both the level of participation in the process and the value offered in the resolution plans which have a direct ramification on the value maximization objective of Code.
3.1.20 The DC also notes that the reliance placed by Shri Alok Kailash Saksena on the order of the Hon’ble NCLAT and on the order of the Hon’ble Third Member does not come to his rescue. The Hon’ble NCLAT was examining whether the AA was right in directing that the resolution plan of Svamitva Landmarks be placed before the CoC, and the Hon’ble Third Member was examining whether the procedural irregularities in the CIRP were material enough to vitiate the process or to reject the resolution plan. Neither of these fora has held that the requirement of Regulation 36(2)(c) of the CIRP Regulations was complied with in the present case. On the contrary, the Hon’ble Third Member has categorically held that the non-availability of the audited financial statements for the last two financial years was an irregularity as far as the stipulated procedure is concerned. The question before the DC is not whether the CIRP stands vitiated, but whether Shri Alok Kailash Saksena has discharged his duties as the RP in the manner required under the Code and the Regulations.
3.1.21 In view of the above, the DC is of the view that Shri Alok Kailash Saksena failed to include the audited financial statements of the CD for the last two financial years in the IM, as mandated under Regulation 36(2)(c) of the CIRP Regulations, and has thereby contravened Sections 208(2)(a) and 208(2)(e) of the Code, Regulation 36(2)(c) of the CIRP Regulations and Regulations 7(2)(a) and 7(2)(h) of the IP Regulations read with Clause 14 of the Code of Conduct.
3.2 Contravention – II: Inordinate delay in Appointment of Statutory Auditors.
3.2.1 It was observed by the Board that the financial statements of the CD were not audited and books of accounts of the CD were incomplete, after Shri Alok Kailash Saksena took over as the RP of the CD. In pursuance of the same, Mr. Alok Kailash Saksena discussed the same with the CoC in the 1st and 3rd CoC meeting held on 26.12.2018 and 26.02.2019 respectively. However, despite such discussion regarding the non-availability of the audited financial statements of the CD being held with the CoC as early as the 1st and the 3rd CoC meeting, the discussion on appointing an auditor for conducting an audit of the provisional financial statements was raised by Shri Alok Kailash Saksena only during the 9th CoC held on 20.08.2019.
3.2.2 It was noted by the Board that by this time, the IM was already submitted to the CoC on 04.05.2019. The statutory auditor was eventually appointed after conclusion of 10th CoC meeting held on 06.09.2019 and as noted from minutes of 19th CoC meeting, the audited report was submitted on 03.02.2020. Due to such delay in the appointment of statutory auditors, the requirement of providing audited financial statements of the CD in the IM as per Regulation 36(2)(c) of the CIRP Regulations was not fulfilled.
3.2.3 Thus, the Board held a prima facie view that Shri Alok Kailash Saksena had contravened Section 208(2)(a), 208(2)(e) of the Code, Regulations 7(2)(a) and 7(2)(h) of IP regulations read with Clause 14 of the Code of Conduct for Insolvency Professionals.
Submissions by Shri Alok Kailash Saksena.
3.2.4 Shri Alok Kailash Saksena submitted that the following timeline provides a comprehensive overview of the circumstances surrounding the issue:
| Dates | Remarks |
|---|---|
| 26.10.2018 | CIRP initiation date |
| 26.11.2018 | Copy of order of the AA initiating the CIRP was received |
| 28.11.2018 | Public Announcement issued |
| 29.11.2018 | The Hon’ble Supreme Court passed “Status Quo” order. As such, Shri Alok Kailash Saksena was duty bound to maintain the “Status Quo” |
| 02.04.2019 | Hon’ble Supreme Court lifted the “Status Quo” order |
| 20.06.2019 | Hon’ble High Court of Karnataka “Stayed” the CIRP |
| 13.08.2019 | Hon’ble HC of Karnataka lifted the stay. No COC was conducted during the “Stay” Period |
| 20.08.2019 | Ninth CoC was conducted. Shri Alok Kailash Saksena presented the quotes of firms for audit to the CoC, and the CoC directed him to negotiate further with L1. |
| 06.09.2019 | Tenth CoC was conducted, wherein the agenda to appoint new auditor was put to vote.
COC had voted in favour and appointed the auditor. Only after the CoC’s approval, Shri Alok Kailash Saksena sent the appointment letter to the new auditor. |
3.2.5 Shri Alok Kailash Saksena submitted that, as is evident from the above timeline, he had discussed the issue of the unaudited financial statements with the CoC in its 1st and 3rd meetings, but could not take any action on account of the status quo order passed by the Hon’ble Supreme Court, during which neither he nor the CoC had the power to appoint a new auditor. After the status quo order was lifted, his appointment was confirmed by the CoC on 20.04.2019, and since the original period of 180 days was ending on 23.04.2019, he approached the AA for extension of the CIRP period.
3.2.6 Thereafter, Shri Alok Kailash Saksena proceeded with the issue of the IM and the other steps mandated under the Code and also sought quotations for the audit on 13.05.2019. However, the audit firms which were approached sought more information about the readiness of the books for audit, since the audit had to cover the period from 2015 onwards and the CD had a history of non-compliance, and the stay granted by the Hon’ble High Court of Karnataka on 20.06.2019 added to their doubts. After the stay was vacated, he placed the quotations before the CoC in its 9th meeting held on 20.08.2019.
3.2.7 Shri Alok Kailash Saksena further submitted that in the 9th meeting, the CoC directed him to negotiate further with the auditors, and after receipt of a revised proposal, the agenda for appointment of the statutory auditor was placed before the CoC in its 10th meeting held on 06.09.2019. The e-voting on this agenda concluded on 12.09.2019, wherein the CoC approved the appointment of M/s Verma Mehta and Associates as the statutory auditor, and the appointment letter was issued on 13.09.2019. He, therefore, submitted that the statutory auditor could not be appointed at an early stage for reasons beyond his control, and there was no delay on his part in appointing the auditor after the approval of the CoC.
3.2.8 Shri Alok Kailash Saksena has also relied upon the affidavit of CA Hitesh Bhatter, who assisted him in the CIRP along with CA Suresh Shinde. As per the affidavit, after the data was recovered from the damaged hard disk in the last week of April 2019, his team organised the files systematically, which was a time-consuming task considering the turnover of around Rs.950 crore over four years. The team reconciled the purchase bills and sales invoices with the VAT and GST returns, matched the banking records with the books, cross-checked the books with the PF, ESIC and TDS returns and PT challans, verified the rent payments with the rent agreements, reviewed the books for completeness including depreciation and deferred tax, and arranged all the documents sequentially for the review of the auditor.
Analysis and findings of the DC.
