DC is of the view that two serious contraventions have established beyond doubt. Firstly his non-cooperation to inspecting and investigating authority is in grave violation of Regulation 4(4), Regulation 4(7), Regulation 8 (4) and Regulation 8(8)of the Inspection and Investigation Regulations; Clause 18 and Clause 19 of the Code of Conduct. Furthermore, authority of the investigation flows from the Code and on any grounds, the insolvency professional is not empowered to withhold relevant information, in case investigation has been launched. Section 218 (1) of the Code stipulates:
“Where the Board, on receipt of a complaint under Section 217 or has reasonable grounds to believe that any insolvency professional agency or insolvency professional or an information utility has contravened any of the provisions of the Code or the rules or regulations made or directions issued by the Board thereunder, it may, at any time by an order in writing, direct any person or persons to act as an investigating authority to conduct an inspection or investigation of the insolvency professional agency or insolvency professional or information utility.”
From conduct of Mr. Vineet Aggarwal it is clear, he has been intentionally non-cooperative in discharge of his duties as an Insolvency Professional. Such negligent and noncooperative conduct has been proven, even at the stage of personal hearing, where he chose to remain absent despite due opportunity of personal hearing been accorded to him twice. Thus, such intentional reckless conducts warrant stringent punishment.
Definition of related party as provided in Section 5 (24) (b) includes key managerial personnel of the CD or a relative of a key managerial personnel of the CD. This aspect has been simply overlooked as Mr Vineet Aggarwal failed to file the due disclosures for the same.
Therefore, the DC, in exercise of the powers conferred under Section 220(2) of the Code read with Regulation 13 of the IBBI (Inspection and Investigation) Regulations, 2017 hereby suspends the registration of Mr. Vineet Aggarwal (Registration No. IBBI/IPA-001/IP-P00475/2017-2018/10818) for a period of two years.
INSOLVENCY AND BANKRUPTCY BOARD OF INDIA
(Disciplinary Committee)
Order No. IBBI/DC/155/2023 Dated: 14th March 2023
In the matter of Mr. Vineet Aggarwal, Insolvency Professional (IP) under Section 220 of the Insolvency and Bankruptcy Code, 2016 (Code) read with Regulation 11 of the Insolvency and Bankruptcy Board of India (Insolvency Professional) Regulations, 2016 and Regulation 13 of the Insolvency and Bankruptcy Board of India (Inspection and Investigation) Regulations, 2017.
This Order disposes of the Show Cause Notice (SCN) No. IBBI/IP/INSP/2022/144 dated 27.12.2022, issued to Mr. Vineet Aggarwal, Plot No. 2, Sampurnanand Nagar, Sigra, Varanasi, Uttar Pradesh- 221010 (hereinafter referred as “IP”) who is a Professional Member of the Indian Institute of Insolvency Professionals of ICAI and an Insolvency Professional registered with the Insolvency and Bankruptcy Board of India (IBBI) with Registration No. IBBI/IPA-001/IP-P00475/2017-2018/10818.
1. Background
1.1 The SCN refers to contraventions of provisions of the Code and regulations framed thereunder in respect of processing of cases in relation to three CDs Viz; (i) M/S NU Tek India Limited, (ii) JBK Developers Private Limited and (iii) VS Matrix Private Limited.
1.2 The National Company Law Tribunal, New Delhi (AA) had admitted the application under Section 7 of the Code for corporate insolvency resolution process (CIRP) of M/S NU Tek India Limited (CD-1) vide Order dated 23.08.2019. The IP was appointed as RP by the CoC and confirmed by the AA vide order dated 1.10.2019. The AA passed the order for liquidation of CD on 22.06.2020 and the IP was appointed as Liquidator vide the same order.
1.3 The AA had admitted the application under Section 9 of the Code for corporate insolvency resolution process (CIRP) of JBK Developers Private Limited (CD-2) vide Order dated 17.08.2020.
1.4 The AA had admitted the application under Section 7 of the Code for corporate insolvency resolution process (CIRP) of VS Matrix Private Limited (CD-3) vide Order dated 30.08.2019 and the IP was appointed as IRP in the said CIRP of CD-3 vide the same order.
