W.P.(C) 8974/2025 Page 1 of 26

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* IN THE HIGH COURT OF DELHI AT NEW DELHI

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Judgment pronounced on: 02.02.2026

W.P.(C) 8974/2025 and CM APPL.38317/2025

VIKAS PRAKASH GUPTA .....Petitioner

Through: Mr. Satyajit Sarna, Mr. Sudev Juneja,

Mr. Mohit Negi and Mr. Debarchan

De, Advocates.

versus

INSOLVENCY AND BANKRUPTCY BOARD OF INDIA AND

ANR .....Respondents

Through: Ms. Amrita Singh, Mr. Prasang

Sharma and Mr. Sanket Khandelwal,

Advocates for R-1.

Mr. Rakesh Kumar, CGSC along with

Mr. Sunil, Advocate for UOI.

CORAM:

HON'BLE MR. JUSTICE SACHIN DATTA

JUDGMENT

1. The petitioner has filed the present petition, assailing the Order dated

25.04.2025 passed by the Disciplinary Committee of the Insolvency and

Bankruptcy Board of India (respondent no.1) in IBBI/DC/284/2025,

whereby the registration of the petitioner, a registered Insolvency

Professional bearing Registration No. IBBI/IPA-001/IPP00501/2017-

2018/10889, has been suspended for a period of one year.

2. The background of the matter is that National Company Law

Tribunal, Chennai Bench (Adjudicating Authority), vide Order dated

19.02.2020, admitted an application under Section 7 of the Insolvency and

Bankruptcy Code, 2016 (“the Code”) filed by State Bank of India for

W.P.(C) 8974/2025 Page 2 of 26

initiation of the Corporate Insolvency Resolution Process (CIRP) of

Kamachi Industries Limited (Corporate Debtor). By the same order, the

petitioner was appointed as the Interim Resolution Professional (IRP) to

conduct the CIRP.

3. It is submitted that the said engagement was agreed at a consolidated

fee of Rs. 7.42 lakhs, comprising IRP fees of Rs. 1.65 lakhs and support

service fees of Rs. 5.77 lakhs.

4. It is submitted that on 05.05.2020, the first meeting of the Committee

of Creditors (CoC) of the Corporate Debtor was convened, wherein the

petitioner was proposed to be confirmed as the Resolution Professional (RP)

on the same fee structure as approved at the IRP stage.

5. However, it is submitted that the CoC did not approve the proposed

fees in the first meeting, expressing its desire to commercially negotiate the

consolidated fees.

6. Thereafter, a second CoC meeting was held on 09.06.2020, wherein

the fees was fixed at Rs. 4.50 lakhs, comprising RP fees of Rs. 1.65 lakhs

and support service fees of Rs. 2.85 lakhs for support service provider

(Quantuum Resolution Professional Private Limited). The relevant portion

of the minutes of Second CoC meeting dated 09.06.2020 is reproduced as

under –

“4. Voting matters:

i. To confirm the appointment of Mr. Vikas Prakash Gupta, IBBI

Registration no. IBBI/IPA- 001/IPP00501/2017- 18/10889 as the

Resolution Professional (“RP”) of the Corporate Debtor for a monthly

fee of Rs. 1.65 Lacs (Excluding of OPE & Taxes)

ii. To confirm the appointment of Quantuum Resolution Professional

Private Limited as Support service agency for a monthly fee of Rs. 2.85

Lacs (Excluding OPE & Taxes)”

W.P.(C) 8974/2025 Page 3 of 26

7. Subsequently, it is submitted that on 06.03.2021, a complaint was

purportedly filed before the Insolvency and Bankruptcy Board of India

(“IBBI”) by Mr. N. Murugesan, allegedly at the behest of Mr. Hari Iyer,

claiming that the CoC had approved Rs. 2.85 lakhs to be paid directly to

Quantuum, but that the petitioner engaged other professionals instead.

8. The IBBI forwarded the complaint to the petitioner on 12.05.2021, to

which the petitioner submitted a reply on 01.06.2021.

9. It is further submitted that the respondent no.1 issued a Show Cause

Notice (SCN) dated 05.04.2024, nearly three years later, alleging

contravention of the Insolvency Professionals Regulations and Board

Circular No. IP/004/2018 dated 16.01.2018. The SCN is reproduced as

under –

W.P.(C) 8974/2025 Page 4 of 26

W.P.(C) 8974/2025 Page 5 of 26

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10. The SCN, inter alia, alleged that the p etitioner improperly received

consolidated fees without segregating payments for himself and the support

services.

