IBBI Suspends Insolvency Professional for Two Years Over Invalid CoC Constitution and Unauthorized Reconstitution

The Disciplinary Committee of the Insolvency and Bankruptcy Board of India (IBBI) recently delivered a stringent order dated 30th March 2026, penalizing an Insolvency Professional (IP) for severe dereliction of duty. The disciplinary action highlights the critical importance of meticulous claim verification and adherence to statutory boundaries during the Corporate Insolvency Resolution Process (CIRP).

This comprehensive summary and analysis delves into the factual matrix, the alleged contraventions, the IP's defense, and the final verdict handed down by the IBBI Disciplinary Committee in the matter of Mr. Vishnu Kant Kabra, who served as the Resolution Professional (RP) for M/s. Bombay Infrastructure India Limited.

Factual Background of the CIRP

The National Company Law Tribunal (NCLT), Mumbai Bench, initiated the CIRP against the corporate debtor, M/s. Bombay Infrastructure India Limited, via an order dated 02.08.2023. This action was triggered by an application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 by an operational creditor, Millenium Enterprise.

Mr. Vishnu Kant Kabra was appointed as the Interim Resolution Professional (IRP) and was subsequently confirmed as the RP. Following his appointment, the IBBI received a formal complaint alleging significant procedural and statutory violations in the handling of the CIRP. After a preliminary examination of the IP's responses submitted across various dates in late 2024 and early 2025, the Board issued a Show Cause Notice (SCN) on 02.07.2025.

The SCN outlined multiple alleged contraventions of the Insolvency and Bankruptcy Code, 2016, the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations 2016, and the IBBI (Insolvency Professionals) Regulations, 2016.

Primary Allegation: Wrongful Constitution of the Committee of Creditors

The most severe allegation against the IP revolved around the improper formation of the Committee of Creditors (CoC).

The Inclusion of a Struck-Off Entity

Under Section 21(1) of the Insolvency and Bankruptcy Code, 2016, an IRP is mandated to collate all claims and determine the financial position of the corporate debtor before constituting the CoC. Furthermore, Section 21(2) explicitly states that the CoC must comprise all financial creditors. This is supported by Regulation 13(1) of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations 2016, which gives the IP a strict seven-day window to verify claims.