INSOLVENCY PROFESSIONAL AGENCY
Section 3(20) of Insolvency and Bankruptcy Code, 2016 (‘Code’ for short) defines the term ‘insolvency professional agency’ as any person registered with the Board under Section 201 of this Code.
Section 199 of the Act specify that no one shall carry on the business as insolvency professional agencies under this Code and enroll insolvency professionals as its members except under and in accordance with a certificate of registration issued in this behalf by the Board.
Section 200 of the Act provides for the principles governing registration of insolvency professional agency. Section 200 provides that the Board shall have regard to the following principles while registering the Insolvency Professional Agencies under this code-
to promote the professional development of and regulation of insolvency professionals;
to promote the services of competent insolvency professionals to cater to the needs of debtors, creditors and such other persons as may be specified;
to promote good professional and ethical conduct amongst insolvency professionals;
to protect the interests of debtors, creditors and such other persons as may be specified;
to promote the growth of insolvency professional agencies for the effective resolution of insolvency and bankruptcy process under this Code.
Section 201 of the Code provides the procedure for registration of insolvency professional agency. The procedure is as below-
Every application for registration shall be made to the Board in such form and manner, containing such particulars, and accompanied by such fee, as may be specified by regulations;
Every application received by the Board shall be acknowledged within 7 days of its receipt;
On receipt of the application, the Board may, on being satisfied that the application conforms with all requirements specified, grant a certificate of registration to the applicant or else reject such application by order;
No order rejecting the application shall be made without giving an opportunity of being heard to the applicant;
Every order so made shall be communicated to the applicant within a period of 15 days;
The Board may issue a certificate of registration to the applicant in such form and subject to such terms and conditions as may be specified.
Section 201 (4) provides that the Board may renew the certificate of registration from time to time in such manner and on payment of such fee as maybe specified.
Section 201 (5) provides that the Board may, by order, suspend or cancel the certificate of registration granted to an insolvency professional agency on any of the following grounds-
that it has obtained registration by making a false statement or misrepresentation or by any other unlawful means;
that it has failed to comply with the requirements of the regulations made by the Board or bye-laws made by the insolvency professional agency;
that it has contravened any of the provisions of the Act or the rules or the regulations made there under;
on any other ground as may be specified by regulations.
No order shall be made unless the insolvency professional agency concerned has been given a reasonable opportunity of being heard. No such order shall be passed by any member except whole time members of the Board.
Section 202 provides for appeal to National Company Law Appellate Tribunal against the order of cancellation of registration or rejection of registration. Section 202 provides that any insolvency professional agency which is aggrieved by any order of the Board, may prefer an appeal to the National Company Law Appellate Tribunal in such form, within such period, and in such manner, as may be specified by regulations.
Section 203 provides that the Board may, for the purposes of ensuring that every insolvency professional agency takes into account the objectives sought to be achieved under this Code, make regulations to specify-
the setting up of a governing Board of an insolvency professional agency;
the minimum number of independent members to be on the governing Board of the insolvency professional agency; and
the number of insolvency professionals being its members who shall be on the governing Board of the insolvency professional agency.
Section 204 provides the functions of insolvency professional agencies. The agencies has to perform the following functions-
grant membership to persons who fulfill all requirements set out in its bye laws on payment of membership fee;
lay down standards of professional conduct for its members;
monitor the performance of its members;
safeguard the rights, privileges and interests of insolvency professionals who are its members;
suspend or cancel the membership of insolvency professionals who are its members on the grounds set out in its bye-laws;
redress the grievances about its functions, list of its members, performance of its members and such other information as may be specified by the regulations.
Section 205 provides that the insolvency professional agencies are to make their own bye-laws. This section provides that subject to the provisions of this Code and any rules or regulations made there under and after obtaining the approval of the Board, every insolvency professional agency shall make bye-laws consistent with the model bye-law specified by the Board.
Section 196 (2) provides that the Board may make bye-laws to be adopted by the insolvency professional agencies which may provide for-
the minimum standards of professional competence of the members of the insolvency professional agencies;
the standards for professional and ethical conduct of the members;
requirements for enrolment of persons as members which shall be non discriminatory;
the manner of granting membership;
setting up of a governing Board for internal governance and management of insolvency professional agency in accordance with the regulations specified by the Board;
the information required to be submitted by members including the form and the time for submitting such information;
the specific classes of persons to whom services shall be provided at concessional rates or for no remuneration by members;
the grounds on which penalties may be levied upon the members and the manner thereof;
a fair and transparent mechanism for redressal of grievances against the members;
the grounds under which the insolvency professionals may be expelled from the membership of the agency;
the quantum of fee and the manner of collecting fee as members;
the procedure for enrolment of persons;
the manner of conducting examination for enrolment of insolvency professionals;
the manner of monitoring and reviewing the working of insolvency professionals who are members;
the duties and other activities to be performed by members;
the manner of conducting disciplinary proceedings against its members and imposing penalties;
the manner of utilizing the amount received as penalty imposed against any insolvency professional.