11. The petitioner filed a reply to the SCN on 19.04.2024.

12. It is submitted that after almost 11 months from date of receipt of the

reply filed by the petitioner, the Disciplinary Committee acted in furtherance

of the Show Cause Notice and conducted a hearing on 27.02.2025.

W.P.(C) 8974/2025 Page 7 of 26

13. Thereafter, the Disciplinary Committee passed the Impugned Order

dated 25.04.2025, holding the Petitioner guilty of violating the 2018 Circular

and Clauses 25C and 26A of the Code of Conduct, and suspended his

registration for one year with effect from 24.05.2025.The relevant portion of

the Impugned Order dated 25.04.2025 is reproduced as under –

W.P.(C) 8974/2025 Page 8 of 26

W.P.(C) 8974/2025 Page 9 of 26

W.P.(C) 8974/2025 Page 10 of 26

W.P.(C) 8974/2025 Page 11 of 26

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14. Aggrieved with the aforesaid, the petitioner has filed the present

petition.

15. While challenging the said order the petitioner has submitted as

under:–

i. The petitioner has already suffered punishment exceeding that

imposed by the Impugned Order. It is submitted that in terms of

Regulation 23A

1

1

23-A. The authorisation for assignment shall stand suspended upon initiation of disciplinary proceedings

by the Agency or by the Board, as the case may be.

of the IBBI (Model Bye-Laws and Governing Board

of Insolvency Professional Agencies) Regulations, 2016, the

Authorisation for Assignment (AFA) of an Insolvency Professional

stands automatically suspended upon issuance of a Show Cause

Notice. Without a valid AFA, an Insolvency Professional is statutorily

barred from accepting new assignments.

W.P.(C) 8974/2025 Page 13 of 26

ii. Further, Regulation 13(2)

2

iii. It is emphasised that in the present case, the Show Cause Notice

dated 05.04.2024 was duly replied to by the petitioner on 19.04.2024.

However, the Impugned Order was passed only on 25.04.2025, i.e.,

after more than one year, in clear breach of Regulation 13(2).

of the IBBI (Inspection and

Investigation) Regulations, 2017 mandates that the Disciplinary

Committee shall endeavour to dispose of a show cause notice within

sixty days from the date of receipt of the reply thereto.

iv. It pointed that on account of the said inordinate delay, the

petitioner’s AFA remained suspended for nearly one year prior to the

passing of the Impugned Order, during which period the petitioner

was prevented from undertaking any professional assignment,

resulting in financial and reputational loss. It is submitted that this

punitive consequence has not been considered by the respondent no.1

while imposing the further suspension of one year, rendering the

action ex facie arbitrary and excessive.

v. It is averred that the respondent no.1, by permitting the AFA

suspension to continue for nearly one year due to its own delay, and

thereafter imposing a further suspension of one year, has subjected the

petitioner to a punishment wholly disproportionate to the alleged

lapse.

vi. It is further submitted that while observing that as per the

Second Meeting of the Committee of Creditors, Quantuum Resolution

Professional Private Limited (“Quantuum”) ought to have been paid

2

(2) The Disciplinary Committee shall endeavour to dispose of the show-cause notice within a period of

[sixty days from the due date for receipt of reply to the show-cause notice].

W.P.(C) 8974/2025 Page 14 of 26

directly for support services, and that payment through the petitioner

amounted to a contravention, the Disciplinary Committee ignored the

factual background that Quantuum is a company in which the

petitioner holds 90% shareholding, and that serious shareholder

disputes involving Mr. Hari Iyer were pending before the NCLT,

Mumbai.

vii. It is submitted that in order to safeguard the CIRP and prevent

misuse of funds, the petitioner, with full knowledge of the CoC,

directly paid the relevant team members the amounts earmarked for

support services.

viii. The case of the petitioner is that CoC approved the requirement

of support services and fixed only the upper limit of CIRP costs, as

contemplated under Section 28 of the Code. The case of the petitioner

is that under Section 28 of the Code, the power of the CoC is only

limited to approve the upper limit of CIRP costs and not to approve

each appointment made by the RP to assist in the CIRP.

ix. It is submitted that the petitioner has the right under the Code

and the regulations flowing from it, to appoint his support staff team,

and pay them as per the fees approved by the CoC.

x. It is also emphasised that the Impugned Order records no

finding whatsoever of unlawful gain, derived by the petitioner under

Section 220(3) of the Insolvency and Bankruptcy Code, 2016. It is

submitted that the petitioner did not retained any sum in excess of the

RP Fee earmarked for him by the CoC.

xi. It is submitted that the entire allegation, even if assumed to be

correct, pertains at best to a procedural or secretarial non-compliance.

