(1) The to consider the reports of the investigating Authority submitted under sub-section (6) of section 218:
Provided that the members of the disciplinary committee shall consist of whole-time members of the Board only.
(2) On the examination of the , if the disciplinary committee is satisfied that sufficient cause exists, it may impose penalty as specified in sub-section (3) or suspend or cancel the registration of the insolvency professional or, suspend or cancel the registration of insolvency professional agency or information utility as the case may be.
(3) Where any insolvency professional agency or insolvency professional or an information utility has contravened any provision of this Code or rules or regulations made thereunder, the disciplinary committee may impose penalty which shall be—
(i) three times the amount of the loss caused, or likely to have been caused, to persons concerned on account of such contravention; or
(ii) three times the amount of the unlawful gain made on account of such contravention, whichever is higher:
Provided that where such loss or unlawful gain is not quantifiable, the total amount of the penalty imposed shall not exceed more than one crore rupees.
(4) Notwithstanding anything contained in sub-section (3), the any person who has made unlawful gain or averted loss by indulging in any activity in contravention of this Code, or the rules or regulations made thereunder, to disgorge an amount equivalent to such unlawful gain or aversion of loss.
(5) The Board may take such action as may be required to provide restitution to the person who suffered loss on account of any contravention from the amount so disgorged, if the person who suffered such loss is identifiable and the loss so suffered is directly attributable to such person.
(6) The Board may make regulations to specify—
(a) the procedure for claiming restitution under sub-section (5);
(b) the period within which such restitution may be claimed; and
(c) the manner in which restitution of amount may be made.
2.1.8:Insolvency and Bankruptcy Board of India (Insolvency Professional Agencies) Regulations, 2016.
Disciplinary proceedings.
(1) Based on the findings of an inspection or investigation, or on material otherwise available on record, if the Board is of the prima facie opinion that sufficient cause exists to take actions permissible under section 220, it shall issue a show-cause notice to the insolvency professional agency.
(2) The show-cause notice shall be in writing, and shall state-
(a) the provisions of the Code under which it has been issued;
(b) the details of the alleged facts;
(c) the details of the evidence in support of the alleged facts;
(d) the provisions of the Code, rules, regulations or guidelines thereunder allegedly violated, or the manner in which the public interest is allegedly affected;
(e) the actions or directions that the Board proposes to take or issue if the allegations are established;
(f) the manner in which the insolvency professional agency is required to respond to the show-cause notice;
(g) consequences of failure to respond to the show-cause notice; and
(h) procedure to be followed for disposal of the show-cause notice.
(3) The show- cause notice shall enclose copies of relevant documents and extracts of relevant portions from the report of investigation or inspection, or other records.
(4) A show-cause notice issued shall be served on the insolvency professional agency in the following manner-
(a) by sending it to the insolvency professional agency at its the registered office, by registered post with acknowledgement due; or
(b) by an appropriate electronic means to the email address provided by the insolvency professional agency to the Board.
(5) The Board shall constitute a Disciplinary Committee for disposal of the show- cause notice.
(6) The Disciplinary Committee shall dispose of the show-cause notice assigned under (5) by a reasoned order in adherence to principles of natural justice.
(7) The Disciplinary Committee shall endeavour to dispose of the show-cause notice within a period of six months of the assignment.
(8) The Disciplinary Committee shall consider the submissions, if any, made by the insolvency professional agency.
(9) After considering the relevant material facts and circumstances and material on record, the Disciplinary Committee shall dispose of the show-cause notice by a reasoned order.
(10) The order in disposal of a show-cause notice may provide for-
(a) no action;
(b) warning;
(c) any of the actions under section 220(2) to (4); or
(d) a reference to the Board to take any action under section 220(5).
(11) The order passed under sub-regulation (10) shall not become effective until thirty days have elapsed from the date of issue of the order unless the Disciplinary Committee states otherwise in the order along with the reason for the same.
(12) The order passed under sub-regulation (10) shall be issued to the insolvency professional agency immediately, and published on the website of the Board.
