Case Note & Summary
The dispute arose from the suspension of the appellant, a resolution professional, by the Insolvency and Bankruptcy Board of India (IBBI) following disciplinary proceedings. The IBBI's action was challenged in this appeal, where the appellant contended that the IBBI could only remove him from a specific assignment related to the disciplinary action and not suspend him from all assignments. The Adjudicating Authority had previously removed the appellant from a particular Corporate Insolvency Resolution Process (CIRP) and directed him to refund his remuneration, which was stayed by the tribunal. The appellant argued that the IBBI's jurisdiction under Section 220(7) of the Insolvency and Bankruptcy Code (IBC) was broad and comparable to that of a first appellate court, allowing for a comprehensive review of facts. In contrast, the IBBI's counsel maintained that the board acted as a regulator with defined roles and that its disciplinary actions were not to be easily interfered with. The tribunal noted the importance of the Committee of Creditors (CoC) in overseeing resolution professionals and emphasized that the IBBI should not supersede the CoC's authority without proper justification. Ultimately, the tribunal found that the IBBI's blanket suspension of the appellant from all assignments was excessive and violated principles of due process, leading to the suspension of the IBBI's order regarding other assignments while allowing the CoC to make decisions on the appellant's role in their respective cases.
Headnote
A) Insolvency Law - Authority of IBBI - Scope of Jurisdiction - Insolvency and Bankruptcy Code, 2016, Section 220(7) - The tribunal examined the extent of authority of the IBBI to suspend a resolution professional from all assignments based on disciplinary action in one case, concluding that such a broad suspension may contravene the rights of the resolution professional without due process. Held that the IBBI overstepped its authority by imposing a blanket suspension without hearing the appellant in all assignments (Paras 9-17).
Issue of Consideration
Whether the IBBI has the authority to suspend a resolution professional from all assignments based on disciplinary proceedings in one assignment.
Final Decision
The tribunal suspended the IBBI's order of suspension regarding other assignments, allowing the appellant to continue as a resolution professional in those cases. The IBBI was directed to communicate the impugned order to the respective CoCs, who would decide on the appellant's role moving forward.
Law Points
- jurisdiction of IBBI
- disciplinary proceedings
- resolution professional
- Code of Insolvency and Bankruptcy
- statutory authority
- appellate jurisdiction
Case Details
2026 LawText (NCLAT) (07) 15
I.A. No. 4537 of 2026 in Company Appeal (AT) (Ins) No. 1165 of 2026
Justice N. Seshasayee, Barun Mitra
Mr. Harshit Khare, Mr. Prafful Saini, Mr. Ayuj Agrawal, Mr. Brijesh Gupta, Mr. Naveen Pawan, Mr. Ashish Verma, Mr. Nikhil Thuhor, Mrs. Kriti, Mr. Rafid Akhtar, Mr. Gaurav Mitra, Mr. Asav Rajan, Mr. Kashish Chadha, Mr. Aditya Shah
Insolvency and Bankruptcy Board of India
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Nature of Litigation
Challenge to the suspension of a resolution professional by the IBBI.
Remedy Sought
The appellant sought to suspend the IBBI's order of suspension regarding other assignments.
Filing Reason
The appellant contested the IBBI's authority to impose a blanket suspension without a hearing.
Previous Decisions
The Adjudicating Authority had previously removed the appellant from a specific CIRP and directed a refund of remuneration.
Issues
Whether the IBBI has the authority to suspend a resolution professional from all assignments based on disciplinary proceedings in one assignment.
The extent of jurisdiction of the tribunal under Section 220(7) of the IBC.
Submissions/Arguments
The appellant argued that the IBBI's jurisdiction under Section 220(7) is broad and allows for comprehensive review.
The IBBI contended that its role as a regulator should not be easily interfered with and that disciplinary actions are based on thorough investigations.
Ratio Decidendi
The tribunal held that the IBBI overstepped its authority by imposing a blanket suspension on the resolution professional without due process, emphasizing the need for proportionality and fair hearing in disciplinary actions.
Judgment Excerpts
The appellant herein is a resolution professional, whose registration has been suspended by the IBBI for three years.
The appellant raises an issue on the extent of jurisdiction IBBI has.
The tribunal examined the extent of authority of the IBBI to suspend a resolution professional from all assignments based on disciplinary action in one case.
The impugned proceeding only records the charge of a particular CIRP where the appellant was said to have failed in constituting a CoC for about two years.
We find that the appellant has made a strong prima facie case, that balance of convenience is in his favour.
Procedural History
The appellant's registration was suspended by the IBBI following disciplinary proceedings. The Adjudicating Authority had previously removed the appellant from a specific CIRP and directed a refund of remuneration, which was stayed by the tribunal. The current appeal was filed against the IBBI's order of suspension.
Acts & Sections
- Insolvency and Bankruptcy Code, 2016: Section 220, Section 218, Section 219, Section 22, Section 27, Section 241