W.P.(C) 8974/2025 Page 15 of 26

xii. The CoC was kept duly informed of all such matters, and CoC

did not ever make any objection.

xiii. In order to substantiate its case the petitioner has placed

reliance on Sandeep Kumar Bhatt v. Insolvency & Bankruptcy

Board of India and Others, 2025 SCC OnLine Del 2102 .

16. While refuting the aforesaid contentions of the petitioner the

respondent no. 1 has submitted as under –

i. The petitioner has acted in blatant violation of Circular No.

IP/004/2018 dated 16.01.2018 issued by the Insolvency and

Bankruptcy Board of India, as well as Clauses 25C

3

and 26A

4

ii. It is submitted that the said provisions mandate that an

insolvency professional must charge remuneration in a transparent

manner and that any professional engaged by an insolvency

professional must raise invoices in his/its own name and receive

payment directly in his/its own bank account.

of the

Code of Conduct under the IBBI (Insolvency Professionals)

Regulations, 2016.

iii. It is pointed that the minutes of the meetings of the Committee

of Creditors unequivocally demonstrate that the CoC approved a

bifurcated fee structure,(a) a sum of ₹1.65 lakh per month as the fee

payable to the petitioner; and (b) a sum of ₹2.85 lakh per month

3

25C. An insolvency professional shall ensure that the insolvency professional entity or the professional

engaged by it raises bills or invoices in their own name towards their fees, and such fees shall be paid to

them through banking channel.

4

26A. An insolvency professional shall not accept/share any fees or charges from any professional and/or

support service provider who are appointed under the processes.

W.P.(C) 8974/2025 Page 16 of 26

towards appointment of Quantuum Resolution Professional Private

Limited as the support service agency.

iv. Despite the above, it is submitted that the petitioner received

the entire consolidated amount of ₹4.50 lakh per month (₹1.65 lakh +

₹2.85 lakh) in his own name. Further, in the disclosures made by the

petitioner in Form CIRP-2 filed before the respondent no.1 and Form

III submitted to the Insolvency Professional Agency, the petitioner

stated that his fees were inclusive of the fee for support services. This

disclosure was directly contrary to the express resolution passed by

the CoC in its second meeting, wherein the fee of the petitioner and

the fee payable to Quantuum were approved separately.

v. The petitioner was unable to demonstrate that the CoC had ever

modified or altered the resolution passed in the second CoC meeting

with regard to the approved fee structure.

vi. It is submitted that the petitioner attempted to justify his

conduct by contending that the sum of ₹2.85 lakh per month was

distributed by him to professionals engaged as part of his internal

team and that such engagement did not require approval of the CoC.

This contention was categorically rejected by the Disciplinary

Committee. It is averred that while the p etitioner was free to distribute

his own fee of ₹1.65 lakh in any manner he deemed fit, he was not

entitled to receive or redistribute the separately approved support

service fee contrary to the CoC’s decision.

vii. Further the case of the respondent no. 1 is that the timeline

prescribed under Regulation 13(2) of the IBBI (Inspection and

W.P.(C) 8974/2025 Page 17 of 26

Investigation) Regulations, 2017 is directory and not mandatory, as

evident from the expression “shall endeavour to dispose of the show

cause notice”. The Regulation does not prescribe any consequence for

non-adherence to the indicative timeline. Accordingly, mere

consumption of time beyond the period mentioned in Regulation

13(2) does not invalidate the disciplinary proceedings or the

Impugned Order.

viii. The respondent also submits that no double jeopardy has been

caused to the petitioner. It is submitted that Suspension of

Authorisation for Assignment (AFA) under Regulation 23A of the

IBBI (Model Bye-Laws and Governing Board of Insolvency

Professional Agencies) Regulations, 2016 and suspension of

registration under Section 220

5

5

220. Appointment of Disciplinary Committee.—(1) The Board shall constitute a Disciplinary Committee

to consider the reports of the Investigating Authority submitted under sub-section (6) of Section 218:

of the Insolvency and Bankruptcy

Code, 2016 operate in distinct fields and serve different purposes.

