IBBI Disciplinary Committee Order in Re: Dushyant C. Dave, Insolvency Professional

The Insolvency and Bankruptcy Board of India, through its Disciplinary Committee, in its order dated 30 March 2026, imposed a three-year suspension on Insolvency Professional Dushyant C. Dave for serious procedural and ethical violations in the CIRP of Altius Digital Private Limited. The order marks a stringent enforcement of statutory discipline, particularly in relation to claim verification and constitution of the Committee of Creditors under the Insolvency and Bankruptcy Code, 2016.

Allegations and CIRP Context

The CIRP commenced on 19 December 2023, with Mr. Dave acting as Interim Resolution Professional. The core allegations revolved around delayed and incomplete verification of claims, premature constitution and reconstitution of the CoC, and inconsistent disclosures made before the Adjudicating Authority and the CoC. The Disciplinary Committee found that claims of operational creditors remained under verification well beyond the statutory timeline of seven days, yet the IRP proceeded to constitute the CoC and convene meetings where critical decisions were taken.

Further, the IRP admitted a financial creditor, Asha Apartments Pvt. Ltd., into the CoC and assigned it 100 percent voting share despite the claim being under verification and the admitted amount recorded as nil. The Committee rejected the defence that only the “amount” of the claim was under verification, holding that verification of the claim itself remained incomplete. The reliance on Regulation 14 to justify provisional admission was found to be misplaced, as the provision applies only to estimation of claim amounts and not to the foundational determination of claim validity.

Findings and Regulatory Implications

The Disciplinary Committee concluded that the premature constitution of the CoC on the basis of unverified claims undermined the statutory framework of Section 21, which requires collation and verification of claims prior to CoC formation. It further held that assigning voting rights on unverified claims distorts the decision-making process and compromises the integrity of the insolvency regime. The subsequent rejection of the financial creditor’s claim by the incoming Resolution Professional and the Adjudicating Authority reinforced the conclusion that the initial admission was legally untenable. Additionally, the Committee found material inconsistency in the IRP’s statements. While filings before the Adjudicating Authority indicated that claims had been verified and admitted, minutes of CoC meetings simultaneously recorded them as under verification. This contradiction was held to violate the duty of transparency and accuracy under the Code of Conduct, raising concerns regarding neutrality and impartiality.

In view of these cumulative violations, the Disciplinary Committee exercised its powers under Section 220 of the Code and suspended the registration of the Insolvency Professional for three years. The order underscores that claim verification is not a procedural formality but the foundation of creditor rights and voting structure, and any deviation from this requirement strikes at the core of the insolvency framework.