IBBI Disciplinary Committee Suspends Insolvency Professional Shri Shankar B. Iyer for Three Months: A Detailed Analysis of Order No. IBBI/DC/319/2026
The Insolvency and Bankruptcy Board of India's Disciplinary Committee, through Order No. IBBI/DC/319/2026 dated 07 May 2026, imposed a three-month suspension on the registration of Insolvency Professional Shri Shankar B. Iyer (Registration No. IBBI/IPA-002/IP-N00615/2018-19/11850). The action was triggered by a pattern of serious procedural violations during the liquidation of a corporate debtor, encompassing grossly delayed filings, persistent reporting failures, and non-submission of mandatory liquidation forms. This order serves as a critical reminder to all insolvency professionals about the non-negotiable nature of statutory deadlines under the Insolvency and Bankruptcy Code, 2016 (IBC).
Background and Initiation of Disciplinary Proceedings
The Corporate Debtor and Appointment of Liquidator
The Corporate Insolvency Resolution Process (CIRP) of M/s Indiranagar Chit Funds and Trading Company Private Limited was initiated by the National Company Law Tribunal, Bengaluru Bench (hereinafter referred to as the Adjudicating Authority or AA), vide its order dated 28.01.2020, on an application filed by Rajendra P. under Section 9 of the Insolvency and Bankruptcy Code, 2016.
Following deliberations in its 4th meeting, the Committee of Creditors (CoC) resolved in favour of liquidation upon evaluating the assets and liabilities of the corporate debtor (CD). Accordingly, the AA ordered liquidation under Section 33 of the Code and appointed Shri Shankar B. Iyer as the Liquidator vide order dated 23.11.2020.
How the Disciplinary Process Was Set in Motion
The IBBI took cognizance of certain adverse observations recorded by the AA in its order dated 21.01.2025 against Shri Shankar B. Iyer. In response, the Board issued a communication dated 12.08.2025, seeking an explanation from him. Shri Shankar B. Iyer responded via emails dated 26.08.2025, 01.09.2025, and 04.09.2025.
Upon examining the AA's observations against the replies furnished, the Board formed a prima facie view that Shri Shankar B. Iyer had violated provisions of the Code and the regulations made thereunder. This led to the issuance of Show Cause Notice (SCN) No. COMP-11012/85/2025-IBBI-1830/1685 dated 27.10.2025. A response to the SCN was submitted by Shri Shankar B. Iyer on 25.11.2025, and the matter was placed before the Disciplinary Committee (DC). A personal hearing was conducted via virtual mode on 27.03.2026.
Alleged Contraventions: A Detailed Examination
Contravention I — Inordinate Delay in Filing Applications for Covid-Period Exclusion and Extension of Liquidation Period
Statutory Framework
Regulation 44 of the IBBI (Liquidation Process) Regulations, 2016 (hereinafter "Liquidation Regulations") mandates that a liquidator must complete the liquidation of a corporate debtor within one year from the Liquidation Commencement Date (LCD), regardless of any pending applications for avoidance of transactions. If liquidation cannot be completed within this period, the liquidator is required to approach the AA with an application to extend the liquidation timeline, accompanied by a report explaining the reasons for the delay and the additional time required.
Regulation 47A of the Liquidation Regulations further provides that the period of lockdown imposed by the Central Government in the wake of the Covid-19 outbreak shall be excluded from the computation of timelines for tasks that could not be completed due to such lockdown.