NCLAT Partially Stays IBBI's 3-Year RP Suspension

Authority: National Company Law Appellate Tribunal Principal Bench, New Delhi (Justice N. Seshasayee, Member (Judicial) and Barun Mitra, Member (Technical))

Order Date: 17.07.2026

Case Overview

The appeal challenges the Insolvency and Bankruptcy Board of India's (IBBI) order dated 08.06.2026 suspending resolution professional Sachin Naveen Sinha's registration for three years. The disciplinary action originated from an order of the Adjudicating Authority (NCLT) dated 26.09.2025 in I.A.382/2025 in C.P.(IB) 63/9/JPR/2020, which removed Sinha as resolution professional in a specific Corporate Insolvency Resolution Process (CIRP) and directed him to refund ₹2 lakh received as initial remuneration while recommending disciplinary action by IBBI.

The core legal question concerns the extent of IBBI's jurisdiction under Section 220 of the IBC. The appellant argued that IBBI can only remove a resolution professional from the particular assignment where misconduct occurred, not ban them from all assignments. IBBI contended that as a regulator, it has broad powers to suspend registration entirely, comparable to suspending an advocate's sanad.

The tribunal examined the newly introduced Section 220(7) of the IBC (Amendment Act 6 of 2026, effective 22.05.2026), which grants NCLAT appellate jurisdiction over IBBI disciplinary orders. The court also considered Regulation 13(7) of the IBBI (Inspection and Investigation) Regulations, 2017, which requires IBBI to intimate disciplinary orders to all Committees of Creditors (CoCs) where the professional is acting, suggesting a balanced approach rather than automatic suspension from all assignments.

Final Outcome

The NCLAT granted interim relief by partially staying the suspension order. The tribunal suspended Sinha's suspension regarding other assignments where he is appointed as resolution professional, while allowing the suspension to remain effective for the specific CIRP where misconduct was alleged. The court directed that IBBI may communicate the impugned order to other CoCs, leaving it to respective CoCs to decide whether to continue with Sinha as their resolution professional. The main appeal remains pending for final determination of the jurisdictional scope under Section 220(7).

Topics: Insolvency Professional Regulation, Disciplinary Jurisdiction, Committee of Creditors