An appeal was preferred by the Insolvency and Bankruptcy Board of India (hereinafter referred to as the ‘IBBI’) against order dated 5th February, 2019 passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi Bench quashing the disciplinary proceedings initiated by IBBI in the matter of IBBI vs. Rishi Prakash Vats & Ors.
The only question that had arisen for consideration in this Appeal was whether the Adjudicating Authority/ National Company Law Tribunal has jurisdiction to quash the disciplinary proceedings once initiated by the IBBI. On hearing the IBBI, the Supreme Court is of the view that once a disciplinary proceeding is initiated by the IBBI on the basis of evidence on record, it is for the Disciplinary Authority, i.e., IBBI to close the proceeding or pass appropriate orders in accordance with law. Such powers have been vested with IBBI and in absence of any power with the Adjudicating Authority/ (National Company Law Tribunal), the Adjudicating Authority cannot quash the proceeding, even if proceeding is initiated at the instance and recommendation made by the Adjudicating Authority/ National Company Law Tribunal, the NCLAT has observed.
Thus, the NCLAT has set aside the last portion of the impugned order dated 5th February, 2019 relating to quashing of all disciplinary proceeding and the matter has been remitted to the IBBI to pass appropriate order taking into consideration the reference of initiation of proceeding by the Adjudicating Authority as made on 26th April, 2018. The Tribunal said that the ‘Resolution Professional’ has already been expunged and it is expected that an order of closure will be passed at an early date. Therefore, the Appeal stands disposed of.