Provided that the members of the Disciplinary Committee shall consist of whole-time members of the

Board only.

(2) On the examination of the report of the Investigating Authority, 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 Board may direct 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.

W.P.(C) 8974/2025 Page 18 of 26

ix. It is emphasised that the Suspension of AFA under Regulation

23A is an automatic consequence upon issuance of a show cause

notice. It is intended as a protective measure to safeguard the interests

of stakeholders during the pendency of disciplinary proceedings. The

suspension merely prevents acceptance of new assignments and does

not affect ongoing assignments. In contrast, suspension of registration

imposed upon conclusion of disciplinary proceedings constitutes a

punishment under the Code. Such suspension impacts both new and

ongoing assignments, as the order is communicated to stakeholders,

who may then decide whether to continue with the services of the

insolvency professional. Since the two suspensions differ in their

nature, purpose, and legal effect, one cannot be set off against the

other.

x. Another contention is that the scope of judicial review under

Article 226 of the Constitution of India in disciplinary or departmental

proceedings is confined to examination of the decision-making

process and not the merits of the decision itself. This Court does not

sit as an appellate authority over disciplinary findings.

xi. It is submitted that the determination of the appropriate

punishment for proved misconduct lies exclusively within the domain

of the competent disciplinary authority. Where the penalty imposed is

permissible in law and based on established misconduct, the writ

(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.

W.P.(C) 8974/2025 Page 19 of 26

court cannot substitute its own discretion for that of the disciplinary

authority.

xii. Reliance has been placed on State of Andhra Pradesh v. S.Sree

Rama Rao - 1963 SCC Online SC 6, UOI v. Sardar Bahadur-(1972)

4 SCC 618, Union of India v Parma Nanda (1989) 2 SCC 177, B.C.

Chaturvedi v. UOI - (1995) 6 SCC 749, Regional Manager &

Disciplinary Authority v. S. Mohammed Gaffar (2002) 7 SCC 168,

Lucknow Kshetriya Gramin Bank v. Rajendra Singh (2013) 12SCC

372, State of Karnataka &Anr. v. N. Gangaraj (2020) 3 SCC 423,

General Manager, Appellate Authority, UCO Bank v. Krishna

KumarBhardwaj (2022) 13 SCC 237 and State of Karnataka &Anr.

v. Umesh (2022) 6 SCC 563.

17. Both the parties have been heard. At the outset this Court considers it

apposite to first examine whether the scope of its jurisdiction extends to

interfering with orders passed by the Disciplinary Authority.

ANALYSIS AND CONCLUSION:

18. In Sandeep Kumar Bhatt v. Insolvency & Bankruptcy Board of

India and Others

“31. Ordinarily, the writ court would not interfere in matters

arising out of disciplinary proceedings or administrative decision,

save and except where there is apparent or palpable infraction of

a statute, statutory rule or regulation or the proceeding displays

violation of the principles of natural justice. It is trite that it is the

decision-making process and not the decision itself which may be

, 2025 SCC OnLine Del 2102, a Division Bench of this

Court, while delineating the scope of judicial review under Article 226 in

matters arising from disciplinary proceedings of the IBBI, observed as

under–

W.P.(C) 8974/2025 Page 20 of 26

open to judicial review under Article 226 of the Constitution of

India. Yet another facet to consider such category of matters is

on the proportionality of the penalty imposed. It is trite that

unless the penalty imposed is such which shocks the conscience

of the court, or that which no prudent man would reach, no

interference by courts is warranted, ordinarily. This view of this

Court stands fortified from the judgment of the Supreme Court

in Union of India v. K.G. Soni

7

. The relevant paras are extracted

hereunder: (SCC pp. 797- 799, paras 13 and 15)

“13. In Union of India v. G. Ganayutham this Court summed up

the position relating to proportionality in para 31, which read as

follows: (SCC pp. 478- 479, para 31)

‘31. The current position of proportionality in administrative law

in England and India can be summarised as follows:

(1) To Judge the validity of any administrative order or statutory

discretion, normally the Associated Provincial Picture Houses

Ltd. v. Wednesbury Corpn. test is to be applied to find out if the

decision was illegal or suffered from procedural improprieties or

was one which no sensible decision- maker could, on the material

before him and within the framework of the law, have arrived at.

The court would consider whether relevant matters had not been

taken into account or whether irrelevant matters had been taken

into account or whether the action was not bona fide. The court

would also consider whether the decision was absurd or perverse.

