The Bombay High Court stayed the impugned order dated 28th February 2022 passed by the Insolvency and Bankruptcy Board of India (“IBBI”) in which the registration of Petitioner as a registered valuer with the IBBI was suspended. A division bench comprising Hon’ble Justice G.S. Patel and S.G. Dige noted that the impugned order was passed on an absurd assumption that due to mere accusations and allegations, the Petitioner is already so guilty that his professional integrity, reputation, and character are tarnished.
Brief Facts:
The Petitioner was one of the directors of Yardi Prabhu Consultants and Valuers Pvt Ltd. Sometime in September 2019, an FIR came to be registered by the Economic Offences Wing (“EOW”) against certain officials of the Punjab and Maharashtra Cooperative Bank Ltd (“PMC”). Yardi Prabhu Consultants was among several valuers on the panel of the PMC. Due to this association, EOW called the Petitioner for enquiry and investigation. Subsequently, a Petitioner got arrested, and charge sheet was filed against him. On the basis of this Charge-sheet, a Show Cause Notice (“SCN”) was issued asking why the registration of the Petitioner with the IBBI should not be canceled.
It was mentioned in the SCN said that the filing of the charge sheet against the Petitioner might or had significantly impugned the ‘integrity, reputation and character’ of the Petitioner, thus rendering him ineligible under Rule 3(1)(k) of Registered Valuers and Valuation Rules 2017 (“the RV Rules”). The Petitioner was afforded a Personal Hearing which his Advocates attended on 4th August 2021. However, on 28th February 2022, the IBBI, through its Whole
Time Member (“WTM”), issued the impugned order in which they suspended the registration of Petitioner as a registered valuer with the IBBI till he gets exonerated of the charges. The Petitioner filed a present writ petition against the impugned order dated 28th February 2022 passed by the IBBI through its WTM.
Observation of the Court:
This Court observed that on the face of the impugned order, it is difficult to comprehend its reasoning, logic, or rationale. Anyone may set the criminal process in motion against anyone. There may be an FIR. There may even be a charge sheet. But, except in certain specific statutes, the presumption in criminal jurisdiction in this country is still that a person is innocent until he is proven guilty. Further, it was noted that even the charges had not been framed, and there is every possibility of Petitioner’s acquittal.
In the opinion of this Court, the impugned order had proceeded merely on the absurd basis that the pendency of a criminal proceeding robs a person such as the Petitioner of his “fit and proper person” status because it supposedly affects his ‘integrity, reputation and character’. In other words, the impugned order suggested that the Petitioner is already so guilty that his professional integrity, reputation, and character are tarnished on account of mere accusations and allegations. In view of the above observations, this Court was not satisfied by the reasoning given in the impugned order and stayed it.
The decision of the Court:
The Bombay High Court stayed the impugned order as it was difficult to comprehend its reasoning, logic or rationale.
Case Title: Vishwanatha Sridhar Prabhu vs UOI
Coram: Hon’ble Justice G.S. Patel and S.G. Dige
Case no.: WRIT PETITION NO. 10440 OF 2022
Advocate for the Appellant: Mr Bhavesh Parmar
Advocate for the Respondent: Mr Pankaj Vijayan
Read Judgment ;
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