Whether IRP can ask practicing Company secretary to do verification of claims under IBC on its behalf?

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 Whether IRP can ask practicing Company secretary to do verification of claims under IBC on its behalf?

Shubham Budhiraja[1]



Mr. A appointed as IRP by NCLT, Delhi in matter of CIRP of XYZ Limited. Mr. A appointed Mr. B (Practicing Company Secretary) for purpose of helping Mr. A in verification of claims of creditors (as required to be done as duty of IRP). Mr. A contend that since XYZ limited is a big concern and its claim documents are in huge volumes and verification process is time bound under IBC and therefore he asked Mr. B to assist him in verification and the fee payment of Mr. B was also approved by COC in its 1st meeting. The IBBI held that delegation of its duty of verification of claims by IRP is in breach of section 18(1)(b) of the Code, regulation 13 (1) of the CIRP Regulations and IBBI Circular no. IP/003/2018 dated 3rd January, 2018 and hence IRP is guilty and penalized with the amount equal to fees paid to Mr. B[2]

(I)                 An IRP / RP is appointed by the AA and is duty bound to conduct CIRP with fairness and diligence and must maintain absolute independence in discharge of his statutory duties without any external influences.

 

(II)               The entire resolution process of a CD is dependent on the IRP/ RP who is primarily responsible for efficiently and effectively steer it towards resolution. It is due to this reason that the role of the IRP/ RP becomes paramount during CIRP.

 

 

(III)             Further, it is the duty of the IP to follow the guidelines and Code of Conduct laid down under the Code and the Regulations made thereunder so as to legitimately meet the interests of all stakeholders. As per the section 18(1)(b) of the Code, it is the duty of the IP to receive and collate all the claims

 

(IV)             An IP is also obligated under section 208(2)(a) and (e) of the Code to take reasonable care and diligence while performing his duties. The regulation 13(1) of the CIRP Regulations provides for verification of claims

 

(V)               The IBBI Circular no. IP/003/2018 dated 3rd January, 2018 relating to “Insolvency professional not to outsource his responsibilities” clarifies that: “3. It is hereby directed that an insolvency resolution professional shall not outsource any of his duties and responsibilities under the Code.”


[1] Advocate Delhi High Court, Associate Company Secretary-ICSI, Member-Research Committee, North Region-ICSI, Member-Delhi High Court Bar Association, Secretary-NGO Shaurya Ek Samman (Regd.), Shubhambudhiraja02@gmail.com , 9654055315

[2] No. IBBI/DC/80/2021

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