3.2.9 The DC notes that following table of events is necessary to understand the factual background in detail
| Dates | Remarks |
|---|---|
| 26.10.2018 | CIRP initiation date |
| 30.11.2018 | The Hon’ble Supreme Court in Associate Holdings Pvt. Ltd. v. Reserve Bank of India & Ors. passed “Status Quo” order. Following was recorded “Status quo, as of today, shall be maintained in the meantime.” |
| 26.12.2018 | First CoC meeting was held where it was recorded that “The chairman further briefed the members that the books of accounts of the corporate debtor were not up to date and financials for financial year 2015-16, 2016-17 and 2017-18 are not ready and audited. He informed the members that he had already instructed employees of corporate debtor to update the books of accounts and get them audited.” |
| 26.02.2019 | Third CoC meeting was held where it was again recorded that “Books of accounts and financials of corporate debtor- The Chairman |
| informed the members that he had received provisional financials for FY 15-16, FY 16-17 and FY 17-18 from corporate debtor, however corporate debtor had not provided access to books of accounts (Tally data). Members directed IRP to provide one last opportunity to corporate debtor to provide the books of accounts, else he may seek legal remedy for the same.” | |
| 02.04.2019 | Hon’ble Supreme Court lifted the “Status Quo” order and disposed of the matter. |
| 20.06.2019 | Hon’ble High Court of Karnataka in Noorudin Khan v. Oriental Bank of Commerce “Stayed” the CIRP. It was recorded that “In view of the aforesaid submission and in the facts of the case, it is directed that no further action shall be taken by the said committee of creditors as well as insolvency resolution, till next date of hearing.” |
| 08.08.2019 | Hon’ble HC of Karnataka lifted the stay and disposed of the matter. |
| 06.09.2019 | Tenth CoC was conducted, wherein the agenda to appoint auditor was put to vote. The CoC had voted in favour and appointed the auditor. |
| 03.02.2020 | Report was submitted by the Auditor |
3.2.10 From the above sequence of events, the DC notes that Shri Alok Kailash Saksena was aware right from the beginning of the CIRP that the books of account of the CD were not upto date and that the financial statements for FY 2015-16, FY 2016-17 and FY 2017-18 had not been audited. This fact was placed before the CoC in its 1st meeting held on 26.12.2018, wherein he informed the members that he had instructed the employees of the CD to update the books of account and get them audited. The issue came up again in the 3rd CoC meeting held on 26.02.2019, when he informed the members that the CD had not provided access to its books of account, and the CoC directed him to give one last opportunity to the CD, failing which he could seek legal remedy.
3.2.11 The DC further notes that Shri Alok Kailash Saksena submitted that neither he nor the CoC had the power to appoint a new auditor while the status quo order of the Hon’ble Supreme Court was in force. The DC notes that the 1st and the 3rd CoC meetings were held while the status quo order was in force, and the issue of the unaudited accounts was discussed in both these meetings. This status quo order did not prevent Shri Alok Kailash Saksena from convening the meetings of the CoC, and it equally did not prevent him from taking preparatory steps such as identifying suitable audit firms, inviting quotations or approaching the AA for access to the books of account.
3.2.12 Further, even if the DC excludes the periods during which the status quo order of the Hon’ble Supreme Court (30.11.2018 to 02.04.2019) and the stay of the Hon’ble High Court of Karnataka (20.06.2019 to 08.08.2019) were in force, Shri Alok Kailash Saksena still had about eleven weeks (79 days) between 02.04.2019 and 20.06.2019 to initiate the process of appointment of the statutory auditor when infact after lifting of stay order on 08.08.2019 this process was completed in 29 days by 06.09.2019 during the 10th CoC meeting. By this time, IM had already been submitted to the CoC on 04.05.2019 and Form G inviting expressions of interest had been issued on 23.08.2019. The audit report was ultimately received only on 03.02.2020, after the last date for submission of resolution plans, and as a result the audited financial statements could never be made available to the prospective resolution applicants.
3.2.13 The DC further notes that Shri Alok Kailash Saksena submitted, relying on the affidavit of CA Hitesh Bhatter, that the data from the damaged hard disk was recovered only in the last week of April 2019, and thereafter considerable time was spent in organising the records, reconciling them with the tax returns and other statutory records and preparing them for audit. The DC notes that this submission, in fact, shows that the books of account of the CD were incomplete and required substantial work, which made it all the more necessary for him to appoint an auditor at the earliest so that the audit could proceed alongside the reconstruction of the books. The affidavit explains the work done on the books of account, but it does not explain why no auditor was appointed earlier.
3.2.14 In view of the above, the DC is of the view that Shri Alok Kailash Saksena did not act with reasonable care and diligence in initiating and completing the process of appointment of the statutory auditor, which resulted in the audited financial statements of the CD not being available for inclusion in the IM. Accordingly, the DC holds that Shri Alok Kailash Saksena contravened Sections 208(2)(a) and 208(2)(e) of the Code and Regulations 7(2)(a) and 7(2)(h) of the IP Regulations read with Clause 14 of the Code of Conduct.
3.3 Contravention – III: Failure to preserve the value of inventory of the CD.
3.3.1 It was noted by the Board that the GST department had attached stocks of CD of approximately Rs.30 crore from the period 04.09.2018 to 13.02.2019. The said stock of CD was released from attachment vide order of Hon’ble Karnataka High Court dated 13.02.2019. Subsequently, in the 9th CoC meeting held on 20.08.2019, Shri Alok Kailash Saksena discussed the eroding value of the inventory of the CD which had been previously seized by the GST department. The members of the CoC had directed Shri Alok Kailash Saksena to explore the possibility of an insurance claim for such scrap inventory. However, it was observed from the minutes of the 10th to 22nd CoC meeting that Shri Alok Kailash Saksena had given no updates regarding the said insurance claim to the members of the CoC.
3.3.2 Section 25(1) of the Code casts a duty on the RP to preserve and protect the assets of the CD. However, it was observed by the Board that Shri Alok Kailash Saksena had been negligent in the preservation of value of inventory of the CD.
3.3.3 Thus, the Board held a prima facie view that Shri Alok Kailash Saksena had contravened Sections 25(1), 208(2)(a) and 208(2)(e) of the Code, Regulations 7(2)(a) and 7(2)(h) of the IP regulations read with Clause 14 of the Code of Conduct for Insolvency Professionals.
Submission by Shri Alok Kailash Saksena.
3.3.4 Shri Alok Kailash Saksena submitted that the GST Department had attached the stock of the CD on 04.09.2018, i.e., prior to the commencement of the CIRP on 26.10.2018, on account of non-filing of GST returns by the erstwhile management. On the commencement of the CIRP, he was obliged to run the CD as a going concern, and recognising the impact of the attachment on the assets of the CD, he promptly pursued Writ Petition (C) No. 40360-364 of 2018 before the Hon’ble High Court of Karnataka for release of the stock. He also submitted that at that point of time, there was no legal requirement for him to obtain a new GST registration within 30 days of his appointment. The Hon’ble High Court allowed the petition vide order dated 13.02.2019, and the GST Department lifted the attachment in April 2019.
3.3.5 He further submitted that in the 9th CoC meeting, it was noted that the inventory which had been seized by the GST Department had lost value due to the prolonged attachment, bending and degradation, leading to losses in May and June 2019, and the CoC directed him to explore the possibility of an insurance claim. Pursuant to this direction, he enquired whether an insurance claim could be lodged, which was clarified through an internal email. According to him, after discussions with the insurance agent and a review of the insurance policy, it was found that the loss had arisen due to the negligence of the CD and its directors, including the complainant, who was the managing director, and was therefore not covered under the policy, which did not cover losses arising from the negligence of the directors or loss of profit.
3.3.6 Shri Alok Kailash Saksena also submitted that no attachment was made by the GST Department during the CIRP, and the attachment in question had taken place prior to the CIRP when the complainant was a director of the CD. Throughout the CIRP, he ensured timely payment of statutory dues such as GST, PF and ESIC, as well as salaries of the employees and payments to the vendors, and thereby preserved the value of the inventory and maintained the CD as a going concern. He further submitted that the same allegation had been raised word by word by the complainant in I.A No. 10/2022 before the AA, which has been dismissed by the AA vide order dated 12.01.2026 without observing any irregularity.
