Insolvency Professional to ensure that his conduct would not undermine the credibility of the process

This judgement concerns Mr. Arun Mohan, an Insolvency Professional (IP), who faced a Show Cause Notice from the Insolvency and Bankruptcy Board of India (IBBI). The notice alleged contraventions of the Insolvency and Bankruptcy Code and related regulations due to his conduct as an interim resolution professional. These allegations stemmed from a First Information Report registered by the CBI and a subsequent judicial remand, following a complaint about a demanded bribe.

INSOLVENCY AND BANKRUPTCY BOARD OF INDIA
(Disciplinary Committee)

01st December, 2020
No. IBBI/DC/48/2020

Order

In the matter of Mr. Arun Mohan, Insolvency Professional (IP) under Regulation 11 of the Insolvency and Bankruptcy Board of India (Insolvency Professional) Regulations, 2016 read with Section 220 of the Insolvency and Bankruptcy Code, 2016 (Code).

Background

1 This Order disposes of the Show Cause Notice (SCN) No. IBBI/IP/SCN/2020/01/850 dated 16th January, 2020 issued to Mr. Arun Mohan, C - 356, Lohia Nagar, Near Guru Nanak School, Ghaziabad, Uttar Pradesh, 201001 who is a Professional Member of the ICSI Institute of Insolvency Professionals (IPA) and an Insolvency Professional (IP) registered with the Insolvency and Bankruptcy Board of India (IBBI) with Registration No. IBBI/IPA- 002/IP-N00740/2018-2019/12349.

1.1 In exercise of its power under section 218 of the Code read with the IBBI (Insolvency Professional) Regulations, 2016, the IBBI has taken on record the First Information Report (bearing FIR Number - RC-DAI-2020-A-0001) registered on 11th January, 2020 with Central Bureau of Investigation (CBI), Anti-Corruption Bureau (ACB), New Delhi; the Order of Special Judge (PC Act), CBI-13, Rouse Avenue District Court, New Delhi dated 14th January, 2020 whereby the Court remanded Mr. Mohan to judicial custody until 28th January, 2020; and the SCN issued to My. Mohan on 15th January, 2020 by his IPA.

1.2 The IBBI on 16th January, 2020 had issued the SCN to Mr. Arun Mohan, based on examination of available documentary evidence in respect of his role as interim resolution professional (IRP)/ resolution professional (RP) in the corporate insolvency resolution process (CIRP) of FR Tech Innovations Private Limited (CD). The SCN alleged contraventions of provisions of section 208(2)(a) of the Insolvency and Bankruptcy Code, 2016 (Code), Regulation 7(2)(a), (b), (f), (h) and (i) of the IBBI (Insolvency Professionals) Regulations, 2016 (IP Regulations) and clauses 1,2,3,5,9,12,14,17,24 and 28 of the Code of Conduct under regulation 7(2) thereof. Mr. Arun Mohan replied to the SCN vide letter dated 6th February 2020 and also submitted additional reply vide letter dated 15th July 2020 and 13th August 2020.

1.3 The IBBI referred the SCN, response of Mr. Arun Mohan to the SCN, additional reply vide letter dated 15th July 2020 and 13th August 2020 and other material available on record to the Disciplinary Committee (DC) for disposal of the SCN in accordance with the Code and Regulations made thereunder. Mr. Arun Mohan availed an opportunity of personal hearing (e-mode) before the DC on 17th August 2020 and sought permission to be represented by his counsel, Mr. K. S. Negi.

Show Cause Notice

2 The DC notes from the SCN the contraventions alleged therein as follows:

2.1 The Hon‟ble National Company Law Tribunal (AA) Mumbai, vide order dated 14th November, 2019 admitted an application under Section 7 of the Code in the matter of FR Tech Innovations Private Limited, the CD for CIRP and appointed Mr. Arun as an IRP.

2.2 A complaint against Mr. Arun Mohan was filed by Mr. Nishant Bugalia (complainant) on 10.01.2020 with the SP, CBI (ACB), New Delhi alleging that he has demanded a bribe from the complainant in connection with the claim submitted in the matter of CIRP of CD.

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