Authorisation for Assignement
A. Meaning of Authorisation for assignment
As per Regulation 2(aa) of the IBBI (IP) Regulations “authorisation for assignment” means an authorisation to undertake an assignment, issued by an Insolvency Professional Agency (Agency) to an insolvency professional, who is its professional member, in accordance with its bye-laws.
B. When ineligible to undertake an Assignment
1. Regulation 7A of the IBBI (IP) Regulations states that an insolvency professional shall not accept or undertake an assignment after 31st December 2019 unless he holds a valid authorisation for assignment on the date of such acceptance or commencement of such assignment, as the case may be:
Provided that provisions of this regulation shall not apply to an assignment which an insolvency professional is undertaking as on-
- (a) 31st December 2019; or
- (b) the date of expiry of his authorisation for assignment.
In view of the above provision an insolvency professional shall not accept or undertake any assignment as interim resolution professional, resolution professional, liquidator, bankruptcy trustee, authorised representative or in any other role under the Insolvency and bankruptcy Code, 2016 unless he holds an ‘Authorisation for Assignment’ issued by his Insolvency Professional Agency. This is effective from 1st January 2020.
2. Regulation 23 of the IBBI (IP) Regulations states that an insolvency professional must not engage in any employment when he holds a valid authorisation for assignment or when he is undertaking an assignment.
In view of the above provision an insolvency professional shall not engage in any employment when he holds an Authorisation for Assignment or when he is undertaking an assignment. This would enable an individual to seek registration as an insolvency professional even when he is in employment. He must, however, discontinue employment when he wishes to have an Authorisation for Assignment. He may surrender Authorisation for Assignment when he wishes to take up employment
C. Eligibility to obtain an Authorisation for Assignment
As per Clause 12A(2) of the Model Bye-laws a professional member shall be eligible to obtain an authorisation for assignment, if he –
- (a) is registered with the Board as an insolvency professional;
- (b) is a fit and proper person in terms of the Explanation to clause (g) of regulation 4 of the Insolvency and Bankruptcy Board of India (Insolvency Professionals) Regulations, 2016;
- (c) is not in employment;
- (d) is not debarred by any direction or order of the Agency or the Board;
- (e) has not attained the age of seventy years;
- (f) has no disciplinary proceeding pending against him before the Agency or the Board;
- (g) complies with requirements, as on the date of application, with respect to-
- i. payment of fee to the Agency and the Board;
- ii. filings and disclosures to the Agency and the Board;
- iii. continuous professional education; and
- iv. other requirements, as stipulated under the Code, regulations, circulars, directions or guidelines issued by the Agency and the Board, from time to time.
D. Application for Issue or Renew of an Authorisation for Assignment
Clause 12A(1) of the Model Bye-laws provides that the Insolvency Professional Agency, on an application by its professional member, may issue or renew an authorisation for assignment.
Clause 12A(3) of the Model Bye-laws provides that an application for issue or renewal of an authorisation for assignment, shall be in such form, manner and with such fee, as may be provided by the Agency. Provided that 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.
E. Procedure to Issue Authorisation of Assignment
- • The Agency shall consider the application in accordance with the bye-laws and either issue or renew, as the case may be, an authorisation for assignment to the professional member in Form B or reject the application with a reasoned order. [Clause 12A(4) of the Model Bye-laws]
- • If the authorisation for assignment is not issued, renewed or rejected by the Agency within fifteen days of the date of receipt of application, the authorisation shall be deemed to have been issued or renewed, as the case may be, by the Agency. [Clause 12A(5) of the Model Bye-laws]
- • An authorisation for assignment issued or renewed by the Agency shall be valid for a period of one year from the date of its issuance or renewal, as the case may be, or till the date on which the professional member attains the age of seventy years, whichever is earlier. [Clause 12A(6) of the Model Bye-laws]
F. Appeal against the order of Rejection to Issue Authorisation of Assignment
- • An applicant aggrieved of an order of rejection of his application by the Agency may appeal to the Membership Committee within seven days from the date of receipt of the order. [Clause 12A(7) of the Model Bye-laws]
- • The Membership Committee shall pass an order disposing of the appeal by a reasoned order, within fifteen days of the date of receipt of the appeal. [Clause 12A(8) of the Model Bye-laws]
G. Surrender of Authorisation for Assignment
- • Clause 26(1) of the Model Bye-laws provides that a professional member shall make an application to surrender his authorisation for assignment to the Agency at least thirty days before he –
- (a) becomes a person resident outside India;
- (b) takes up an employment; or
- (c) starts any business, except as specifically permitted under the Code of Conduct,
Upon acceptance of such surrender, the same shall be intimated to the Board by the IPA within one working day of acceptance of surrender.
- • Clause 26(2) of the Model Bye-laws provides that no application for surrender of authorisation for assignments shall be accepted by the Agency, if –
- (a) the authorisation for assignment has been suspended;
- (b) an assignment is continuing; or
- (c) name of the professional member is included in any panel prepared by the Board for undertaking assignment.