The Delhi High Court upheld the IBBI's jurisdiction to investigate allegations against the insolvency professional in its recent order.
The Delhi High Court Single-Judge Bench of Justice Sanjeev Narula reviewed a petition and determined that the Disciplinary Committee of the IBBI had jurisdiction to proceed against the Petitioner despite objections regarding the timeliness of the complaint, as allegations of procedural irregularities in the Corporate Insolvency Resolution Process could constitute ongoing causes of action, thus warranting further investigation regardless of the complainant's status as an "aggrieved party".
In the matter before the High Court concerning CM APPL. 47678/2024, the Petitioner sought exemption from submitting certified copies and proper copies of annexures. The Court granted the exemption, subject to all just exceptions, and directed the Petitioner to file clearer and legible copies of the exempted documents before the next hearing, disposing of the application accordingly. In CM APPL. 47679/2024, which sought an exemption from exceeding the page limit for filing the list of dates and synopsis, the Court similarly granted the exemption and disposed of the application.
The Court also addressed CM APPL. 47677, which sought a stay on the impugned order dated July 30, 2024, from the Disciplinary Committee of the Insolvency and Bankruptcy Board of India (IBBI). Senior Counsel Mr. Dayan Krishnan represented the Petitioner, arguing for interim relief based on three jurisdictional objections. He contended that the impugned order failed to consider objections regarding the maintainability of the Show Cause Notice and claimed that the actions of the IBBI, initiated three years after the resolution plan's approval, were time-barred.
The Court found that the allegations against the Petitioner involved serious procedural irregularities during the Corporate Insolvency Resolution Process (CIRP) and that the complaint was not necessarily time-barred, as the nature of the complaints and the ongoing status of the CIRP allowed for further investigation. It noted the IBBI’s broad investigatory powers to uphold the integrity of the insolvency process, irrespective of the complainant's status as an "aggrieved party."
The Court did not agree with the Petitioner’s arguments regarding the constitution of the Disciplinary Committee, finding that the term "whole-time members" could reasonably include a singular member in this context. Ultimately, the Court dismissed the application for interim stay, finding no grounds to warrant such relief at that stage.
The amended writ petition was accepted, and the Court issued notices to the parties involved, setting deadlines for counter-affidavits and a future hearing on November 13, 2024.
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