Analysis and Finding of the DC
3.3.7 The DC notes that the GST Department had attached the stock of the CD on 04.09.2018, i.e., before the commencement of the CIRP, on account of non-filing of GST returns by the erstwhile management of the CD. Though the attachment continued for some months after the commencement of the CIRP, Shri Alok Kailash Saksena pursued Writ Petition Nos. 40360-364 of 2018 before the Hon’ble High Court of Karnataka, which passed an order on 13.02.2019, and the attachment was lifted by the GST Department in April 2019. The loss in the value of the inventory reported in May and June 2019 was mainly the result of the prolonged attachment, and there is nothing on record to show that any particular act or omission on the part of Shri Alok Kailash Saksena after the release of the stock caused or added to the loss. The DC, therefore, does not find that Shri Alok Kailash Saksena was negligent in preserving the value of the inventory of the CD within the meaning of Section 25(1) of the Code. As regards the second part of the charge, the DC notes that the issue of erosion in the value of the inventory was discussed in the 9th CoC meeting held on 20.08.2019, and the following was recorded in the minutes of the said meeting:-
“The chairman informed the members that as discussed in earlier COC meetings the inventory of Corporate Debtor which had been seized by GST Department for several month had lost substantial value due to bending and losing its original structure and quality leading to abnormal losses in the month of May and June 2019. He further informed the members that such inventory is still lying with the corporate debtor and would lead to further losses in subsequent months. The matter was discussed at length and members directed RP to explore the possibility of insurance claim for such scrap inventory.”
3.3.8 Pursuant to the above direction of the CoC, Shri Alok Kailash Saksena submitted in his reply to the SCN that he had enquired whether an insurance claim could be lodged for the damaged inventory, and that after discussions with Shri S. Praveen Kumar. Dy. Manager – Operations & MIS and a review of the insurance policy, it was found that the loss was due to the negligence of the CD and its directors and was therefore not covered under the insurance policy. In support of his submission, he has placed on record an email trail, which is reproduced as under: –
| Date of email | Details |
|---|---|
| 21.09.2019 | Email sent by Shri Alok Kailash Saksena seeking following information: –
“Can we lodge a claim for Inland material and that damaged due to GST action” |
| 21.09.2019 | Response to the email dated 21.09.2019 stated as under: – “Greetings of the day.
Dear Sir, Case 1. With reference to the trailing email, we would like to inform you that this incident doesn’t come under IAR policy this comes under Marine policy which we have but based on certain limitations by the insurer (in our case New India Insurance) 1. Claim has to be lodged maximum of 30 days of loss. 2. Claim has to be reported to Police and an FIR has to be raised maximum of l0 days of loss and this comes under theft/Burglary cover. 3. Police has to issue NTC – Non traceable certificate after 90 days of loss. Than the legal proceedings will start. |
Case 2. GST Action is not coved as any legal action taken from govt, organizations for non payment of mandatory compliance dues is not coved under JAR. Considering the above said facts, we will not be able to lodge a claim for the said loss now.”
3.3.9 Shri Alok Kailash Saksena has stated that he discussed the matter with the insurance agent. However, there is no material on record to show who that person was, or whether he was an insurance agent or only an employee of the CD. Nothing on record shows that the insurance company itself was approached. The only step taken by Shri Alok Kailash Saksena to carry out the CoC’s direction was a single email dated 21.09.2019, sent about a month after the 9th CoC meeting. That email was addressed to Shri S. Praveen Kumar, Dy. Manager – Operations & MIS, an employee of the CD, and not to the insurance company. The reply also came from Shri S. Praveen Kumar. He stated that the claim had to be lodged within 30 days of the loss and that losses arising from the action of the GST Department were not covered under the policy. More importantly, the minutes of the 10th to 22nd CoC meetings do not show that Shri Alok Kailash Saksena ever informed the CoC of the outcome of the exercise it had specifically directed him to undertake. As a result, the CoC was left unaware whether any claim could be lodged at all and was deprived of the opportunity to consider any other course of action.
3.3.10 In view of the above, the DC does not find a contravention of Section 25(1) of the Code on the part of Shri Alok Kailash Saksena. However, the DC is of the view that he failed to act upon the direction of the CoC with due diligence and to keep the CoC informed about the outcome of the same and has thereby contravened Sections 208(2)(a) and 208(2)(e) of the Code and Regulations 7(2)(a) and 7(2)(h) of the IP Regulations read with Clause 14 of the Code of Conduct.
3.4 Contravention – IV: Failure to maintain necessary records of the CD and production of the same before concerned authorities.
3.4.1 It was observed that the Office of the Assistant Commissioner of Commercial Taxes vide its intelligence report dated 05.12.2020 made certain observations against the CD. The report, inter alia, stated that certain goods were sold by the CD at lower prices. However, it was observed that the objections raised by Shri Alok Kailash Saksena against the said observations was rejected by the concerned authority citing non-production and maintenance of documents including purchase orders for concerned goods, written communications for cancellation and quality issues, debit and credit notes issued or received for concerned goods, proof for movement of concerned goods, and ledger and stock accounts showing accounting of concerned goods. It was noted by the Board that Shri Alok Kailash Saksena failed to maintain necessary records of the CD and to produce the same before concerned authorities/stakeholder thereby jeopardizing the value of the CD.
3.4.2 Thus, the Board held a prima facie view that Shri Alok Kailash Saksena had contravened Sections 25(1), 208(2)(a) and 208(2)(e) of the Code, Regulations 7(2)(a) and 7(2)(h) of IP regulations read with Clause 15 of the Code of Conduct for Insolvency Professionals.
Submissions by Shri Alok Kailash Saksena.
3.4.3 Shri Alok Kailash Saksena submitted that the allegation of failure to maintain and produce necessary records of the CD before the concerned authorities, as raised by the Office of the Assistant Commissioner of Commercial Taxes in their intelligence report dated 05.12.2020, was unfounded. The GST Department conducted an inspection at the ADL Factory in Bengaluru from 18.06.2020 to 20.06.2020, during the peak of the COVID-19 pandemic. Despite severe disruptions, including the closure of government offices and courts, he and the staff of the CD fully cooperated with the authorities.
3.4.4 Shri Alok Kailash Saksena further submitted that all the documents requested were provided to the GST Department, including detailed invoices, item-wise sales registers for the period from July 2017 to May 2020, GSTR-3B workings and reconciliations from April 2019 to February 2020, monthly export sales data from July 2017 to March 2020, manufacturing accounts for the years 2017-18 and 2018-19, stock statements, gate outward reports, purchase and sales orders, and two hard drives containing comprehensive records, including purchase registers, sales registers, cash book, bank book, general ledger, trial balance, Goods Inward Records with related documents and stock records. He submitted that once the hard disk was given to the GST Department, it had complete records, documents and accounts related to all purchase transactions, sales transactions, inward – outward movement, stock registers, stock movements, challan and dispatch number and all debtors and creditors and banking details.
3.4.5 Shri Alok Kailash Saksena also submitted that on 17.10.2020, a Show Cause Notice was issued by the GST Department, alleging non-production of certain documents. In response, a detailed reply was submitted on 30.11.2020, refuting the allegations and providing evidence that all requested documents, including manufacturing accounts, stock registers, and ratio analysis, had been duly shared with the GST Department. The reply also clarified that the CD did not maintain product-wise cost records as such maintenance was not prescribed under the Companies Act.
3.4.6 According to Shri Alok Kailash Saksena, the Intelligence Report dated 05.12.2020 rejected the CD’s contentions and alleged that certain goods were sold at lower prices without sufficient documentation. However, the report itself acknowledged that for any tax demand to be raised, the case must first be adjudicated—a step that was never undertaken. It is pertinent to note that when the GST Department later filed a claim based on this un-adjudicated report on 23.02.2021, he rejected the claim. The GST Department accepted this rejection and did not pursue any appeal, thereby affirming the CD’s position.
3.4.7 Shri Alok Kailash Saksena submitted that as far as the contentions of the GST Department that ‘goods were sold undervalued’ is concerned, it may be stated that the same is wholly incorrect and based on incorrect working of average prices. Although the SCN has not Page 25 of 41 raised issue of lower prices and restricted itself to furnishing documentation, it may be stated that the average price rendered product lines as below average price making them irregular transactions. This was explained as below:
| Product | Quantity Sold | Price Per Quantity |
Total Sales |
|---|---|---|---|
| Product A | 300 | 100 | 30,000 |
| Product B | 500 | 160 | 80,000 |
| Product C | 1000 | 250 | 2,50,000 |
| Total | 1800 | 3,60,000 |
3.4.8 Average Price was Rs.200 (3.60 Lakhs divided by 1800). As per the working of the GST Department, Sales of Product A and Product B were irregular and the difference was taken as lower price charged. This was to dispel any doubt of any lower price in charge and the working of the department was extremely flawed being arithmetically inaccurate and unacceptable. There were no allegations in the inspection report of evasion of any type.
