Insolvency regulator IBBI has cancelled registration of Vimal Kumar Grover as an insolvency professional (IP) for violation of various provisions of the Insolvency and Bankruptcy Code (IBC).
It has also debarred him from seeking fresh registration as an IP or providing any service under the IBC for a period of one year from December 29.
In its order, the Disciplinary Committee of IBBI has highlighted that when a corporate debtor (CD) fails to service the debt, its control shifts to the creditors, represented by a Committee of Creditors (CoC ) for resolving insolvency. The Code empowers and facilitates the CoC to decide the fate of the CD and consequently of its stakeholders.
The institution of IP is a key facilitator. An IP, who is appointed by the Adjudicating Authority (AA) on the recommendation of the CoC, cannot substitute itself for the CoC. In the present case, Grover has displayed “utter misunderstanding” of the provisions of the Code and regulations made thereunder, the order said. It said that Grover failed to constitute CoC with only one One operational creditor (OC) who filed its claim and thus, deprived the CoC of its right to decide the fate of the CD. He (Grover) himself stepped into the shoes of the CoC and unilaterally decided that no resolution was possible and no loss is caused to anyone. Grover also failed to appreciate the value of time in insolvency proceedings and waited for instructions and advice from IBBI and AA indefinitely, despite clarity of provisions of the Code in that regard, the order added. Therefore, the DC is of the view that Grover failed to act in the best interests of the CD and the creditor, the order added.