(13) If the order passed under sub-regulation (10) suspends or cancels the registration of the insolvency professional agency, the Disciplinary Committee shall require the insolvency professional agency to-
(a) discharge pending obligations;
(b) continue its functions till such time as may be specified, to enable the enrolment of its members with another insolvency professional agency; and
(c) comply with any other directions as considered appropriate.
2.11.10:Insolvency and Bankruptcy Board of India (Inspection and Investigation) Regulations, 2017
10. Investigation Report.
(1) The Investigating Authority shall submit a copy of the draft investigation report to the Board.
(2) The Board shall examine the investigation report as to whether investigation is complete and satisfactory or requires further investigation and advise the Investigating Authority accordingly within 15 days of receipt of the investigation report.
(3) After taking into account advice of the Board, the Investigating Authority shall prepare the investigation report and submit it to the Board.
2.11.11:Insolvency and Bankruptcy Board of India (Inspection and Investigation) Regulations, 2017
11. Consideration of Report.
(1) The Board shall consider the inspection report received under regulation 6 or investigation report received under regulation 10, as the case may be, expeditiously.
(2) If the Board, after consideration of the report under sub-regulation (1) , is of the prima facie opinion that sufficient cause exists to take actions under section 220 or subsection (2) of section 236, it shall issue a show-cause notice in accordance with regulation 12 to the service provider or an associated person and in any other case, close the inspection or investigation, as the case may be.
2.11.12:Insolvency and Bankruptcy Board of India (Inspection and Investigation) Regulations, 2017
12. Show-cause notice.
(1) The show-cause notice shall be in writing and shall state-
(a) the provisions of the Code under which it has been issued;
(b) the details of the alleged facts;
(c) the details of the evidence in support of the alleged facts;
the provisions of the Code, rules, regulations and guidelines thereunder allegedly violated, or the manner in which the public interest is allegedly affected; the provisions of the Code, or the rules, regulations or guidelines made thereunder, allegedly violated;
(e) the actions or directions that the Board proposes to take or issue, if the allegations are established;
(f) the time within which the notice may make written submission.
(2) For the purposes of clause (e) of sub-regulation (1), the Board shall take into account, but not limited to, the following factors: –
(a) the nature and seriousness of the alleged contraventions, including whether it was deliberate, reckless or negligent on the part of the noticee;
(b) the consequences and impact of the alleged contravention, including –
(i) unfair advantage gained by the noticee as a result of the alleged contravention;
(ii) loss caused, or likely to be caused, to clients or any other person as a result of the alleged contravention; and
(iii) the conduct of the noticee after the occurrence of the alleged contravention, and prior to the alleged contraventions.
(3) The show-cause notice shall provide at least 21 days to the noticee to make a written submission.
(4) The show-cause notice shall state, if a noticee fails to respond under sub-regulation (3) within the given time, it shall be disposed of based on the material available on record.
(5) The show-cause notice shall enclose copies of relevant documents and extracts of relevant portions from the report of investigation or inspection, or other records.
(6) A show-cause notice issued shall be served on the noticee-
(a) by sending it to the noticee at its registered office, by registered post with acknowledgement due; and
(b) by an appropriate electronic form to the email address provided by the service provider to the Board.
(7) The Board shall refer the show-cause notice to the Disciplinary Committee alongwith all the relevant records including the written submissions, if any, made by the noticee in the matter.
2.11.13:Insolvency and Bankruptcy Board of India (Inspection and Investigation) Regulations, 2017
13. Disposal of Show-cause notice.
(1) The Disciplinary Committee, after providing an opportunity of being heard to the noticee, shall dispose of the show-cause notice by a reasoned order.
(2) The Disciplinary Committee shall dispose of the show-cause notice within a period of 180 days of the issue of the show-cause notice.
(3) The order under sub-regulation (1) may provide for-
(a) closure of show-cause notice without any direction;
(b) warning;
(c) any of the actions under sub-sections (2), (3) and (4) of section 220;
(d) a reference to the Board to take any action under sub-section (5) of section 220 or sub-section (2) of section 236; or
(e) any other action or direction as may be considered appropriate.
