bankruptcy

Uploading E-forms on MCA 21 Portal not experience in management for registration as Insolvency Professionals

Uploading E-forms on MCA 21 Portal not experience in management for registration as Insolvency Professionals as required under IBBI (Insolvency Professionals) Regulations 2016

ABCAUS Case Law Citation
ABCAUS 2347 (2018) 05 IBBI

In terms of regulation 5(b) of the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016 (IP regulations), an individual is eligible for registration if he “has passed the Limited Insolvency Examination, and has fifteen years of experience in management, after he received a Bachelor’s degree from a university established or recognized by law”.

The applicant did not have any professional qualification and was not practising as a member of professional body. However he was a professional member of the ICSI Institute of Insolvency Professionals (ICSI IIP). An application was submitted by him under regulation 6 of the IP Regulations seeking a certificate of registration as an Insolvency Professional (IP). ICSI IIP had recommended for registration of the applicant as an IP.

The applicant, in his application has claimed the following experience:

After going through the application, the Insolvency and Bankruptcy Board of India (Board) formed a prima facie opinion that the experience during CS management training and the practice as a sole proprietor do not qualify as experience in management and hence the applicant does not have 15 years of experience in management, as required under regulation 5(b) of the IP regulations. The Board communicated its prima facie opinion vide its e-mail dated 21st March, 2018 to the applicant and provided an opportunity to explain why his application should be accepted. It also provided an opportunity of personal hearing.

Relying on the decision of Hon’ble Supreme Court and High Courts the Board opined that to determine if a person is having experience in management, one needs to discern the predominant nature of his duties. A key element of management is supervision and getting the task done with the help of people. A person is said to be in a supervisory capacity when there is at least one person working with him and he supervises the work of the other person.

Notably, the applicant himself submitted that this period does not constitute experience in management.

The applicant had claimed that he had experience in ‘practice’ since 1st April, 2013 and he counted this period towards experience in management. According to the applicant he was doing advisory and company law compliances including incorporation of Company, LLP, Annual and other incidental filings with RoC and claimed that the experience gained from 01/04/2013 onwards qualified as a managerial experience.

The Board observed that the applicant was not professionally qualified and had been merely uploading e-forms (after digital signature of Directors and certification from qualified professionals) under the Companies Act, 2013 on MCA 21 System. The work of uploading of E- forms and depositing fees on MCA 21 System could not be considered experience in management.

It was further observed that the applicant was not qualified to practice as a professional and did not have a single person to assist him in his work. His gross income was less than Rs. 5 lakh in the last financial year. Therefore, the Board did not consider this experience as experience in management.

Thus, after excluding the period of do called practice and the period of CS training, the applicant did not have 15 years of experience.

Accordingly the Board in exercise of powers under regulation 8(3)(b) of the IP Regulations, rejected the application for registration as an IP 

Download Full Judgment Click Here >>

----------- Similar Posts: -----------
Share

Recent Posts

  • Income Tax

NSDL latest e-TDS TCS RPU Version 5.2 and FVU 8.7 applicable from 28.06.2024 – Download

NSDL latest e-TDS TCS Return Preparation Utility (RPU) Version 5.2 from FY 2007-08 NSDL has revised the e-TDS TCS RPU…

10 hours ago
  • Income Tax

ITAT set aside order as no opportunity was allowed to assessee to explain delay

ITAT set aside order as no opportunity was allowed to assessee to explain the delay in filing appeal In a…

11 hours ago
  • SEBI

SEBI mandates email as default mode for Consolidated Account Statement

SEBI mandates email as default mode of dispatch for Consolidated Account Statement by Depositories, Mutual Fund etc. SEBI has mandated…

12 hours ago
  • ICAI

ICAI bans four Chartered Accountants for professional misconduct

ICAI bans four Chartered Accountants for professional misconduct Notification No. PR/330/2019/DD/308/2019/DC/1501/2021 In terms of the provisions of Section 21B(3) of…

12 hours ago
  • Prevention of Money Laundering Act 2002

Three CBI Courts designated as Special Courts under PMLA in West Bengal

Three CBI Courts designated as Special Courts under PMLA in the State of West Bengal MINISTRY OF FINANCE(Department of Revenue)NOTIFICATION…

13 hours ago
  • Income Tax

Addition u/s 40A(3) for cash payment to labourers for loading charges deleted

Addition u/s 40A(3) for cash payment to labour for loading charges deleted by ITAT In a recent judgment, the ITAT…

1 day ago