The Insolvency and Bankruptcy Board of India suspended an Insolvency Professional for three years due to wrongful rejection of a confirmed claim and failure to adhere to orders.
IBBI Suspends Insolvency Professional
The Insolvency and Bankruptcy Board of India (IBBI) has imposed a three-year suspension on an Insolvency Professional (IP) following the wrongful rejection of an admitted Corporate Insolvency Resolution Process (CIRP) claim. This decisive action reflects the regulatory body's commitment to uphold the integrity of the insolvency process.
The matter arose when it was found that the IP had not only wrongfully rejected a claim that was previously admitted but also failed to comply with orders issued by the Appellate Authority (AA) and the National Company Law Appellate Tribunal (NCLAT). Such actions are viewed as severe violations of the professional conduct expected from IPs.
The IBBI asserted,
“Non-compliance with legal and regulatory frameworks compromises the efficacy of the insolvency process and threatens stakeholder interests.”
This suspension serves as a critical reminder for insolvency professionals regarding the importance of compliance and the need to uphold the highest standards of conduct. For practitioners in insolvency law, this case highlights the consequences of neglecting compliance with established procedures and regulatory directives.
Citations
- IBBI Order (2026) 1 IBC 100