1.5 In exercise of its powers under section 218 of the Code read with the IBBI (Inspection and Investigation) Regulations, 2017, the IBBI appointed an Inspecting Authority to conduct an inspection of Mr. Vineet Agarwal in the related matters. The Inspecting Authority served the notice of Inspection on the IP on 08.05.2022, in the matter of CIRP of CD-1, and CD-2. The draft inspection report dated 28.6.2022 was shared with the IP and the final inspection report was submitted to the Board on 01.08.2022.
1.6 In the meantime, the Board ordered investigation in respect of CD-3 and the notice of investigation was issued to Mr. Vineet Aggarwal on 29.06.2022 by the Investigating Authority.
1.7 The IBBI on 27.12.2022, had issued the SCN to Mr. Vineet Aggarwal, based on findings in the Inspection Report and Investigating Report in respect of his role as IRP/RP/Liquidator. The SCN alleged contraventions of several provisions of the Insolvency and Bankruptcy Code, 2016 (Code), IBBI (Insolvency Resolution Process for Corporate Persons) Regulations 2016 (CIRP Regulations), IBBI (Inspection and Investigation) Regulations, 2017 (Inspection and Investigation Regulations) the IBBI (Insolvency Professionals) Regulations, 2016 (IP Regulations), IBBI (Liquidation Process) Regulations, 2016 (Liquidation Regulations) and the Code of Conduct. Mr. Vineet submitted his reply to the SCN on 9.01.2023.
1.8 The SCN, response of Mr. Vineet Aggarwal to the SCN and other material available on record were referred to the Disciplinary Committee (DC) for disposal of the SCN. Mr. Vineet Aggarwal was given an opportunity of personal hearing before the DC held on 16.02.2023, however, he refrained from attending it, and through email communication sought a fresh date after 26th February 2023.
1.9 Accordingly, to meet the ends of natural justice, a fresh date of hearing was fixed for 2.03.2023. Again, he not only didn’t appear, but this time, gave no response or any cogent reason for his absence. Hence, DC has no other option but to dispose of the SCN based on material on record.
2. Alleged Contraventions, Submissions of IP and Findings
The contraventions alleged in the SCN and submissions by Mr. Vineet Aggarwal are summarized as follows:
2.1 Non-Cooperation to the Inspecting and the Investigating Authority in conduct of inspection and investigation
2.1.1 It is noted that Regulation 4 (4) of the Inspection and Investigation Regulations provides that it shall be the duty of the service provider to produce records in his custody or control and furnish to the Inspecting Authority. Further, Regulation 4(7) of Inspection and Investigation Regulations also requires the IP to give to the Inspecting Authority all assistance which the Inspecting Authority may reasonably require. Regulation 8(4) and 8(8) of the Inspection and Investigation Regulations have similar provisions for investigation. Clause 18 of Code of Conduct for Insolvency Professionals in the First schedule of IBBI (Insolvency Professional) Regulations, 2016 (Code of Conduct) also requires that the IP must cooperate and be available for inspection and investigation carried out by the Board.
2.1.2 It was alleged in the SCN that the Inspecting Authority served the notice of inspection to the IP, Mr. Vineet Aggarwal, on 8.05.2022, requesting him to submit requisite documents and records pertaining to CIRP/Liquidation of NU Tek India Limited and CIRP of JBK Developers Private Limited. The notice of inspection was followed by a reminder vide email dated 24.5.2022. The IP, Mr. Vineet, in response to the reminder email, requested for a 15-days extension. On the failure of the IP to submit the reply to notice of inspection along with requisite documents even during extended period, another reminder was sent by the Inspecting Authority vide email dated 13.06.2022. However, Mr. Vineet, failed to submit the required documents to the Inspecting Authority.
2.1.3 It is further noted that a notice of investigation asking for a reply along with supporting documents in the matter of allegations pertaining to V S Matrix Private Limited was served on Mr. Vineet, by the Investigating Authority on 29.06.2022. On non-receipt of his reply, a reminder was sent vide e-mail dated 11.07.2022.
