Sachin Naveen Sinha Erstwhile Interim ... vs Insolvency And Bankruptcy Board Of ...

Sachin Naveen Sinha ...Appellant Erstwhile Interim Resolution Professional

Vs

The Insolvency and Bankruptcy Board of India ...Respondent Through its Chairperson

For Appellant: Mr. Harshit Khare, Mr. Prafful Saini, Mr. Ayuj Agrawal, Mr. Brijesh Gupta, Advocates

For Respondent: Mr. Naveen Pawan, Sr. Advocate with Mr. Ashish Verma, Mr. Nikhil Thuhor, Mrs. Kriti, Mr. Rafid Akhtar, Advocates Mr. Gaurav Mitra, Sr. Advocate with Mr. Asav Rajan, Mr. Kashish Chadha, Mr. Aditya Shah, Advocates

JUDGEMENT

Per Justice N. Seshasayee, Member (Judicial)

The appellant herein is a resolution professional, whose registration has been

suspended by the IBBI for three years vide its proceeding dated, 08.06.2026,

following a disciplinary proceeding it had initiated against it. This is now

under challenge in this appeal.

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2. Earlier, the Adjudicating Authority vide its Order dated 26.09.2025, in

I.A.382/2025 in C.P.(IB) 63/9/JPR/2020 had removed the appellant as a

resolution professional in a certain CIRP and also directed him to refund ₹.2.0

lakhs he had received as his initial remuneration besides recommending a

disciplinary action against him by the IBBI. This Order of the Adjudicating

Authority was challenged in C.A.1609 of 2025, wherein this tribunal has passed

an interim Order of stay of the direction to return ₹.2.0 lakh.

3. Besides the CIRP from which the appellant was removed, there were three

other CIRP in which the appellant has been appointed as a resolution professional.

Now, by virtue of the Order impugned in this appeal, IBBI has removed him as

the resolution professional. This Order of suspension was to take effect from

08.07.2026. The appellant's core contention is that, the IBBI, in exercise of its

disciplinary jurisdiction, has the authority to remove a resolution professional

only from a particular assignment in relation to which it had initiated a

disciplinary proceeding against the resolution professional, and cannot ban him

from functioning as a resolution professional with regard to others. Clearly, the

appellant raises an issue on the extent of jurisdiction IBBI has.

4. Appeal against any decision made by the Disciplinary Committee of the

IBBI, hitherto was only subjected to a juridical review of the statutory action of

a statutory authority under Article 226 of the Constitution before the High Courts.

However, vide IBC (Amendment) Act 6 of 2026, which came into effect on 3

22.05.2026, Parliament has vested first appellate jurisdiction on this tribunal vide

the newly introduced Sec.220(7) IBC. It reads:

"Any person aggrieved by an Order of the disciplinary committee, under sub-section (2) to (5), may prefer an appeal to the National Company Law Appellate Tribunal within a period of thirty days from the date of receipt of the order."

The provision, ex facie, does not limit the extent of jurisdiction which this tribunal

may exercise. In other words, the provision tends to indicate that the jurisdiction

of this tribunal is not limited to a mere examination of procedural compliance and

processual fairness required of a legally sustainable disciplinary proceeding, but

appears to enable a re-appraisal of the facts of such proceeding. However, the

learned senior counsel for the IBBI differed on this point. This invited an

argument on an interpretation of Sec.220(7) of the Code for its most probable

understanding. This became critical in the context of the relief sought in I.A.4537

of 2026, which the appellant has filed for staying the operation of the impugned

Order since it requires us to ascertain the extent of authority this tribunal may

have to interfere with the extent of penal powers which the IBBI has assumed.

5. Besides the counsel for the parties hereto, we also had the advantage of

hearing the arguments of Shri. Krishnendu Datta and Shri. Abhijit Sinha, both

senior counsel, who have a similar matter before us and are waiting for their turn.

