IBBI levies penalty on insolvency professional for wrong interpretation of IBC provisions
The Insolvency and Bankruptcy Board of India (IBBI) has imposed a penalty of Rs. 1 lakh on insolvency professional Vishal Pawankumar Bidawatjika for wrongly interpreting the provisions of the Insolvency and Bankruptcy Code (IBC).
The IBBI found that Bidawatjika had erroneously taken a view that the period of first six months, for the calculation of his fees, would commence from the date of realisation of the assets. This was in violation of Regulation 4 of the IBBI (Liquidation Regulations), 2016, which states that the period of first six months shall commence from the date of appointment of the liquidator.
Bidawatjika has admitted his mistake and has apologized for the same. He has also assured that he will strictly comply with the provisions of the IBC and regulations made thereunder in all his future endeavours.
The IBBI has warned Bidawatjika to be more careful and diligent in the future. It has also directed him to deposit the penalty amount directly to the Consolidated Fund of India (CFI) within 45 days from the date of issue of the order.
The case relates to corporate insolvency resolution process (CIRP) of three companies — Bluplast Industries Limited, Anil Printers Limited and Today’s Writing Instruments Limited.
The insolvency petition against Bluplast Industries Ltd was admitted by the NCLT under Section 7 of the IBC though an order dated 5 October 2017. Vishal Pawankumar Bidawatjika was appointed as Interim Resolution Professional (IRP) in the case and was later appointed as Resolution Professional (RP) after the first CoC meeting on 10 November 2017.
The AA through its order dated 10 August 2018 passed an order for Liquidation of Bluplast Industries and appointed Bidawatjika as Liquidator in the said matter.
The AA had admitted the application under Section 7 of the Code for CIRP of Anil Printers Limited (CD-2) vide order dated 06 May 2019 and Bidawatjika was appointed as IRP, and later was confirmed as the RP. The NCLT passed an order for liquidation of Anil Printers on 15 October 2019 and Bidawatjika was appointed as Liquidator.
The National Company Law Tribunal, Ahmedabad had admitted the application under Section 9 of the Code for CIRP of Today’s Writing Instruments Limited (CD-3) on 05 October 2017 and appointed. Navnit Lal Bhatia as IRP vide the same order. The NCLT, Ahmedabad, ordered for Liquidation of Today’s Writing Instruments on 30 November 2018, and appointed Bidawatjika as Liquidator in the Liquidation process.
The IBBI’s action to impose a penalty is in line with its efforts to maintain high standards of professional conduct among insolvency professionals.
Also See: Resolution professional Poonam Basak suspended for 3 years for undermining CIRP of Kings Electronics
