# In the matter of Amit Gupta vs. Insolvency and Bankruptcy Board of India & Ors.

> HC judgment dated 2024-04-04. Citation: TCN-2024-HC-00108. This Writ Petition challenges a circular issued by the Insolvency and Bankruptcy Board of India…

- **Court:** HC
- **Order date:** 4 Apr 2024
- **Citation:** TCN-2024-HC-00108
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-new-delhi/amit-gupta-vs-insolvency-and-bankruptcy-board-of-india-ors-0aad3476

## Summary

### Background

This Writ Petition challenges a circular issued by the Insolvency and Bankruptcy Board of India (IBBI) on September 28, 2023, concerning the interpretation of terms within Regulation 4(2)(b) of the IBBI (Liquidation Process) Regulations, 2016. The petitioner, a Chartered Accountant and Insolvency Professional (IP), argues that the circular effectively amends the LP Regulations by introducing new requirements under the guise of clarification. The IBBI had issued a Show Cause Notice to the petitioner alleging excessive fees in a liquidation assignment, followed by an inspection and a second Show Cause Notice relying on the Impugned Circular. The petitioner contends that applying the Impugned Circular retrospectively is illegal and violates constitutional rights.

## Facts

The petitioner, an Insolvency Professional (IP), was issued a Show Cause Notice by the Insolvency and Bankruptcy Board of India (IBBI) alleging excessive fees in liquidating Hindustan Dorr Oliver Limited (HDOL). The IBBI then initiated an inspection of the petitioner's assignments, leading to a second Show Cause Notice. This second notice relied on an Impugned Circular issued by the IBBI on September 28, 2023, which clarified the interpretation of terms in Regulation 4(2)(b) of the Liquidation Process Regulations (LP Regulations). The petitioner challenges the Impugned Circular, arguing that it effectively amends the LP Regulations retrospectively and is ultra vires the IBC. The petitioner contends that the circular changes the rules of the game after proceedings have

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## Issues and analysis

### Issue 1: Whether Paragraph 2.1 of the Impugned Circular, which defines 'Amount Realised', introduces new …

**Ratio:** The court finds that Paragraph 2.1 introduces a new standard that liquidation fees are

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**Reasoning:** The court reasons that the IBBI's interpretation of 'Amount Realised' is an overreach and

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**Interpretation:** The court interprets the term 'Amount Realised' in the context of the IBC and

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**Application:** The court applies the ratio to the specific facts of the case, finding that

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## Parties

- **Judges:** B. P. COLAB…; SOMASEKHAR…
- **Appellants:** Amit G…
- **Respondents:** Insolvency and…

## Timeline

- **2023-03-14 — First Show Cau…**: IBBI issued a Show Cause Notice to the…
- **2023-04-03 — Petitioner'…**: The Petitioner replied to…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 5(16) — Definitions](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-5)

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