The court would not however go into the correctness of the choice

made by the administrator amongst the various alternatives open

to him. Nor could the court substitute its decision to that of the

administrator. This is the Associated Provincial Picture Houses

Ltd. v. Wednesbury Corpn. test.

(2) The court would not interfere with the administrator's decision

unless it was illegal or suffered from procedural impropriety or

was irrational — in the sense that it was in outrageous defiance of

logic or moral standards. The possibility of other tests, including

proportionality being brought into English administrative law in

future is not ruled out. These are the Council of Civil Service

Unions v. Minister for the Civil Service principles.

(3)(a) As per Bugdaycay v. Secy. of State for the Home

Deptt., Regina v. Secy. of State for the Home Department, ex p

Brind and R. v. Ministry of Defence, ex p Smithas long as the

convention is not incorporated into English law, the English courts

merely exercise a secondary judgment to find out if the decision-

maker could have, on the material before him, arrived at the

W.P.(C) 8974/2025 Page 21 of 26

primary judgment in the manner he has done.

(3)(b) If the convention is incorporated in England making

available the principle of proportionality, then the English courts

will render primary judgment on the validity of the administrative

action and find out if the restriction is disproportionate or

excessive or is not based upon a fair balancing of the fundamental

freedom and the need for the restriction thereupon.

(4)(a) The position in our country, in administrative law, where no

fundamental freedoms as aforesaid are involved, is that the

courts/Tribunals will only play a secondary role while the primary

judgment as to reasonableness will remain with the executive or

administrative authority. The secondary judgment of the court is to

be based on Associated Provincial Picture Houses

Ltd. v. Wednesbury Corpn. and Council of Civil Service

Unions v. Minister for the Civil Service principles as stated by

Lord Greene and Lord Diplock respectively to find if the executive

or administrative authority has reasonably arrived at his decision

as the primary authority.

(4)(b) Whether in the case of administrative or executive action

affecting fundamental freedoms, the courts in our country will

apply the principle of ‘proportionality’ and assume a primary role,

is left open, to be decided in an appropriate case where such

action is alleged to offend fundamental freedoms. It will be then

necessary to decide whether the courts will have a primary role

only if the freedoms under Articles 19 and 21, etc. are involved

and not for Article 14.’

∗∗∗

15. To put it differently, unless the punishment imposed by the

disciplinary authority or the appellate authority shocks the

conscience of the court/tribunal, there is no scope for interference.

Further, to shorten litigations it may, in exceptional and rare

cases, impose appropriate punishment by recording cogent

reasons in support thereof. In the normal course if the punishment

imposed is shockingly disproportionate, it would be appropriate to

direct the disciplinary authority or the appellate authority to

reconsider the penalty imposed.”

(emphasis supplied)

35. Lastly, in respect of the charge levelled against the appellant

for violation of procedures and process of CIRP as envisaged in

IBC, this being purely on factual basis, we are refraining from

W.P.(C) 8974/2025 Page 22 of 26

entering into such issue. Though, we are not interfering with the

opinion of the DC that the appellant may have infracted certain

procedural aspects of the IBC of obtaining valuation reports, etc.

we have considered the issue only with respect to the

proportionality of penalty.

36. The above analysis regarding charges (a), (b) and (c) levelled

against the appellant appear to our mind to be aspects which may

have inadvertently been overlooked by the DC and it is possible

that considered from the above point of view, a penalty, not so

severe in nature may perhaps, have been imposed upon the

appellant. We are also aware that ordinarily in such cases, the

remit to the DC on this aspect, would be the correct course of

action, however, having regard to the fact that almost 1 year and 4

months of the penalty imposed have already lapsed i.e. from 1- 12-

2023 leaving 8 months remaining, we deem it appropriate not to

remit the matter for decision of the DC lest it may get further

delayed defeating the purpose of such remit. In that view of the

matter and in our considered opinion, the penalty imposed of two

years suspension from taking any assignment as IRP is reduced to

the period already undergone and the suspension of the appellant

would be deemed to come to an end from the date of this order.”

19. Thus, it is clear that interference by a writ court in disciplinary or

administrative matters is permissible in the following circumstances:

(i) where there is a clear infraction of a statute, statutory rule or

regulation, or violation of principles of natural justice;

(ii) where the decision-making process itself is vitiated, rather than

the decision on merits; and

(iii) where the penalty imposed is grossly disproportionate, such

that it shocks the conscience of the Court.