Analysis and Findings.
3.4.9 The DC notes that the allegation against Shri Alok Kailash Saksena was that he failed to maintain the necessary records of the CD and to produce them before the tax authorities, as a result of which the objections raised on behalf of the CD were rejected. The DC notes that the GST Department had conducted an inspection at the factory of the CD from 18.06.2020 to 20.06.2020, i.e., during the CIRP, and thereafter issued a show cause notice dated 17.10.2020, to which a reply was filed on behalf of the CD on 30.11.2020. After considering the said reply, the Office of the Assistant Commissioner of Commercial Taxes issued its intelligence report dated 05.12.2020, wherein the following was recorded: –
“Further, it was noticed that you are under insolvency resolution vide Form A Under regulation 6 of the Insolvency and Bankruptcy Board of India (Insolvency resolution process for corporate persons) Regulation 2016, order by National Company Law Tribunal (NCLT), Bangalore Bench. The insolvency resolution commenced on 26th October 2018 and Mr. Alok Kailash Saksena, Plot No. 104, Mysore Colony, Mahul Road, Chembur, Mumbai -400074 has been appointed as Interim Resolution Professional (IRP/RP). However, the said IRP was not present in the factory premises at the time of inspection and was stated to be at Mumbai. An email communication/statement was sent by IRP/RP on the day of inspection.
At the time of inspection, you have produced copies of below mentioned books of accounts/documents for verification;
1. Invoice-wise outward supply registers for the period from July 2017 to June 2020:
2. Stock Statement as on 31st May 2020:
3. Gate outward report from 1st April 2019 to 23rd March 2020:
4. Some outward tax invoices:
5. Export Sales summary: and
6. Manufacturing account for the period April-17 to March-18 and April 18 to March 2019.
Whereas below mentioned required books of accounts were not produced for verification.
1. Month-wise ‘Manufacturing accounts’ showing ‘quantity-wise & value-wise purchase of raw materials, quantity-wise and value of consumption of raw materials and quantity-wise and value wise finished goods for each product;
2. Month-wise ‘Cost sheets’ showing ‘Cost of manufacture’ of each product and ‘Pricing sheets’ showing ‘Sale price ‘fixed for each product;
3. Month-wise ‘Stock Register’ showing value & quantity-wise opening stock, purchase of inputs, consumption of inputs, outwards and closing stock of each product.
4. Ratio analysis
3.4.10 The report recorded following discrepancy of charging lower sale price for the goods sold in the name of all assorted goods and rejected the objection of the RP. On reasons of rejection it was recorded that he did not produce or maintained the supporting documents. The relevant extract is as under: –
“3. Whereas, this contention of the tax payer stating that assorted goods were sold at lower price due to cancellation of orders, due to quality issues, due to large number of orders were cancelled and due to GST attachment, cannot be considered as acceptable for the reason that the tax payer has not produced and maintained;
-any purchase orders for such lower priced goods
-written communications for cancellation and quality issues
-debit and credit notes issued or received for such rejected goods
-proof for movement of rejected goods
-ledger and stock accounts showing the accounting of such rejected goods
Further, GST attachment was withdrawn during 2018. Whereas, charging lower prices on assorted goods continued till the time of inspection. Furthermore, as per the sales statement and supply invoices, the goods supplied are not damaged goods.Moreover, there is huge number of goods sold in the name of assorted goods very frequently and very regularly with so many tax invoices by charging very meagre price. Therefore, reasons cited by the tax payer in support of such act of charging lower prices are rejectable. On the contrary, the reasons mentioned in the notice for considering such tax invoices covering such transactions as false and incorrect are justifiable.
…
3. …
Whereas, to justify his contention, the taxable person has not provided any documentary evidences like monthly quantity-wise and product-wise manufacturing accounts to prove the correctness of objection. It may be noted that the average price of the product HPL has fallen to Rs. 168 during FY 2019-20 which is 37.42% of the average price charged in FY 2017-18. Similarly, due average price charged during FY 2019-20 for MFC/MFM was Rs. 151 which was 44% of the prices of FY 2017-18. Similarly, the prices of PPB charged during FY 2019-20 was Rs.134 which was 60% of the prices charged during FY 2017-18. That the GP ratio of the tax payer for the above period was affected only marginally proves that there was no increase in cost of production and that die turnover of the tax payer has fallen down due to lower sales prices resulting into drop in total turnover and accordingly the tax liability arising therefrom. Therefore, his contention is rejectable and, on the contrary, the reasons mentioned in the notice are justifiable
4. In respect of declared sale turnover not commensurate with consumption of cost of power and fuel, the taxable person contends that it is in consonance with each other. Whereas, he has not produced arty documentary evidences proving the correctness. Therefore, reasons mentioned in the notice is justifiable and the contention of the taxable person is rejectable.
5. In respect of non-maintenance of complete, true and correct books of accounts, the taxable person submits that he has maintained books of accounts in accordance with law. Whereas, he has not submitted complete and prescribed books of accounts for verification. Quantity-wise and Product-wise and monthwise manufacturing accounts, Cost sheets, Pricing sheets have not been submitted primarily in addition to all other books of accounts like ledger accounts, Journals, Trail balances, Profit and loss accounts, Balance sheets etc., Therefore, his contention that he has maintained complete books of account* not justifiable.
6. In respect of difference between stock statement and sale statement; the taxable person has failed to justify the correctness by submitting related books of accounts and documents like month-wise Stock statement for all the tax periods from July 2017 till the date of inspection. Therefore, his objection is rejectable.
For the reasons that the taxable person has failed to justify the observations made in the notice by submitting required books of accounts and documentary documents and there are no reasons to accept his objections, the taxable person is liable to pay additional tax of Rs.15,52,92,439 and penalty of Rs.15,52,92,439 for the period from July 2017 to Mar 2020 as proposed in the notice for the offence of selling of goods by charging lower price by generating ‘ false and incorrect tax invoices’ with an the intention to evade the taxes.
In order to create demand of above mentioned additional tax and penalty along with applicable interest, the taxable person is required to be taken up for adjudication. This intelligence report is for utilisation at the time of adjudication.
3.4.11 The DC observes from the above extracts of the intelligence report, that the department had clearly set out the documents which were produced for verification and those which were not produced. The documents which were not produced included the month-wise manufacturing accounts showing the quantity and value of raw materials and finished goods, the cost sheets and pricing sheets, the month-wise stock register and the ratio analysis. Further, while rejecting the objections of the CD, the department also recorded that the CD had neither produced nor maintained the purchase orders, written communications, debit and credit notes, proof of movement and the ledger and the stock accounts in respect of the goods which were claimed to have been rejected. On this basis, the report proposed an additional tax of Rs.15.52 crore and an equal amount of penalty for the period from July 2017 to March 2020.
3.4.12 Shri Alok Kailash Saksena submitted that all the documents sought by the GST Department were duly provided, including two hard drives containing the complete records of the CD, and that product-wise cost records were not required to be maintained under the Companies Act. The DC is unable to accept this submission. The intelligence report is an official record prepared after considering the reply of the CD dated 30.11.2020, and it specifically recorded, at more than one place, the documents which were not produced. The list of documents which Shri Alok Kailash Saksena claimed to have furnished included the annual manufacturing accounts for FY 2017-18 and FY 201819 and the stock statement for May 2020, but it does not include the month-wise manufacturing accounts or the month-wise stock register which were specifically sought by the department. He also did not place on record any index or acknowledgement to show that these records were contained in the hard drives handed over to the department.
