In the matter of Mr. Yogesh Kumar Gupta, Insolvency Professional (IP) under section 220 of the Insolvency and Bankruptcy Code, 2016 read with regulation 11 of the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016 and Regulation 13 of the IBBI (Inspection and Investigation) Regulations, 2017.
Analysis & Findings of IBBI
1. The Code/Regulations do not envisage the removal of any CoC member on non-payment of CIRP cost. This is a blatant violation of the provisions of the Code and Regulations made therein. If such kind of action is permitted, then RPs would abuse their powers by removing CoC members. Hence, DC finds that Mr. Gupta has violated section 21(2) of the Code.
2. Regulation 34 of the CIRP Regulations states that “The committee shall fix the expenses to be incurred on or by the resolution professional and the expenses shall constitute insolvency resolution process costs.” Explanation provided under Regulation 34 of the CIRP Regulations clarifies that “expenses” includes “other expenses to be incurred by the resolution professional.” Thus, it is clear that RP has to take approval of the CoC for the expenditure incurred to run the CD as a going concern. The contention of the Mr. Gupta in the 9th CoC meeting that he as RP is not required to take approval of the CoC for going concern expenses cannot be sustained. If Mr. Gupta’s stand is to be accepted, it would lead to RP’s spending arbitrary amounts in the name of going concern expenses. The stand taken by Mr. Gupta that he as RP does not need the approval of the CoC, is not only against the provision of Regulation 34 of the CIRP Regulations but also against the spirit of the Code. Hence, the DC finds that Mr. Gupta has violated Regulation 34 of the CIRP Regulations.
Order
It is clear that Mr. Yogesh Kumar Gupta had violated the provisions of the Code and regulations by deciding to remove the CoC members from the list of CoC and revise their voting share on the basis that some CoC members have not contributed to the CIRP cost, and stating before the CoC that no approval is required from the CoC for the going concern expenses. Hence, the DC, in exercise of the powers conferred under section 220 (2) of the Code read Regulation 11 of the IBBI (Insolvency Professionals) Regulations, 2016 and Regulation 13 of the IBBI (Inspection and Investigation) Regulations, 2017 hereby suspends the registration of Mr. Yogesh Kumar Gupta having Registration No. IBBI/IPA-003/IPN00078/2017-18/10701 for a period of three years.
A copy of this order shall be sent to the CoC of Kamrup Housing Projects Private Limited (CD). The CoC of the CD may consider getting an audit of the increased construction cost.
A copy of this order shall be sent to the CoC of all the Corporate Debtors in which Mr. Yogesh Kumar Gupta is providing his services, if any. The CoC may decide whether to continue his services or not. In case, CoC decide to discontinue his services, CoC may file an appropriate application before AA.
