The Gujarat High Court has stayed the Order passed by the Insolvency and Bankruptcy Board of India whereby the license of an Insolvency professional was suspended owing to alleged procedural irregularities.

The bench of Justice Vaibhavi D. Nanavati stayed the Order of the Board after noting that the coram which passed the impugned order comprised of only a single member.

“Considering the aforesaid submissions advanced by Mr. Kavina, the learned Senior Counsel and considering the order passed in the Special Civil Application No.13767 of 2022 dated 20.7.2022, the order impugned dated 23.3.2023 vide No.IBBI/DC/156/2023 (Annexure-A) is stayed till next returnable date.”, the Court directed.

In this case, the petitioner who is a CA and an Insolvency professional had approached the High Court challenging the Order passed by the Insolvency and Bankruptcy Board of India alleging breach of various sections of IBC and regulations by the petitioner thereby suspending petitioner's license to practice.

The Petitioner submitted that the coram of the disciplinary committee of the board in the present case was "coram non judice". It was further submitted that the single whole-time member of the board constituting the disciplinary committee was "coram non judice" in the present case since the coram of the disciplinary committee must be constituted having at least two members.

Senior Advocate Percy C. Kavina argued that the impugned order is signed by one member only which is against the provisions of Section 220(1) of the Insolvency and Bankruptcy Code, 2016.

As per Section 220(1) of the IBC 2016- the Board shall constitute a disciplinary committee to consider the reports of the investigating Authority submitted under sub-section (6) of section 218: Provided that the members of the disciplinary committee shall consist of whole-time members of the Board only

The Counsel for the petitioner contended that the said provision clearly stipulates the Disciplinary Committee shall consist of “whole time members” and that it could be construed as comprising of at least “two whole-time members” whereas in the facts of the present case the coram comprised of a single member.

The Court while issuing notice in the plea stayed the impugned Order.

Cause Title- Bhupendra Singh Rajput v. Insolvency And Bankruptcy Board Of India (IBBI)

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Gujarat High CourtJustice Vaibhavi D. Nanavati

Ashish Shaji