3.4.13 The DC further notes that every registered person under the GST law is required to keep and maintain a true and correct account of the production or manufacture of goods, of inward and outward supplies and of the stock of goods under Section 35(1) of the Central Goods and Services Tax Act, 2017, and a person manufacturing goods is also required to maintain monthly production accounts under Rule 56(12) of the Central Goods and Services Tax Rules, 2017. . From 26.10.2018 onwards, the CD was being run as a going concern under the management of Shri Alok Kailash Saksena, and it was his responsibility to ensure that these records were maintained and produced whenever required by the authorities. The DC also notes that after the issuance of the intelligence report dated 05.12.2020, there is nothing on record to show that Shri Alok Kailash Saksena made any effort to point out to the department that the documents had already been furnished or to get the report corrected. The fact that the department did not pursue its claim after it was rejected by him does not cure the failure to maintain and produce the records.
3.4.14 At the same time, the DC is conscious that Shri Alok Kailash Saksena cannot be held responsible for the maintenance of records relating to the period prior to the commencement of the CIRP on 26.10.2018, which was under the control of the erstwhile management, and therefore the examination of the DC is confined to the records pertaining to the period of the CIRP.
3.4.15 In view of the above, the DC is of the considered view that Shri Alok Kailash Saksena failed to maintain and produce before the tax authorities the necessary records of the CD pertaining to the CIRP period, which exposed the CD to the proposed demand of more than Rs.31 crore, and thereby contravened Sections 25(1), 208(2)(a) and 208(2)(e) of the Code and Regulations 7(2)(a) and 7(2)(h) of the IP Regulations.
3.5 Contravention – V: Failure to Consider the Resolution Plan in accordance with Applicable Provisions of the Code.
3.5.1 It was alleged by the complainant that Shri Alok Kailash Saksena failed to consider the resolution plan filed by Mohammed Enterprises (Tanzania) Limited (METL) in accordance with Section 30(2) of the Code. It was further observed that the said resolution plan did not provide details of the actual resolution applicant, disclosures under Section 29A, source of funds and is predicated on contingencies. It was also observed that he had got the METL’s plan approved in an undue haste.
3.5.2 It was observed by the Board that an email was sent to Shri Alok Kailash Saksena asking him to clarify on the said allegation, interalia, other allegations vide email dated 11.07.2024. Subsequently, even though Shri Alok Kailash Saksena had provided his reply to the other allegations in the complaint vide email dated 18.07.2024, the present allegation was not addressed in the said email. Subsequently, vide email dated 24.07.2024, Shri Alok Kailash Saksena replied that an IA 10 of 2022 is pending adjudication before the AA that included the present issue interalia other issues. However, Shri Alok Kailash Saksena did not provide any specific reply to the said allegation. In the absence of a reply to the present issue, it was observed that Shri Alok Kailash Saksena failed to consider the plan of the RA, METL in accordance with Section 30(2) of the Code.
3.5.3 Thus, the Board was of the prima facie view that Shri Alok Kailash Saksena had contravened Section 30(2), 208(2)(a) 208(2)(e) of the Code, Regulations 7(2)(a) and 7(2)(h) of the IP regulations read with Clause 14 of the Code of Conduct.
Submissions by Shri Alok Kailash Saksena.
3.5.4 Shri Alok Kailash Saksena submitted that the allegation of failure to consider the resolution plan filed by Mohammed Enterprises (Tanzania) Limited (METL) in accordance with Section 30(2) of the Code was without merit. It was submitted that the complainant, being the promoter and the director of the suspended Board had no locus standi to raise objections regarding the resolution plan, which had already been approved by 100% voting of the CoC and was pending before the AA.
3.5.5 He further submitted that the resolution plan was thoroughly discussed, debated, and deliberated upon by the CoC in its various meetings, including the assessment of the feasibility and viability of the plan, in strict accordance with the provisions of the Code and the regulations thereunder. The resolution applicant, METL, was confirmed as eligible under Section 29A of the Code, and he, along with the CoC, duly verified all necessary compliances with the Code. It further submitted that METL had submitted an undertaking and affidavit regarding its eligibility to submit a resolution plan under Section 29A of the Code.
3.5.6 Shri Alok Kailash Saksena submitted that the allegation with regard to the identity of the resolution applicant was totally baseless and unfounded. METL was the resolution applicant, as evidenced by the submission of the Expression of Interest (EOI), the submission of the Bank Guarantee of Rs.30 crore, and the submission of the resolution plan itself. METL transparently stated in the plan that any actions for implementation could be conducted directly by METL or through any of its group companies or an Acquisition SPV, all of which would be compliant with Section 29A of the Code. Therefore, there was no ambiguity regarding the identity of the resolution applicant, and the claim that the plan lacked details about the actual applicant is unfounded.
3.5.7 Shri Alok Kailash Saksena further submitted that METL made all necessary disclosures as per Section 29A of the Code. The resolution plan explicitly confirmed that METL was eligible under Section 29A of the Code to submit the plan. The affidavit confirming this eligibility was submitted along with the plan and was duly documented. Additionally, Mazars LLP was appointed to verify Section 29A compliance of the promoters and directors and group companies/connected parties, and no adverse findings were reported. These thorough disclosures and verifications demonstrate full compliance with the provisions of the Code.
3.5.8 The resolution plan provided a comprehensive breakdown of the sources of funds required for implementation. METL stated that it will utilize both internal accruals and, if necessary, raise external debt from international lenders without creating any encumbrances on the assets of the CD. METL shared financial details, balance sheet, and a certificate from a Certified Public Accountant (CPA) verifying METL’s financial capability. Additionally, comfort letters from reputable banks with long-standing relationships with METL further substantiated the financial soundness of the resolution applicant. These detailed provisions confirmed that the sources of funds were clearly identified and secured.
3.5.9 Shri Alok Kailash Saksena submitted that the claim that the plan was contingent was incorrect. While METL sought reliefs and concessions, it explicitly clarified that these were not conditions for implementing the plan. The resolution plan was not dependent on any external contingencies for its implementation. METL ensured that regulatory approvals and conditions precedent would not hinder the execution of the plan, reinforcing that the plan was not contingent.
3.5.10 Contrary to the allegations of undue haste, the resolution plan was thoroughly evaluated and approved following the prescribed procedures. The CoC took 65 days to evaluate, negotiate, and assess the plan, and an additional 22 days were spent on internal evaluation before voting. The timeline of 87 days, which accounted for 29% of the CIRP period, reflected a careful and methodical approach. This duration exceeded the model timeline suggested by IBBI for plan evaluation, further proving that the plan was not approved hastily but with due diligence.
3.5.11 Shri Alok Kailash Saksena also stated that while the other allegations raised in the complaint were addressed via email dated 18.07.2024, the present issue was not specifically addressed because it was already the subject of an ongoing adjudication in IA 10 of 2022, which included this issue among others.
Analysis and Findings.
3.5.12 As already discussed in the earlier part of this order, the question whether the Resolution Plan dated 11.02.2020 was conditional in nature was yet to be finally decided by the AA. Since this question formed one of the grounds of the present charge, the DC refrains from expressing any view on the merits of this charge at this stage, and accordingly, no findings are recorded on Contravention V in this order. The Board shall be at liberty to examine this contravention afresh in the light of the order of the AA.
