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Insolvency regulator IBBI has imposed a monetary penalty on Sandeep Kumar Gupta, an insolvency professional, for not allowing the Committee of Creditors (CoC) to play its rightful role in the corporate insolvency resolution process (CIRP) of Stewarts & Lloyds of India Ltd.
In the case of Stewarts & Lloyds, Gupta deprived the CoC of its right to decide on the fate of the corporate debtor (Stewarts & Lloyds), and thereby pushed the corporate debtor into liquidation, the IBBI’s Disciplinary Committee said in an order.
IBBI’s Disciplinary Committee has now imposed a monetary penalty equal to 100 per cent of the total fee payable to Gupta as an Interim Resolution Professional (IRP) and as Resolution Professional (RP) in the resolution process of Stewarts & Lloyds. Gupta is a member of the ICSI Institute of Insolvency Professionals, an Insolvency Professional Agency (IPA).
This Disciplinary Committee – comprising IBBI Chairman MS Sahoo and Whole-Time Member Mukulita Vijayawargiya – noted that Gupta did not hold a single meeting of the CoC in his term as resolution professional (RP).
The Disciplinary Committee wondered how one could justify that the CoC has no role whatsoever in a CIRP.
“By not allowing and facilitating the CoC to play its rightful role, Gupta has dealt a fatal blow to the basic premise of the code. He also failed to protect the interests of the corporate debtor and creditors and stepped into the shoes of the CoC,” the Disciplinary Committee said.
‘Undertake a course’
While imposing a penalty, the Disciplinary Committee also directed Gupta to undergo the pre-registration educational course from his IPA to improve his understanding of the code and its regulations before accepting any assignment under IBC 2016.
In passing this order, the Disciplinary Committee said it was conscious of the fact that the insolvency regime is new in India and the institution of insolvency profession is new and emerging.
“This CIRP is the very first assignment of Gupta. He has tendered an unconditional apology for all his inadvertent and unintentional errors in his understanding. Further, the role of an IP in India is significantly different from that of matured jurisdictions, particularly in the UK. This may call for some leniency,” the committee said.
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