2.1.4 It is noted that Mr. Vineet, vide email dated 12.07.2022, showed his inability to reply to those allegations on the ground of pendency of litigation on similar matters filed by the same complainant before Adjudicating Authority (AA). In response, the Investigating Authority vide email dated 12.07.2022, informed Mr. Vineet, that the complaint has been filed before the Board by the complainant in compliance of AA order dated 22.04.2022, advising the complainant to approach IBBI for initiation of any action against the IP.
5.1.5 It is noted that the investigating authority vide the said email, requested him to provide point wise response to the allegations raised in the investigation notice. However, he failed to submit, the required point wise reply, to the allegations mentioned in the notice of investigation. Thus, the IP, has rendered complete non-cooperation to both the Inspecting Authority as well as to the Investigating Authority.
2.1.6 Accordingly, the Board was of the prima facie opinion that IP had, inter alia, contravened Regulation 4(4), 4(7), 8(4), and 8(8) of the Inspection and Investigation Regulations and Clause 18 and 19 of the Code of Conduct as specified in the First Schedule of IP Regulations (Code of Conduct).
Submission by IP
2.1.7 Mr. Vineet submitted, that he had replied to IBBI in the month of December, 2021 itself and had provided each and every detail in respect of complaint filed by Mr. Ashish Bankar, who was Chief Financial Officer (CFO) of Nu Tek India Limited since 31.07.2015, to 28.02.2019, and upon whose application, the CIRP had commenced against Nu Tek India Limited. He submitted that he had provided all the relevant documents along with the said reply to the Complaint.
2.1.8 Mr. Vineet submitted that the IA erred in making observations about the disclosures made by him and appointment of professionals made by him in the CIRP/Liquidation of NU Tek India Limited. He submitted that, in so far as the inspection of JBK Developers Private Limited is concerned, most of the information was with Advocate engaged in the process, who due to medical emergency and premature deaths in his family was not available for a very long period and due to which the information was not provided in time.
2.1.9 He submitted that in case of V S Matrix Private Limited, the complaint was filed by COC members who are part of the ongoing proceedings before Hon’ble NCLT and legal points raised in respect of ownership of the property in dispute is still pending before the Hon’ble NCLT and the same can be decided by an order of the Court. He further submitted, that since the matter is sub-judice, he was not in a position to comment on the same, as was informed by him vide an e-mail dated 12.07.2022.
2.1.10 Mr. Vineet submitted that he had an impression that he had already provided all details with the reply in the matter Nu Tek India Limited and that he was not in a position to provide the required information in the matter of JBK Developer Private Limited and V S Matrix Private Limited. Thus, he submitted that, non-cooperation by him, in respect of the investigation/inspection, was not intentional.
Findings of DC
2.1.11 Regulation 4 of the Inspection and Investigation Regulations states that:
“4. Conduct of Inspection.
… (4) It shall be the duty of the service provider and an associated person to produce before the Inspecting Authority such records in his custody or control and furnish to the Inspecting Authority such statements and information relating to its activities within such time as the Inspecting Authority may require…
… (7) It shall be the duty of the service provider and an associated person to give to the Inspecting Authority all assistance which the Inspecting Authority may reasonably require in connection with the inspection.”
2.1.12 Regulation 8 of the Inspection and Investigation Regulations states that:
“8. Conduct of Investigation
… (4) It shall be the duty of the service provider and an associated person to produce before the Investigating Authority such records in his custody or control and furnish to the Investigating Authority such statements and information relating to its activities within such time as the Investigating Authority may require….
… (8) It shall be the duty of the service provider and an associated person to give to the Investigating Authority all assistance which the Investigating Authority may reasonably require in connection with the investigation”.
2.1.13 Clause 18 of the Code of Conduct states that:
“18. An insolvency professional must appear, co-operate and be available for inspections and investigations carried out by the Board, any person authorised by the Board or the insolvency professional agency with which he is enrolled.”
2.1.14 Clause 19 of the Code of Conduct provides that:
“19. An insolvency professional must provide all information and records as may be required by the Board or the insolvency professional agency with which he is enrolled.”