3.6 Contravention – VI: Timeline violations in circulating the minutes of CoC Meetings
3.6.1 It was alleged that Shri Alok Kailash Saksena failed to circulate minutes of the 5th, 6th, 8th, 9th, 10th, 17th, 1st adjourned 19th, 20th, 21st CoC meetings as per the mandate in Regulation 24 (7) of CIRP Regulations. Further an email was sent to Shri Alok Kailash Saksena asking him to clarify on the said allegation inter alia other allegations vide email dated 11.07.2024. Subsequently, even though Shri Alok Kailash Saksena provided reply to the other allegations in the complaint vide email dated 18.07.2024, the present allegation was not addressed in the said email. Subsequently, vide email dated 24.07.2024, Shri Alok Kailash Saksena replied that an IA 10 of 2022 was pending adjudication before the AA that included the present issue inter alia other issues. However, Shri Alok Kailash Saksena did not provide any specific reply to the said allegation. In the absence of a reply to the present issue, it was observed by the Board that Shri Alok Kailash Saksena failed to circulate minutes of the 5th, 6th, 8th, 9th, 10th, 17th, 1st adjourned 19th, 20th, 21st CoC meetings as per the mandate in Regulation 24 (7) of CIRP Regulations which stated that “the resolution professional shall circulate the minutes of the meeting to all participants by electronic means within forty eight hours of the said meeting”
3.6.2 In view of the above, the Board held a prima facie view that Shri Alok Kailash Saksena had contravened Sections 208(2)(a) and 208(2)(e) of the Code, Regulation 24(7) of CIRP Regulations, Regulations 7(2)(a) and 7(2)(h) of IP regulations read with Clause 13 and 14 of the Code of Conduct.
Submission of Shri Alok Kailash Saksena.
3.6.3 Shri Alok Kailash Saksena submitted that the IBBI sought clarification on this matter via an email dated 11.07.2024. The IBBI specifically questioned the timelines for the circulation of minutes for the 5th, 6th, 8th, 9th, 10th, 17th, first adjourned 19th, 20th, and 21st CoC meetings. This same allegation has already been raised before the AA in IA 10 of 2022 and the Hon’ble High Court in WP 483 of 2023. Importantly, the Hon’ble High Court had not made any adverse order regarding the late circulation of minutes.
3.6.4 He submitted that the minutes of the 5th CoC meeting held on Friday, 05.04.2019 were circulated on Monday, 08.04.2019, as the office remained closed on the weekend, and the minutes were thus circulated within 48 working hours. On the same basis, the minutes of the 6th CoC meeting held on 12.04.2019 were circulated on 16.04.2019, the minutes of the 8th CoC meeting held on 21.06.2019 were circulated on 25.06.2019, the minutes of the 10th CoC meeting held on 06.09.2019 were circulated on 09.09.2019, the minutes of the 17th CoC meeting held on 16.01.2020 were circulated on 20.01.2020 and the minutes of the 21st CoC meeting held on 23.07.2021 were circulated on 26.07.2021, while the minutes of the 9th CoC meeting held on 20.08.2019 were circulated on the very next day.
3.6.5 As regards the first adjourned 19th CoC meeting held on 10.02.2020, Shri Alok Kailash Saksena admitted that the minutes were circulated on 13.02.2020 with a delay of one day and explained that the delay was due to the extensive work involved in the second adjourned meeting held on 11.02.2020 and the tasks which followed, including seeking extension of the CIRP and preparing data for the lenders. He also pointed out that no objection was raised by the members of the CoC in the subsequent meeting. As regards the 20th CoC meeting held on 07.03.2020, he submitted that the minutes were circulated on 11.03.2020, as Sunday and the public holiday on account of Holi were non-working days. He, therefore, submitted that since weekends and holidays are to be treated as nonworking days, the minutes were circulated within the prescribed time and the allegation was baseless.
Analysis and Findings.
3.6.6 The DC notes that the requirement of Regulation 24(7) of the CIRP Regulations regarding circulation of minutes is as under: –
“24. Conduct of meeting.
…
(7) The resolution professional shall circulate the minutes of the meeting to all participants by electronic means within forty eight hours of the said meeting.”
3.6.7 From the above, it is clear that an RP is required to circulate the minutes of a CoC meeting to all the participants within forty-eight hours of the said meeting. The period of forty-eight hours is to be counted from the meeting itself, and the regulation does not provide for exclusion of weekends or holidays. The SCN alleges delay in circulation of the minutes of nine CoC meetings, and Shri Alok Kailash Saksena has submitted the following details of the dates of the meetings and the dates of circulation of the minutes:
| COC Meeting |
Details of Meeting | Date of circulation | Remarks by IP | ||
|---|---|---|---|---|---|
| Date | Day | Date | Day | ||
| Fifth | 05.04.2019 | Friday | 08.04.2019 | Monday | Office remains closed on Weekend being Saturday and Sunday. As such there is No Delay |
| Sixth | 12.04.2019 | Friday | 16.04.2019 | Tuesday | Office remains closed on Weekend being Saturday and Sunday. As such there is No Delay |
| Seventh | 04.06.2019 | Tuesday | 05.06.2019 | Wednesday | No Delay |
| Ninth | 20.08.2019 | Tuesday | 21.08.2019 | Wednesday | No Delay |
| Tenth | 06.09.2019 | Friday | 09.09.2019 | Monday | Office remains closed on Weekend being Saturday and Sunday. As such there is No Delay |
| Seventeenth | 16.01.2020 | Thursday | 20.01.2020 | Monday | Office remains closed on Weekend being Saturday and Sunday. As such there is No Delay |
| First
Adjourned Nineteenth |
10.02.2020 | Monday | 13.02.2020 | Thursday | This Delay is of One Day for the adjourned meeting.
Since Second adjourned day, Shri Alok Kailash busy with subsequent Adjourned Meeting, Setting Up E-Voting, |
| Twentieth | 07.03.2020 | Saturday | 11.03.2020 | Wednesday | 8 March 2020 – Sunday
9 March 2020 – Day One 10 March 2020 – Public Holiday on account of Holi 11 March 2020 – Day Two and minutes were shared on Day Two |
| Twenty-first | 23.07.2021 | Friday | 26.07.2021 | Monday | Office remains closed on Weekend being Saturday and Sunday. As such there is No Delay |
3.6.8 The DC notes that the table furnished by Shri Alok Kailash Saksena refers to the 7th CoC meeting instead of the 8th CoC meeting. However, as per his own submission, the 8th CoC meeting was held on 21.06.2019 (Friday) and its minutes were circulated on 25.06.2019 (Tuesday). On the basis of the dates furnished by Shri Alok Kailash Saksena himself, the DC observes that the minutes of eight out of the nine meetings, i.e., all except the 9th CoC meeting, were circulated beyond forty-eight hours of the meeting. Shri Alok Kailash Saksena has explained the delay by contending that the office remained closed on weekends and holidays. The fact however remains that the minutes were circulated beyond the mandatory period.
3.6.9 In view of the above, the DC is of the view that Shri Alok Kailash Saksena failed to circulate the minutes of the CoC meetings within the timeline prescribed under Regulation 24(7) of the CIRP Regulations, and has thereby contravened Section 208(2)(e) of the Code, Regulation 24(7) of the CIRP Regulations and Regulations 7(2)(a) and 7(2)(h) of the IP Regulations read with Clause 13 of the Code of Conduct.
3.7 Contravention – VII: Failure to comply with the Notification dated 21.03.2020 of Central Board of Indirect Taxes and Customs.
3.7.1 It was alleged that Shri Alok Kailash Saksena failed to undertake compliances as required in terms of the Notification dated 21.03.2020 of Central Board of Indirect Taxes and Customs. It was observed by the Board that an email was sent to Shri Alok Kailash Saksena asking him to clarify on the said allegation inter alia other allegations vide email dated 11.07.2024. Subsequently, even though Shri Alok Kailash Saksena had provided the reply to the other allegations in the complaint vide email dated 18.07.2024, the present allegation was not addressed in the said email. Subsequently, vide email dated 24.07.2024, Shri Alok Kailash Saksena replied that an IA 10 of 2022 was pending adjudication before the AA that includes the present issue inter alia other issues. However, he had not provided any specific reply to the said allegation. In the absence of a reply to the present issue, it was observed by the Board that Shri Alok Kailash Saksena failed to undertake the compliances as required under Notification dated 21.03.2020 of Central Board of Indirect Taxes and Customs.