20. Applying the above principles to the present case, this Court is of the

considered view that the penalty imposed upon the petitioner does not meet

the test of proportionality. Also, certain relevant aspects have not been

considerate while passing the impugned order.

W.P.(C) 8974/2025 Page 23 of 26

21. The gravamen of the allegation against the petitioner, as also the

finding recorded by the Disciplinary Committee (“DC”), is that pursuant to

the decision taken in the second meeting of the Committee of Creditors,

Quantum Resolution Professional Private Limited was approved as the

support service agency, and consequently, payments towards support

services were required to be made directly to Quantuum. It has been

observed that the petitioner, Mr. Vikas Prakash Gupta, by drawing the entire

professional fee into his personal account, acted in contravention of the

approval accorded by the CoC as well as the relevant Circulars issued by the

Insolvency and Bankruptcy Board of India (“IBBI”).

22. However, while arriving at the aforesaid conclusion, the Disciplinary

Committee failed to advert to relevant material and mitigating circumstances

placed on record by the petitioner. It has been specifically contended that the

petitioner holds a 90% shareholding in Quantuum and that, after the

amounts were credited to his account, the sums earmarked by the CoC

towards support services were duly disbursed to the concerned team

members of Quantuum. Any deviation, if at all, was confined solely to the

mode of disbursement (the payments were made by the petitioner to

individual team members instead of being routed through Quantuum as a

corporate entity).

23. The petitioner has also annexed in the present petition invoices raised

by the support team, Forms 16A evidencing deposit of TDS (Annexure P-

11), as well as a detailed Statement of Kamachi RP and Support Fees.

Statement of Kamachi RP and Support Fees are reproduced as under -

W.P.(C) 8974/2025 Page 24 of 26

24. Significantly, there is no specific finding by the Disciplinary

Committee that the petitioner retained any amount for personal gain or

diverted the monies for any purpose other than that for which they were

sanctioned by the CoC.

25. Consideration of these circumstances, lend credence to the

petitioner’s contention that the penalty imposed is

unjustified/excessive/disproportionate.

26. Furthermore, the Regulation 13(2) of the IBBI (Inspection and

Investigation) Regulations, 2017 mandates that the Disciplinary Committee

shall endeavour to dispose of a show cause notice within sixty days from the

W.P.(C) 8974/2025 Page 25 of 26

date of receipt of the reply thereto. It is true that the usage of the term “shall

endeavour to” makes the said regulation directory and not mandatory. While

it is correct that there is no mandatory statutory prescription obligating the

Disciplinary Committee to conclude proceedings within sixty days from the

date of filing of reply to the show cause notice, the absence of an express

upper time limit cannot be construed as conferring unfettered discretion

upon the Disciplinary Committee to pass orders after an inordinate and

unexplained delay. Administrative authorities are required to act within a

reasonable period, and any prolonged delay must be justified by cogent

reasons.

27. In the present case, the show cause notice was issued on 05.04.2024,

on which date the petitioner’s Authorisation for Assignment stood

automatically suspended as per regulation 23A of the IBBI (Model Bye-

Laws and Governing Board of Insolvency Professional Agencies)

Regulations, 2016. The petitioner submitted his reply on 19.04.2024.

However, the impugned order came to be passed only on 25.04.2025, nearly

one year thereafter. As a consequence, the p etitioner remained subjected to

suspension of AFA for almost one year even before the final adjudication,

and was thereafter visited with an additional penalty of one year suspension

of registration by the impugned order.

28. Though it is true that suspension of AFA pending disciplinary

proceedings and suspension of registration upon conclusion of proceedings

operate under different provisions and are distinct in nature, the cumulative

effect of the delay has resulted in the p etitioner effectively suffering a bar

from professional assignments for a period of almost two years.

W.P.(C) 8974/2025 Page 26 of 26

29. The Disciplinary Committee, while imposing the penalty of one

year’s suspension, failed to account for the prejudice already suffered by the

petitioner on account of the prolonged pendency of proceedings and the

mitigating circumstances noted hereinabove.

30. Considering the peculiar facts and circumstances, the penalty of one

year suspension from taking any assignment as Resolution Professional is,

therefore, reduced to the period already undergone; the suspension shall be

deemed to have come to an end from the date of this order.

31. The petition stands disposed of, in the above terms.

SACHIN DATTA, J

FEBRUARY 2, 2026/

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