And, they supported the contention of the appellant's counsel. 4

Arguments

6. As outlined earlier the appellant argued that the extent of authority vested

in this tribunal under Sec.220(7) of the Code is unbridled and is comparable to

the jurisdiction which a first appellate court has under Sec.96 CPC - unlimited at

the point of scrutiny and unrestricted at the point of interference. The line of

interpretation adopted is:

a) Sec.220(7), on its face, does not have a limiting factor in defining the extent

of jurisdiction of the tribunal. Indeed, the report of the BLRC, published

on 15th November, 2015 (before the IBC was launched), states: "The

Committee recognises that actions taken by regulators can impose

significant penalties and burden on regulated entities. Therefore, the rule

of law requires that a clear judicial process be available to persons who

seek to challenge regulatory actions." The report of the Select Committee

on IBC (Amendment) Bill, 2025, in paragraph 62.5.1(i) records the written

replies received by it from the Ministry which reads: "The proposed

amendments to section 220 address the concern about proportional and

fair penalties" and that ".. the amendments aim to ensure fairness,

transparency, and appropriate safeguards against excessive punishment

for minor lapses." The report of the Select Committee thereafter proceeds

to record its recommendations, and in paragraph 62.6.2 it concludes:

"Upon examination and after considering the view of the Ministry and 5

stakeholders, the Committee observe that the amendments proposed in

clause 62 are necessary to ensure fairness and proportionality in

disciplinary actions and to enhance the overall regulatory effectiveness.

Therefore, the Committee accept the Clause 62 as proposed without any

modification." Set in the context, Sec.220(7) can only be termed as the

legislative expression of the views of the BLRC and the Select Committee

of the Parliament. This cannot be overlooked.

b) Under the Scheme of IBC, a resolution professional is appointed by the

Adjudicating Authority on the recommendation of the CoC. A CIRP is

CoC centric, and only the CoC oversees the quality of performance of a

resolution professional closely, and if it is dissatisfied with the functioning

of a resolution professional then it has all the authority vested in it under

Sec.27 of the Code to replace him. The IBBI, therefore, cannot supersede

the statutory authority of the CoC in banning a resolution professional

when the CoC in a particular CIRP is not unhappy with his performance.

This idea is captured in Regulation 13(7) of the IBBI (Inspection and

Investigation) Regulations, 2017. It reads:

"Regulation 13(7): In case where the service provider is an insolvency professional, the Board shall intimate the order to all the members of committee of creditors of the insolvency resolution process in which he is acting as an interim resolution professional or resolution professional, as the case may be, and to the Adjudicating Authority."

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The IBBI, which framed the Regulation, is conscious of the statutory

scheme of the Code and hence has consciously avoided interfering with the

sphere of action and activity of the CoC. This would necessarily mean that

the legislative intent behind these Regulations cannot be ignored when this

tribunal exercises its jurisdiction, and this is possible only if there is no

limiting factor, not found in Sec.220(7), is not read into it.

c) The Code, when it intended to restrict or limit the scope and extent of the

appellate jurisdiction has unhesitantly done it. Examples of the same can

be found in Sec.61(1) which does not have any limiting factor, whereas in

Sec.61(3), which concerns a challenge to a resolution plan, the Code has

limited the scope of appellate jurisdiction as it limited the grounds on

which a challenge under Sec.61(3) could be made. So also Sec.62 which

deals with the second appeal that may be preferred to the Hon'ble Supreme

Court. Therefore, if only the legislature has intended not to vest absolute

power to the appellate tribunal under Sec.220(7), it would have limited it.

The bottomline is, where Sec.220(7) does not have a limiting clause on the

extent of authority this tribunal has, it should not be read into it.

7. Per contra, the learned counsel for the IBBI contended, that the role of

the IBBI is that of a regulator and has its defined role as an expert body in

regulating the course of working of the Code and that may not be easily

interfered with. He explained:

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a) A disciplinary action is not initiated without application of mind.

Sec.218 of the Code provides that when a complaint is received against

a service provider (prior to 2026 amendment, it was 'insolvency

professional agency or information utility') alleging contravention of any

of the provisions of the Code, or the rules, or regulations or directions

made thereunder, then IBBI can hold an inspection or investigation.

And, only after ascertaining the existence of prima facie case of

contravention of the Code or Regulations etc., it issues a show cause

notice as provided for in Sec.219 of the Code and invites a reply to it.

Then commences the job of the Disciplinary Committee. In terms of

Sec.220(2), its powers are absolute:

"Where the disciplinary committee, after giving the service provider an opportunity of being heard, is satisfied that sufficient cause exists, it may impose a penalty as provided in sub-section (3) or suspend or cancel the registration of the service provider, or direct disgorgement under sub-section (4)"

Inasmuch as IBBI is an expert body, its perception and understanding of

the breach of the Code or the Regulation etc., and the ramification it may

have needs to be respected. Therefore, notwithstanding the fact that

Sec.220(7) may not have an apparent factor limiting the jurisdiction of this

tribunal, in understanding its true import and reach, the contextual setting

in which it is required to operate cannot be ignored.