3.7.2 Thus, the Board held a prima facie view that Shri Alok Kailash Saksena had contravened Section 208(2)(a) and 208(2)(e) of the Code, Regulations 7(2) (a) and 7(2)(h) of IP regulations read with Clause 14 of the Code of Conduct.
Submission of Shri Alok Kailash Saksena.
3.7.3 Shri Alok Kailash Saksena submitted that the notification attached in the SCN pertains to companies having places of business in Daman and Diu and Dadra and Nagar Haveli. This specific notification does not apply to the CD in question, as the CD does not have any business operations in these locations. It appears there was a misunderstanding, and the intended notification to be shared was likely Notification No. 11/2020 – Central Tax, issued by the CBIC on 21.03.2020. This notification outlines the requirement for companies undergoing CIRP to obtain a new Goods and Services Tax (GST) registration.
3.7.4 He submitted that under Notification No. 11/2020-Central Tax, a corporate debtor undergoing CIRP was treated as a distinct person from the date on which an insolvency professional is appointed to manage its affairs, and is required to obtain a new GST registration in each State or Union territory where it was registered, within thirty days of such appointment, or within thirty days of the notification where the appointment was made earlier. The first return under Section 40 of the CGST Act is also required to be filed for the period from the date of becoming liable for registration till the date of grant of registration.
3.7.5 Shri Alok Kailash Saksena further submitted that the CIRP of the CD had ended on 16.03.2020, five days before the notification was issued, and the notification did not provide any clarity for cases where the CIRP had ended and the approval of the resolution plan was pending before the AA.
3.7.6 Shri Alok Kailash Saksena submitted that in view of this lack of clarity, he continued to use the existing GST number of the CD for filing returns and making GST payments so as to keep the CD running as a going concern, and did not seek a new registration. He, therefore, submitted that there was no failure on his part to comply with the notification, as it did not apply to the CD.
Analysis and Finding of the DC.
3.7.7 The DC notes that the Central Government vide Notification No. 11/2020-Central Tax dated 21.03.2020 issued under Section 148 of the Central Goods and Services Tax Act, 2017, prescribed a special procedure applicable to registered persons who are corporate debtors undergoing CIRP and whose affairs are being managed by an IRP or RP. The said notification provides as under:-
“2. Registration.- The said class of persons shall, with effect from the date of appointment of IRP/RP, be treated as a distinct person of the corporate debtor, and shall be liable to take a new registration in each of the States or Union territories where the corporate debtor was registered, within thirty days of the appointment of the IRP or RP.
Provided that in cases where the IRP/RP has been appointed prior to the date of this notification, he shall take registration within thirty days from the commencement of this notification, with effect from date of his appointment as IRP/RP
….
3.Return.- The said class of persons shall, after obtaining registration, file the first return under section 40 of the said Act, from the date on which he becomes liable to registration till the date on which registration has been granted.
…”
3.7.8 From the above, it is evident that the notification casts an obligation upon the IRP/RP to obtain a new GST registration in each of the States or Union territories where the CD was registered, within thirty days of his appointment, and in cases where the IRP/RP was Page 36 of 41 appointed prior to the date of the notification, within thirty days from the commencement of the notification. This timeline was subsequently extended up to 30.06.2020 vide Notification No. 39/2020-Central Tax dated 05.05.2020. However, even within this extended timeline, Shri Alok Kailash Saksena did not obtain a new GST registration for the CD.
3.7.9 The DC notes that Shri Alok Kailash Saksena has submitted that the period of 330 days for completion of the CIRP had expired on 16.03.2020, i.e., before the notification was issued, and therefore the notification was not applicable to the CD. The DC is unable to accept this submission. In terms of the proviso to Section 23(1) of the Code, the RP is required to continue to manage the operations of the CD even after the expiry of the CIRP period, until an order approving the resolution plan under Section 31(1) or appointing a liquidator under Section 34 is passed by the AA. In the present case, Shri Alok Kailash Saksena admittedly continued to manage the affairs of the CD and was required to file its GST returns after 16.03.2020. Therefore, on 21.03.2020 and thereafter, the CD was a corporate debtor whose affairs were being managed by an RP, and the notification squarely applied to it.
3.7.10 In view of the above, the DC is of the considered view that Shri Alok Kailash Saksena failed to obtain a new GST registration for the CD as mandated under Notification No. 11/2020-Central Tax dated 21.03.2020, and has thereby contravened Sections 208(2)(a) and 208(2)(e) of the Code and Regulations 7(2)(a) and 7(2)(h) of the IP Regulations read with Clause 14 of the Code of Conduct.
3.8 Contravention – VIII: Timeline violation in issuing the notice of the 19th CoC Meeting to the suspended board of directors
3.8.1 The Hon’ble Karnataka High Court vide order dated 22.04.2024 observed that the 19th CoC meeting which was held on 10.02.2020 had been adjourned to 3 pm of 11.02.2020.
“21. What would emerge from Regulation 19 is mandatoriness of serving of notice of each and every meeting 5 days prior to the said intended date of meeting which is undoubtedly reducible, if the Committee of Creditors through Resolution Professional, deems it fit to 24 hrs. The issue is whether this mandate has been followed or otherwise. As observed hereinabove, on 10-02-2020 the meeting had been adjourned with a specific agenda. On 11-02-2020 the meeting was scheduled to be held at 3.00 p.m. This is the notice received by the petitioner on electronic mail. It is a matter of record and not in dispute. The hue and cry of the respondents is that it is a carried forward meeting from 10-02- 2020. The 5th Respondent itself admits that it is an amended and re- stated agenda. Therefore, it becomes new agenda on the next day. The Resolution Professional also has thought that it is a new agenda and issued a notice. But, the notice falls completely foul of the Regulations and the Code, and his own mandate of 48 hours prior notice supra. Therefore, the Resolution Professional has acted contrary to what is the mandate under the statute and the resolution quoted supra. 29. The Resolution Professional, in the case at hand, appears to have involved himself more than necessary. The Resolution Professional does not participate in the meetings of the Committee of Creditors. It is important that the Resolution Professional has to give notice of each and every meeting of the Committee of Creditors to the suspended members of the Board of Directors also. The is also what is observed by the Apex Court in VIJAY KUMAR JAIN (supra). The notice that is given in the case at hand is only for the sake of giving notice. It is not in compliance with law. Therefore, the Resolution Professional has been in mortal hurry to conclude the proceedings without adhering to the rigour of the Code and the Regulations quoted hereinabove. The Apex Court clearly holds that rigours under the Code or the Regulations cannot be given a go-bye. Therefore, the Resolution Professional has to be independent and need not be in a hurry to get any resolution plan concluded. His action should be just and fair, which does not appear to be the case in the case at hand. Be that as it may, the aforesaid observation is made only for the purpose that the matter is being sent back to the table of the committee of creditors in which the Resolution Professional will again play a role in issuance of notice to the suspended Director. Therefore, the 4th respondent/Resolution Professional shall strictly adhere to the afore-quoted mandate of the statute and the judgment of the Apex Court in the case of VIJAY KUMAR JAIN supra.”