(4) The order under sub-regulation (1) shall not become effective until thirty days have elapsed from the date of issue of the order, unless the Disciplinary Committee states otherwise in the order along with the reasons for the same.
that where the service provider is an insolvency professional, a copy of the order shall be sent to the insolvency professional agency of which he is a professional member.
The order under sub-regulation (1) shall be issued to the noticee immediately, and be published on the website of the Board.
If the order under sub-regulation (1) suspends or cancels the registration of a service provider, the Disciplinary Committee may, if it considers fit, require the service provider to-
(a) discharge pending obligations, if any;
(b) continue its functions till such time as may be directed, only to enable clients to shift to another service provider; and
(c) comply with any other directions.
2.11.14:Insolvency and Bankruptcy Board of India (Inspection and Investigation) Regulations, 2017
14. Restitution.
(1) Where a direction has been issued, to any person to disgorge the amount under subsection (4) of section 220, the Board shall endeavour to realize the amount of disgorgement expeditiously.
(2) The Board shall, as soon as after the realization of the amount of disgorgement, invite claims by a public announcement from persons, who have suffered loss on account of the contravention underlying the direction under sub-section (4) of section 220, seeking restitution from the disgorged amount.
(3) The persons referred to in sub-regulation (2) shall submit claims in within 30 days of the public announcement.
(4) The Board shall scrutinise the claims and prepare a list of valid claims within 30 days of the last date for receipt of claims.
(5) The Board shall disburse such amount proportionately among the claimants within 30 days of preparation of the list of valid claims.
2.11.5:Insolvency and Bankruptcy Board of India (Inspection and Investigation) Regulations, 2017
5. Interim Inspection Report.
(1) The Inspecting Authority may submit an interim inspection report to the Board, if it considers appropriate, keeping in view the nature and progress of inspection.
(2) The Inspecting Authority shall submit an interim inspection report, if required by the Board.
(3) If the Board is satisfied from the interim inspection report that there is a gross violation of the provisions of the Code, or the rules, regulations made thereunder, by the service provider and an immediate action under sub-section (2) of section 220 is warranted, the Board shall refer the matter to the Disciplinary Committee for an appropriate action.
(4) On consideration of the interim inspection report, the Disciplinary Committee may pass an interim order with appropriate directions to the service provider.
(5) The interim order referred to sub-regulation (4) shall lapse on expiry of 90 days.
2.11.6:Insolvency and Bankruptcy Board of India (Inspection and Investigation) Regulations, 2017
6. Inspection Report.
(1) The Inspecting Authority shall send a copy of the draft inspection report to the service provider requiring comments of the service provider within 15 days from receipt of the draft inspection report.
(2) The Inspecting Authority shall submit a copy of the draft inspection report to the Board.
(3) The Board shall examine the draft inspection report as to whether inspection is complete and satisfactory or requires further inspection and advise the Inspecting Authority accordingly within 15 days of receipt of draft inspection report.
(4) After considering the comments of the service provider and taking into account advice of the Board, the Inspecting Authority shall prepare the inspection report and submit it to the Board.
2.11.9:Insolvency and Bankruptcy Board of India (Inspection and Investigation) Regulations, 2017
9. Interim Investigation Report.
(1) The Investigating Authority may submit an interim investigation report to the Board, if it considers appropriate, keeping in view the nature and progress of investigation.
(2) The Investigating Authority shall submit an interim investigation report, if required by the Board.
(3) If the Board is satisfied from the interim investigation report that prima facie, there is a gross violation of the provisions of the Code, or the rules or regulations made thereunder, by the service provider and an immediate action under sub-section (2) of section 220 is warranted, the Board shall refer the matter to the Disciplinary Committee for an appropriate action.
(4) On consideration of the interim investigation report, the Disciplinary Committee may pass an interim order with appropriate directions to the service provider.
(5) The interim order referred to sub-regulation (4) shall lapse on expiry of 90 days.
IBC-Enforcement Notification [S.O.3453(E)] dated 15/11/2016
Form A-IBC (Inspection and Investigation) Regulations, 2017)