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Suspension of Insolvency Professional’s AFA Doesn’t Affect Ongoing Assignments: Delhi High Court

Delhi High Court held that the suspension of an Insolvency Professional’s Authorisation for Assignment (AFA) does not affect ongoing assignments and only restricts the professional from taking up new ones.


The Delhi High Court, Single-Judge Bench of Justice Sachin Datta, reviewed a petition and held that the suspension of an Insolvency Professional’s Authorization for Assignment (AFA) pursuant to disciplinary proceedings does not preclude the professional from continuing with existing assignments; it only restricts the acceptance of new assignments, as clarified by the IBBI and in alignment with the Bombay High Court’s ruling in Kairav Anil Trivedi v. IBBI & Ors.


The petitioner had filed the writ petition challenging a communication dated 30.01.2025 issued by the Insolvency and Bankruptcy Board of India (IBBI), whereby disciplinary proceedings under Section 219 of the Insolvency and Bankruptcy Code, 2016 read with Regulations 10A, 11, and 12 of the IBBI (Inspection and Investigation) Regulations, 2017 were initiated against the petitioner, a Resolution Professional (RP). In the said communication, IBBI had also ordered the suspension of the Authorisation for Assignment (AFA) granted to the petitioner.


The petitioner contended that the suspension of the AFA did not disqualify or restrict him from continuing his existing assignment as the RP in the Corporate Insolvency Resolution Process (CIRP) of the corporate debtor. It was argued that such suspension only restricted the RP from accepting new assignments. To substantiate this position, the petitioner relied upon the Division Bench judgment of the Bombay High Court in Kairav Anil Trivedi v. Insolvency and Bankruptcy Board of India (IBBI) and Others, REEDLAW 2024 Bom 08561, particularly paragraph 14 of the said decision.


When the matter was initially heard, the learned counsel for IBBI sought time to obtain instructions. Upon resumption of the hearing, counsel for IBBI submitted that, consistent with the Bombay High Court’s view, the order dated 30.01.2025 merely precluded the petitioner from accepting any new assignments and did not restrict him from continuing with any ongoing assignment. The Court recorded this statement.


In light of this clarification, the petitioner’s counsel chose not to press the petition. Consequently, the petition was dismissed as withdrawn. Furthermore, since the main petition stood withdrawn, intervention applications filed by third parties were also disposed of as infructuous.


Mr. Yadunath Bhargava, Mr. Akshay Chandra and Mr. Vishal Tanwar, Advocates, represented the Petitioner.


Mr. Apoorv Khator, Advocate, appeared for the Respondent No. 1.


Ms. Misha and Ms. Gayathri Balasubramanian, Advocates, appeared for the Respondent No. 2.


Mr. Jishnu Chowdhary, Sr. Adv. along with Mr. Vikram Wadhera, Ms. Smriti Churiwal and Mr. Jaiveer Kant, Advocates, appeared for the Respondent No. 3.


Mr. Ashish Dholakia, Sr. Adv. and Ms. Akshra Arshi, Advocate, appeared for the intervenor/AGI Greenpac.


Mr. Chawla and Mr. Bhagat Garg, Advocates, appeared for the intervenor/Exclusive Capital Limited.

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