3.8.2 It was observed by the Board that the 19th CoC meeting which was held on 10.02.2020 was adjourned to a later date. The adjourned meeting was held on 11.02.2020, i.e., the very next day at 3 pm. However, the notice for the said meeting was only given to the suspended board of directors vide email dated 11.02.2020 at 12:31 pm, i.e., merely 2 and half hours before the said meeting whereas Regulation 19 of the CIRP Regulations states that “the meeting of the committee shall be called by giving not less than five days’notice in writing to every participant… (2) The committee may reduce the notice period from five days to such other period of not less than twenty-four hours, as it deems fit”. Thus, the Board observed that Shri Alok Kailash Saksena failed to circulate the notice of the 19th CoC meeting in which the resolution plan of METL was approved as per the timeline prescribed under Regulation 19 of the CIRP Regulations.
3.8.3 Thus, the Board held a prima facie view that Shri Alok Kailash Saksena had contravened Section 24(3), 208(2)(a) and 208(2)(e) of the Code, Regulation 19 of CIRP Regulations, Regulations 7(2)(a) and 7(2)(h) of IP regulations read with Clause 13 and 14 of the Code of Conduct.
Submission of Shri Alok Kailash Saksena.
3.8.4 Shri Alok Kailash Saksena submitted that this issue was also part of the proceedings in I.A 10 of 2022, which was then pending before the AA, and requested that the examination of this allegation be deferred until the AA rendered its decision. He also submitted that the issue was raised before the Hon’ble Supreme Court in SLP (C) No. 11599 of 2024 and requested that the Board not adjudicate upon it owing to its pendency before a higher court.
3.8.5 He further submitted that the adjourned meetings were held on the instructions of the CoC, as recorded in the minutes, and the notices issued clearly mentioned that these were adjourned meetings. The representatives of the suspended directors participated in all the Page 38 of 41 adjourned meetings, and the representative of the suspended director also stated that he had received all the resolution plans and was satisfied with the process, which is recorded in the minutes.
3.8.6 Shri Alok Kailash Saksena in his additional written submissions relied upon the order of the AA in IA 10/2022, wherein the following was observed: –
“Further, while examining the contention of the Applicant that there was violation of Principle of natural justice as notice for the 2nd adjourned 19th meeting of the CoC held on 11.02.2020 was not given 48 hours before, we agree with the submissions made by the CoC wherein Chandrakant Khaire’s case has been cited to the effect that an adjourned meeting is a continuation of the original meeting, and no new notice of an adjourned meeting needs to be given unless the relevant statutory provisions or rules so require. However, in the case of an adjournment sine die a fresh notice is necessary. In this case, as it was only an adjourned meeting from 10.02.2020 to 11.02 2020, fresh notice was not required to be issued under law particularly when the members had already been informed on 10.02.2020 itself.”
Analysis and Finding of the DC.
3.8.7 The DC notes that, as per the minutes on record, the 19th CoC meeting was held on 08.02.2020, and in the said meeting the CoC decided to adjourn the meeting to 5.30 pm on 10.02.2020, as both the resolution applicants had been asked to submit their final updated resolution plans by 10.00 am on that day. In the first adjourned meeting held on 10.02.2020, wherein the representative of the suspended board participated, the CoC further adjourned the meeting to 3.00 pm on 11.02.2020 for discussion on the remaining agenda, and it was in this second adjourned meeting that the Resolution Plan of METL was approved. The notice of the second adjourned meeting was sent by Shri Alok Kailash Saksena to the suspended directors by email at 12.31 pm on 11.02.2020.
3.8.8 The DC further notes that the observations of the Hon’ble High Court of Karnataka in its order dated 22.04.2024, on which the SCN had relied, have been set aside by the Hon’ble Supreme Court vide its judgment dated 03.01.2025, and therefore the submission of Shri Alok Kailash Saksena that the issue is pending before the Hon’ble Supreme Court no longer survives. Thereafter, the Hon’ble Judicial Member of the AA, while deciding IA 10/2022 vide order dated 12.01.2026, relied upon the judgment of Hon’ble Supreme Court in Chandrakant Khaire v. Dr. Shantaram Kale & Ors (1988) 4 SCC 577 wherein it was held that an adjourned meeting is a continuation of the original meeting, and no new notice of an adjourned meeting needs to be given unless the relevant statutory provisions or rules so require. However, in the case of an adjournment sine die a fresh notice is necessary. In this case, as it was an adjourned meeting from 10.02.2020 to 11.02 2020, fresh notice was not required to be issued under law. The Hon’ble Technical Member did not deal with this issue, and it was also not one of the points of difference before the Third Member.
3.8.9 The DC agrees with the above reasoning. Regulation 19 of the CIRP Regulations governs the notice for calling a meeting of the CoC, and in the present case, the adjournment was decided in the meeting itself to a fixed date and time to carry on the same business, i.e., the consideration of the resolution plans. Further in the 19th CoC meeting representative of suspended board also participated. The consideration of a revised version of the same resolution plan in the adjourned meeting does not convert it into a new meeting requiring a fresh notice. In any case, Shri Alok Kailash Saksena had informed the suspended directors about the adjourned meeting before it commenced.
3.8.10 In view of the above, the DC accepts the submission of Shri Alok Kailash Saksena on this issue.
4. Order.
4.1 In view of the foregoing discussion, the DC finds that Shri Alok Kailash Saksena failed to include the audited financial statements of the CD for the last two financial years in the IM. This was largely because he did not initiate the appointment of the statutory auditor in time, despite being aware from the very first CoC meeting that the accounts of the CD had not been audited. He also failed to act with due diligence on the direction of the CoC to explore an insurance claim for the damaged inventory and did not keep the CoC informed of the outcome. Further, he failed to maintain, and to produce before the tax authorities, the necessary records of the CD pertaining to the CIRP period, which exposed the CD to a huge demand of tax and penalty. He also circulated the minutes of several CoC meetings beyond the period of forty-eight hours prescribed under the Regulations and did not obtain a new GST registration for the CD as required under Notification No. 11/2020-Central Tax dated 21.03.2020, even though he continued to manage the affairs of the CD. The DC notes that the above-said contraventions by Shri Alok Kailash Saksena impinge on the very objective of the Code of timely insolvency resolution and maximising the value of stakeholders through transparent conduct of the process. The DC has considered these factors while deciding the quantum of punishment for Shri Alok Kailash Saksena.
4.2 As regards Contravention V, the DC has refrained from recording any finding at this stage, since the question of whether the Resolution Plan is conditional in nature, is yet to be finally adjudicated by the AA.
4.3 In exercise of the powers conferred under Section 220(2) of the Code read with Regulation 13 of the Inspection and Investigation Regulations, the DC hereby:
a) suspends the registration of Shri Alok Kailash Saksena (Registration No. IBBI/IPA-001/IP-P00056/2017-18/10134) for a period of two years. In terms of Section 206 of the Code, Shri Alok Kailash Saksena shall not be eligible to continue his existing assignments; and
b) directs Shri Alok Kailash Saksena to keep the Board informed of the outcome of IA 161/2020 before the AA and of any further proceedings. The Board shall be at liberty to examine this contravention afresh in the light of those outcomes.
4.4 This Order shall come into force on expiry of 30 days from the date of its issue.
4.5 A copy of this order shall be sent to the CoC/SCC of all the corporate debtors in which Shri Alok Kailash Saksena is providing his services, if any. The CoC of the respective corporate debtors shall take necessary steps for the replacement of Shri Alok Kailash Saksena in accordance with law.
4.6 A copy of this order shall be forwarded to the Indian Institute of Insolvency Professionals of ICAI, where Shri Alok Kailash Saksena is enrolled as a member for their further necessary action.
4.7 A copy of this Order shall also be forwarded to the Registrar of the Principal Bench of the National Company Law Tribunal, New Delhi, for information.
4.8 Accordingly, the show cause notice is disposed of.
Sd!–
(Dr. Bhushan Kumar Sinha)
Whole Time Member
Insolvency and Bankruptcy Board of India
Sd!–
(Jayanti Prasad)
Whole Time Member
Insolvency and Bankruptcy Board of India
Dated: 13 November 2026
Place: New Delhi