2.1.15 The conduct of Mr. Vineet in not extending the required assistance and providing the required documents constitutes non-cooperation and failure by him in discharge of his duties under the Code and Rules and Regulations. Thus, the DC finds Mr. Vineet’s act as dereliction of his duty and contravening Inspection and Investigation Regulations and Code of Conduct. The charge of non-cooperation, further fructified by his continued absence from the DC hearing dates without any prior exemption or postponement.
In the CIRP/Liquidation of M/S NU Tek India Limited
2.2 Non-disclosure of related party status of Professional engaged and Appointment of related party to CD as professional.
2.2.1 It is noted that IBBI’s circular dated January 16, 2018, provides for disclosures to be filed by Insolvency Professionals and other Professionals appointed by Insolvency Professionals conducting Resolution Processes. Further, Regulation 7 of the IBBI (Insolvency Professionals) Regulations, 2016 (IP Regulations) provides for the IP to abide, at all times, by the Code, rules, regulations, and guidelines thereunder and abide by the Code of Conduct specified in the First Schedule to the Regulations.
2.2.2 It is noted that as per the relationship disclosure submitted by the IP, Mr. Vineet, to the Indian Institute of Insolvency professionals of ICAI (IIIPI), as available on website of IIIPI, SHV Legalcorp Consultants Private Limited was appointed for legal consultancy during the CIRP of M/s NU Tek India Limited (CD). It is noted that the relationship of SHV Legalcorp Consultants Private Limited with the CD has been indicated as ‘NA’ therein.
2.2.3 However, it is noted that the tax invoices dated 13.10.2018 and 09.01.2019 mentioned Mr. Sanjay Kumar Singh as the Director of SHV Legalcorp Consultants Private Limited. It is also observed from NEFT forms pertaining to CD that Mr. Sanjay Kumar Singh was earlier the authorised signatory of the CD (prior to commencement of CIRP) for signing of various cheques towards various payments. However, the IP, Mr. Vineet, had not disclosed the nature of relationship of Mr. Sanjay Kumar Singh with the CD in the said disclosure form submitted to IIIPI.
2.2.4 It is noted that Regulation 7 of the IBBI (Liquidation Process) Regulations, 2016 (Liquidation Regulations) provides that a liquidator may appoint professionals to assist him in the discharge of his duties. It further provides that the liquidator shall not appoint a professional who is his relative, is a related party of the corporate debtor or has served as an auditor to the corporate debtor in the five years preceding the liquidation commencement date.
2.2.5 It was alleged in the SCN that Mr. Vineet, had appointed Mr. Sanjay Kumar Singh, Director of SHV Legalcorp Consultants Private Limited as his legal counsel, which is evident from the invoices raised by Mr. Sanjay. It is noted that prior to being appointed as legal counsel, Advocate Mr. Sanjay Kumar Singh was associated with the CD till as late as December 2018, as indicated by the various cheques and NEFT authorization forms signed by him.
2.2.6 It is noted that as per section 5(24)(b) of the Code, key managerial personnel of the corporate debtor or a relative of key managerial personnel of the corporate debtor is a related party of the corporate debtor. Therefore, appointment of Mr. Sanjay Kumar Singh as Legal Counsel during liquidation process of the corporate debtor is in violation of Regulation 7 of the Liquidation Regulation.
2.2.7 Accordingly, the Board was of the prima facie opinion that IP had, inter alia, violated Regulation 7 of the IP Regulations, Circular dated January 16, 2018, Clause 12 and 14 of the Code of Conduct, , Regulation 7 of the Liquidation Regulations.
Submission by IP
2.2.8 Mr. Vineet submitted that there has been no violation of IBBI circular dated 16th January, 2018 and Regulation 7 of the IBBI (Insolvency Professionals) Regulations, 2016. He submitted that, SHV Legalcorp Consultants Private Limited had never been a related party entity to the corporate debtor and that is why the relationship at the time of disclosure, had been shown as NA.
