The Hon’ble High Court of Delhi vide order dated 29.06.2020, stayed an order passed by the Insolvency and Bankruptcy Board of India (IBBI) imposing penalty on an Insolvency Professional who had allegedly gone against the terms of the moratorium.
The present order was passed in response to a writ petition (W.P.(C) 3692/2020) filed by one Mr. Mohan Lal Jain, challenging the decision of the IBBI wherein a penalty was imposed on him for alleged violations of the Insolvency and Bankruptcy Code, 2016 while performing his duties as an Insolvency Professional for Mack Soft Tech Private Limited. An Insolvency Resolution was initiated against the said company on 11.08.2017.
The Petitioner was accused of allowing some amount to flow out to a debtor i.e. Respondent No.2, and thereby violating the provisions of the Insolvency and Bankruptcy Code 2016.
As per the Petitioner, he was appointed as the Insolvency Professional only on 31.01.2018 and had not violated any such provisions inasmuch as the monies were remitted from the escrow account maintained by HDFC Bank and held that the monies lying in the escrow account could not be under the control of the Insolvency Professional.
Further highlighting similar circumstances wherein Insolvency Professionals (IPs) were let off by the Insolvency and Bankruptcy Board of India (IBBI) with warnings, the Petitioner contended that he had merely followed the past decisions taken by previous Insolvency Professionals and Committee of Creditors and that a disproportionate penalty had been imposed upon him by the IBBI.
After taking note of the merits of the present matter, Justice A.K Chawla, stayed the penalty imposed on the Petitioner subject to the Petitioner depositing within 10 days from the date of order, a sum of Rs.25,00,000/- (Rupees Twenty Five Lakhs Only/) with the Insolvency and Bankruptcy Board of India.
Directing the Petitioner to pay the said amount, the Hon’ble High Court further stated as follows, “The amount so deposited by the petitioner shall be kept in fixed deposit with a nationalized bank earning maximum interest for an initial period of one year. Such deposit would be disbursable subject to any further orders that may be passed by the Court.”
Order:Mohan Lal Jain Vs IBBI