Raman is acting as Resolution Professional (RP) during the Corporate Insolvency Resolution Process (CIRP) of Delta Ltd. Subsequently, Raman was also appointed as Interim Resolution Professional (IRP) of Sigma Ltd. (a who

The IBBI (Insolvency Professionals) Regulations, 2016 makes provisions for the examination and registration of Insolvency Professionals with the Insolvency and Bankruptcy Board of India. These regulations also make provisions for the disciplinary proceedings against the insolvency professional as well as prescribes a Code of Conduct for insolvency professionals. First schedule to the aforesaid regulations prescribes a Code of Conduct for insolvency professionals. According to regulation 7(2)(h), the registration of an insolvency professional shall be subject to the condition that he shall abide by the following Code of Conduct specified in the First Schedule to the Regulations. Integrity and Objectivity An insolvency professional must disclose the details of any conflict of interests to the stakeholders, whenever he comes across such conflict of interest during an assignment. Considering the above, since Raman is facing a direct conflict of interest because of he being acting as resolution professional in Delta Ltd. and Sigma Ltd. and his actions may get prejudiced; therefore, he shall promptly inform the Committee of Creditors of both the companies about the conflict of interest and tender his resignation from one of the companies to avoid such conflict of interest. Remuneration and Costs As per Regulation 25 of the Code of Conduct, an insolvency professional must provide services for remuneration which is charged in a transparent manner, is a reasonable reflection of the work necessarily and properly undertaken, and is not inconsistent with the applicable regulations. Further Regulation 26 provides that an insolvency professional shall not accept any fees or charges other than those which are disclosed to and approved by the persons fixing his remuneration. Regulation 27 makes it mandatory for an insolvency professional to disclose all costs towards the insolvency resolution process costs, liquidation costs, or costs of the bankruptcy process, as applicable, to all relevant stakeholders, and must endeavour to ensure that such costs are not unreasonable. Considering the above, the fee demanded by Raman is not in accordance with the Code and work to be performed by him.