2.2.9 He further submitted that, one of the directors of SHV Legalcorp Consultants Private Limited, Mr. Sanjay Kumar Singh was working as Company Secretary of Corporate Debtor till December, 2015 in a professional capacity. After resigning from the Corporate Debtor, he commenced his own legal practice as Advocate and was providing professional services to various clients. He submitted that the SHV Legalcorp Consultants Private Limited was incorporated in August, 2017, which is around one and half year after resignation of Sanjay Kumar Singh from the corporate debtor as a company secretary. The insolvency commenced on 23.08.2019, and that he was appointed as RP on 31.10.2019. At the time of disclosure, SHV Legalcorp Consultants Private Limited had no relationship, and it was an independent entity providing services corporate advisory and legal services to different entities, which has no relationship with the business of CD.
2.2.10 Mr. Vineet submitted that the IA had relied upon some cheques signed by Sanjay Kumar Singh when he was working as company secretary in year 2013 to 2015. However, there have been no cheques, which have been signed by him after his resignation in December, 2015. He further submitted, that the IA had relied on an invoice for an amount of Rs.17,000/- for consultancy charges raised in the month of October, 2018 and one Invoice for an amount of Rs.10,000/- raised in the month of January, 2019. He submitted that the invoice itself shows that it is in respect of consultancy charges and the amount is miniscule.
2.2.11 Mr. Vineet further submitted that as per the definition of related party prescribed under IBC, SHV Legalcorp Consultants Private Limited in not falling in any of the parameters considered for relation of two entities. He submitted that the complaint was lodged with IBBI by one, Mr. Ashish Bankar, who himself was CFO and KMP of corporate debtor till February, 2019 and that he filed the application under section 7 of the Code for commencement of CIRP in May, 2019 itself as Financial Creditor. He submitted that the fee of SHV Legalcorp Consultants Private Limited for providing services during CIRP, was approved by the COC in its Sixth Meeting held on 27.02.2020, when the complainant himself was present in the meeting and had specifically approved the payment to SHV Legalcorp Consultants Private Limited without raising any contention as mentioned in his complaint to IBBI.
2.2.12 He further submitted that the complaint was only lodged to derail the liquidation process when two applications under section 43 & 44 and 66 bearing IA no. 5127/2021 and 5570/2021 were filed against the promoters and the complainant Mr. Ashish Banker, for recovery of more than Rs.73 crores. Thus, he submitted that there has been no violation of Regulation 7 of the IP Regulations and circular dated 16th January, 2018 or Clause 12 and 14 of the Code of Conduct.
2.2.13 Mr.Vineet, submitted that Mr. Sanjay Kumar had resigned from the Company in December, 2015, from the post of Company Secretary. He submitted, that Mr. Sanjay, had never acted as auditor of the Corporate Debtor and that the bills relied upon by the Investigating Authority were for consultancy charges as an Independent Professional, where the Corporate Debtor was one of the many clients for whom Mr. Sanjay was providing services in his professional capacity.
2.2.14 Mr. Vineet submitted that Mr. Sanjay, was a highly qualified professional having an experience of more than 21 years in the field of law, advisory, finance and management. He holds an all India 8th Rank of the Company Secretaryship Final Exam, while also being a member of Bars of High Court of Delhi and Supreme Court of India. Mr. Vineet submitted that Mr. Sanjay had never acted as KMP after his resignation from Company Secretary position in December, 2015, and that any consultant providing independent professional consultancy to his clients could not be considered as related party to the client, and provisions of Section 5(24) of the Code were not attracted in his appointment as a counsel to the liquidator. He further submitted that the NEFT forms/cheques signed by Mr. Sanjay Kumar, are related to the year 2013-15, which were prior to his registration as Company Secretary, were much prior to the liquidation commencement in the year 2020.
2.2.15 The IP, Mr. Vineet, further submitted that as on the commencement of CIRP, the KMP of the corporate debtor, as per MCA records, were Mr. Inder Sharma, MD and Chairman, Mr. Ayub Younes, Director, Mr. Amar Sarin, Director, Mr. Vijay Tandon, Director and Ms. Bhawani Charak, Company Secretary. Mr. Vineet submitted that Mr. Sanjay was not related to any of the KMPs as mentioned as per the MCA records, nor was he related with the corporate Debtor as KMP after his resignation from the post of Company Secretary in December, 2015.
