Ineligibility of IPs for submitting EOIs

On 01.06.2021, IBBI published a circular bearing File No. IP-12011/1/2020-IBBI wherein an Insolvency Professional ("IP") may submit his EOI to be included in the panel selected by the NCLT for allotment of assignments. To be included in this panel, the IP must submit the EOI on the IBBI web-portal.

However, IPs who did not have a valid AFA till 31.12.2021 will not be allowed to submit the EOI.

Error message: "You are not eligible to apply for EOI as your AFA is not valid till 31-DEC-2021"

As per the Insolvency and Bankruptcy Board of India (Model Bye-Laws and Governing Board of Insolvency Professional Agencies) Regulations, 2019, u/r 12A(3), “an application for renewal of an authorisation for assignment shall be made any time before the date of expiry of the authorisation, but not earlier than forty-five days before the date of expiry of the authorisation.” The same has been adopted by all 3 IPAs.

Hence, IPs whose AFA is expiring during July-December 2021, will not be allowed to submit the EOI on the IBBI web portal. In fact, IPs whose AFA renewal falls during July-December every year will never be eligible to submit their EOIs for the June-December cycle. The same happens if an AFA renewal falls during February-June where he will be ineligible to submit the EOI for the January-June cycle.

As of 06.06.2021, there are 1,452 IPs registered with the Board whose AFA expires during 01.07.2021 to 30.12.2021. As per IBBI rules, these IPs will not be able to submit their EOI for the July-December cycle.

AFA expiring on	No. of IPs
Jul 2021	44
Aug 2021	43
Sep 2021	32
Oct 2021	28
Nov 2021	300
01.12.2021-30.12.2021	1005
Sub-total	1,452
31.12.2021	18
Jan 2021	190
Feb 2021	129
Mar 2021	125
Apr 2021	177
May 2021	109
Jun 2021	13
Total	2,213

U/r 7A of the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016 (“IP Regulations”), an IP needs to hold “a valid authorisation for assignment on the date of such acceptance or commencement of such assignment, as the case may be.” The EOI is a submission for acceptance of a potential assignment and my AFA is valid as on the date of submission of such acceptance. Hence there should not be any problem to be considered eligible to submit the EOI.

As per the Press Release dt. 23.07.2019 bearing No. IBBI/PR/2019/19, Para 2(b), the AFA "enables an individual to seek registration as an IP even when he is in employment". Hindering in obtaining assignments for never the intent of the AFA. Many practicing IPs have left full time employment to practice the Insolvency profession and AFA is renewed as a matter of routine as per prescribed timelines. Denying opportunities due to such bureaucratic red-tapism, is against the spirit and concept of the profession.

We request IBBI to rectify this error which threatens our livelihood and allow the IPs, including myself, bearing a valid AFA to apply for the EOI. In all fairness, the NCLT may check the AFA of an IP at the time of allotment of an assignment, which is freely accessible on the IBBI website.