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b) The Hon'ble Supreme Court has always respected the role of a regulator as

an expert, and why it functions as an expert should be kept beyond the

judicial scrutiny. Reliance was placed on the ratio in Vishal Tiwari Vs UoI

and others [(2024) 4 SCC 115]. Indeed, in Apex Heights Pvt. Ltd., Vs

Ram Kishore Arora & another [I.A.107113 /2026, in C.A.2626 of 2025,

dated 10.04.2026], the Supreme Court has gone to the extent of declaring

that propriety requires that a resolution professional withdrew from his

responsibility when he faces the ire of the disciplinary committee till he is

cleared. The IBBI sets the standard necessary for achieving the objectives

of the Code, and hence this tribunal, may not sit on the lap of the Board

and remote control what it is required to do while sitting to judicially

review the decision of the Board in an appeal. Reliance was also placed

on the ratio in Chairman, SEBI Vs Shriram Mutual Fund & another

[(2006) 5 SCC 361]. Therefore, when the Disciplinary Committee

concludes that a certain service provider, which includes a resolution

professional deserves to be barred from functioning as one, then while

exercising its appellate jurisdiction under Sec.220(7) of the Code, should

be less enthusiastic in subjecting the judgement of the disciplinary

committee to judicial scrutiny, lest, an expert body may not be able to play

the role expected of it.

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c) When the registration of a resolution professional is suspended, it operates

vis-à-vis all his assignments and not selectively. It is akin to a suspension

of sanad of an Advocate.

8. In response the learned counsel for the appellant argued that, no parallel

can be drawn as between the suspension of registration of a resolution

professional and suspension of sanad of an Advocate. What it fails to negotiate

is the effect of Sections. 22, 27 and Regulation 13(7) of IBBI (Inspection &

Investigation) Regulation. So far as the ratio of Vishal Tiwari case goes, there

the challenge was to a certain regulation as framed by an expert body under

Article 32 of the Constitution and not what flowed from its operation. In the

present case, no statutory provision or rules are challenged, but what is purported

to have been done pursuant thereto. So far as Apex Heights Case goes, on facts

the corporate debtor had undertaken multiple projects, and the Supreme Court has

desisted the resolution professional from associating himself from all the projects

of the same corporate debtor till his name is cleared, and not from every

assignment in which the resolution professional is appointed as such.

Discussion & Decision

9. The issue in relation to which a decision is required to be made falls within

a very narrow space: inasmuch as the impugned proceeding of the IBBI has

barred the appellant from associating with every assignment he is entrusted with,

should the suspension of the resolution professional, which has taken effect 10

during the hearing on this application, should be suspended. So far as the

particular CIRP in which he has been replaced, the dispute raised can be probed

separately when the main appeal is taken up for hearing.

10. As we consider the submissions made at the bar on the scope of jurisdiction

which we may exercise under Sec.220(7) of the Code, two aspects stood out: (a)

the defined role of CoC in appointing and replacing a resolution professional vis-

à-vis the authority of the IBBI under Sec.220; and (b) the extent of authority

which IBBI claims to supersede the authority of CoC in replacing a resolution

professional. While it requires greater and deeper examination, we may still make

a prima facie statement on it.

11. Has the CoC any authority to appoint a resolution professional or replace

him if his registration is not subsisting? Indeed, Sec.22(4) mandates that when

the CoC recommends an individual for him to be appointed by the Adjudicating

Authority as a resolution professional, the latter is required to obtain the

confirmation of the IBBI. This perhaps is to ascertain if the one who is proposed

to be appointed as a resolution professional is not disqualified to be so appointed.

What other purpose can it serve? Indeed, a similar provision is made when an

IRP is appointed as could be seen in Sec.16(2) and (3), and also under Sec.27(4)

when the resolution professional is sought to be replaced. In other words, no CoC

has the authority to insist in appointing the one whose nomination is not approved

by the IBBI.