Findings of DC
2.2.16 Regulation 7 of the IP Regulations states that:
“7. Certificate of registration.
… (2) The registration shall be subject to the conditions that the insolvency professional shall –
(a) at all times abide by the Code, rules, regulations, and guidelines thereunder and the byelaws of the insolvency professional agency with which he is enrolled;…”
2.2.17 Regulation 7 of the Liquidation Regulation states that:
“7. Appointment of professionals
(1) A liquidator may appoint professionals to assist him in the discharge of his duties, obligations and functions for a reasonable remuneration and such remuneration shall form part of the liquidation cost.
(2) The liquidator shall not appoint a professional under sub-regulation (1) who is his relative, is a related party of the corporate debtor or has served as an auditor to the corporate debtor in the five years preceding the liquidation commencement date.
(3) A professional appointed or proposed to be appointed under sub-regulation (1) shall disclose the existence of any pecuniary or personal relationship with any of the stakeholders, or the concerned corporate debtor as soon as he becomes aware of it, to the liquidator.”
2.2.18 Clause 12 of the Code of Conduct provides that:
“12. An insolvency professional must not conceal any material information or knowingly make a misleading statement to the Board, the Adjudicating Authority, or any stakeholder, as applicable.”
2.2.19 Clause 14 of the Code of Conduct provides that:
“14. An insolvency professional must not act with mala fide or be negligent while performing its functions and duties under the Code.”
2.2.20 It was the duty of Mr. Vineet, to disclose past employment or association of the professionals engaged by him with the CD. He cannot be allowed to shirk away from his responsibility, enshrined under the Code and the Rules and Regulations thereof, of such a disclosure. Non-disclosure of the required details about the professional engaged by Mr. Vineet has contravened IP Regulations, circular issued by IBBI and Code of Conduct.
2.3 Non-determination of preferential and other transactions
2.3.1 Regulation 35A of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (CIRP Regulation) provide for the RP to form an opinion on preferential and other transactions within 75 days of the commencement (of CIRP) and to make a determination on the same within 115 days of commencement and to file application to AA for appropriate relief within 135 days of commencement. Further, as per Regulation 40B of CIRP Regulations, IRP or RP is required to fill form CIRP-6 within seven days of filing application in respect of preferential transaction, undervalued transaction, fraudulent transaction, and extortionate transaction.
2.3.2 It is noted that none of the minutes of the CoC meetings mentioned anything about the opinion of the said IP, or about determination or filing of preferential and other transactions covered under Sections 43, 45, 50 or 66 of the Code. It is also noted that Mr. Vineet, did not file CIRP Form 6 on the website of the Board to indicate that any application for avoidance of transaction has been filed.
2.3.3 Accordingly, the Board was of the prima facie opinion that IP had, inter alia, violated Regulation 35A and 40B(1) of the CIRP Regulations and Clause 13 and 14 of Code of Conduct.
Submissions by IP
2.3.4 Mr. Vineet submitted that, as per the record and explanations given, there was no reason to believe that there were preferential transactions and that the CoC was of the view, that the RP should focus on the resolution of the corporate debtor in order to realize their dues. The RP was able to get four expressions of interests withdrawn with the permission of the CoC and the CoC decided to liquidate the corporate debtor, for which the order was passed on 22.06.2020.
2.3.5 He further submitted, that after the commencement of liquidation, the liquidator received a notice form SEBI detailing, the misappropriation of funds and other violations by the Ex-Management including the complaint, resulting in the appointment of transaction auditor and filing of application under section 43, 44 and 66 against the management/promoter including the Complainant. In view of this, he submitted that there has been no violation of any of the regulations as mentioned in the show cause notice.
Findings of DC
2.3.6 Regulation 35A of the CIRP Regulations states that:
“35A. Preferential and other transactions.
(1) On or before the seventy-fifth day of the insolvency commencement date, the resolution professional shall form an opinion whether the corporate debtor has been subjected to any transaction covered under sections 43, 45, 50 or 66.