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12. The issue, however, is not about the appointment made at the first instance

under Sec.22, or replacement of the resolution professional under Sec.27, but the

extent of authority of the IBBI has to suspend a resolution professional from

acting as such in every assignment without the CoC of each of those assignment

joining the issue on a finding of professional misconduct of a resolution

professional in one. If we hold it in the affirmative then it renders Regulation

13(7) of the IBBI (Inspection and Investigation) Regulation redundant or otiose.

After all, in terms of Sec.241 of the Code, every Regulation, for framing which

the Board has authority under Sec.240, is required to be placed before the

Parliament while in session, and becomes operational subject to the authority of

the Parliament to modify them. Can therefore a Regulation, which in the instant

case is Regulation 13(7), which has passed the legislative process as envisaged

under Sec.241, be allowed to be diluted under the weight of authority which the

IBBI claims under Sec.220(2)?

13. Existence of authority must be distinguished from its exercise. A Regulator

may have been vested with the power of a giant, but is it necessary for it to act as

a giant? Who will check if it is arbitrarily exercised? Statutorily, Regulation

13(7) steps in which has required the IBBI, which itself is a creation of the statute,

only to inform the CoCs of other assignments where the same resolution

professional who has been indicted by the Board, for them to take appropriate

decision. This has at least three advantages: (a) first, it ensures rule of 12

proportionality when it indicates that no resolution professional be penalised

more than the extent required to, and to arrest excessive reaction and response

from the Board to an allegation of misconduct in a particular assignment; (b)

secondly, it balances the statutory authority of CoC to replace a resolution

professional with the authority of the IBBI to discipline a resolution professional;

and (c) thirdly, it upholds the eternal doctrine in administrative law, or even in

common law, that no right be banished without a hearing those who are likely to

be affected thereby. In our considered opinion, where these aspects come under

a cloud, then judicial review under Sec.220(7) cannot sidestep them.

14. So far as the reach of the proceedings of the IBBI now impugned before us

goes, it attempts to bar the appellant from acting as a resolution professional in

every case in which he is appointed, but was he heard on his conduct in every

assignment? The impugned proceeding only records the charge of a particular

CIRP where the appellant was said to have failed in constituting a CoC for about

two years when the corporate debtor has a secured financial creditor in SBI, but

then it is a specific allegation in a particular CIRP, with no reference to other

CIRPs where the appellant is functioning as a resolution professional. When one

who is entitled to be heard but penalised without a hearing, our conscience

instantly gets disturbed. It is not therefore, about the existence of authority or its

extent which IBBI claims under Sec.220(2) of the Code but how it purports to 13

exercise it. Does not the act of the IBBI contravene Sec.218 and 291 of the Code?

There is a world of difference between a rule and the way a rule-book is handled.

15. We, therefore, have little hesitation in holding that the Board has over

stepped. So far as the extent of authority we have - whether the tribunal has the

power of a civil court to examine and re-appreciate the facts as the Authority of

the first instance a la the power of the civil court under Sec.96 CPC, though a

prima facie view suggests a possibility, a final opinion can be made only when

the main appeal is taken up for consideration. Or may be in a situation, where

the proceeding suspending the registration of the resolution professional in the

particular CIRP in which he is so penalised comes up for consideration.

16. We may record now that a third party has filed I.A.4610 of 2026 to

intervene in the matter to oppose why it may not be desirable to let the appellant

continue as a resolution professional in other assignments as well, and also placed

materials before us to justify the same. We take note of them, but underscore that

we may not be able to act on them, as we are certain that the rule of audi alteram

partem is sacrosanct in our jurisprudence, and no matter how high the nature of

authority vested in an Authority, the doctrine emphasising the right of hearing

should not be violated. The appellant therefore, cannot be banished without a

hearing on the materials so placed. The proposed intervener however, is free to

move the IBBI under Sec.218(1) of the Code, if he is so desirous. 14

17. To conclude, we find that the appellant has made a strong prima facie case,

that balance of convenience is in his favour and that irreparable injury will be

caused if appellant is barred from associating with other assignments other

than the one in which the Adjudicating Authority has removed him and

recommended a disciplinary action against him. We accordingly suspend the

Order of suspension imposed on the appellant with regard to other assignments

in which the appellant is appointed as a resolution professional. The IBBI

however, may communicate the impugned order to the other CoC of such other

assignments, and once done, it is for the respective CoC to take a call on its

preference for the appellant as a resolution professional. No costs.

[Justice N. Seshasayee] Member (Judicial)

[Barun Mitra] Member (Technical) rs/beena