(2) Where the resolution professional is of the opinion that the corporate debtor has been subjected to any transactions covered under sections 43, 45, 50 or 66, he shall make a determination on or before the one hundred and fifteenth day of the insolvency commencement date.
(3) Where the resolution professional makes a determination under sub-regulation (2), he shall apply to the Adjudicating Authority for appropriate relief on or before the one hundred and thirtieth day of the insolvency commencement date. (3A) The resolution professional shall forward a copy of the application to the prospective resolution applicant to enable him to consider the same while submitting the resolution plan within the time initially stipulated.
(4) The creditors shall provide to the resolution professional, relevant extract from the audits of the corporate debtor, conducted by the creditors such as stock audit, transaction audit, forensic audit, etc.”
2.3.7 Regulation 40B(1) of the CIRP Regulations provides that the IRP or RP is required to fill form CIRP-6 within seven days of filing application in respect of preferential transaction, undervalued transaction, fraudulent transaction, and extortionate transaction.
2.3.8 Clause 13 of the Code of Conduct provides that:
“13. An insolvency professional must adhere to the time limits prescribed in the Code and the rules, regulations, and guidelines thereunder for insolvency resolution, liquidation or bankruptcy process, as the case may be, and must carefully plan its actions, and promptly communicate with all stakeholders involved for the timely discharge of its duties.”
2.3.9 Given the explanation of Mr. Vineet Aggarwal, DC is inclined to take a lenient view on this count.
3. ORDER
3.1 In view of the forgoing, the DC is of the view that two serious contraventions have established beyond doubt. Firstly his non-cooperation to inspecting and investigating authority is in grave violation of Regulation 4(4), Regulation 4(7), Regulation 8 (4) and Regulation 8(8)of the Inspection and Investigation Regulations; Clause 18 and Clause 19 of the Code of Conduct. Furthermore, authority of the investigation flows from the Code and on any grounds, the insolvency professional is not empowered to withhold relevant information, in case investigation has been launched. Section 218 (1) of the Code stipulates:
“Where the Board, on receipt of a complaint under Section 217 or has reasonable grounds to believe that any insolvency professional agency or insolvency professional or an information utility has contravened any of the provisions of the Code or the rules or regulations made or directions issued by the Board thereunder, it may, at any time by an order in writing, direct any person or persons to act as an investigating authority to conduct an inspection or investigation of the insolvency professional agency or insolvency professional or information utility.”
3.2 From conduct of Mr. Vineet Aggarwal it is clear, he has been intentionally non-cooperative in discharge of his duties as an Insolvency Professional. Such negligent and noncooperative conduct has been proven, even at the stage of personal hearing, where he chose to remain absent despite due opportunity of personal hearing been accorded to him twice. Thus, such intentional reckless conducts warrant stringent punishment.
3.3 Definition of related party as provided in Section 5 (24) (b) includes key managerial personnel of the CD or a relative of a key managerial personnel of the CD. This aspect has been simply overlooked as Mr Vineet Aggarwal failed to file the due disclosures for the same.
3.4 Therefore, the DC, in exercise of the powers conferred under Section 220(2) of the Code read with Regulation 13 of the IBBI (Inspection and Investigation) Regulations, 2017 hereby suspends the registration of Mr. Vineet Aggarwal (Registration No. IBBI/IPA-001/IP-P00475/2017-2018/10818) for a period of two years.
3.5 This Order shall come into force on expiry of 30 days from date of its issue, in view of Para 3.4
3.6 A copy of this order shall be sent to the CoC of all the Corporate Debtors in which Mr. Vineet Aggarwal is providing his services, if any.
3.7 In view of the above Order, a copy of this order shall be forwarded to the Indian Institute of Insolvency Professionals of ICAI where Mr. Vineet Aggarwal is enrolled as a member for their further necessary action.
3.8 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.
3.9 Accordingly, the show cause notice is disposed of.
-sd-
Sudhaker Shukla
Whole Time Member, IBBI
Dated: 14th March 2023
Place: New Delhi
