IBC Section 201: Registration of insolvency professional agency

Section 201 of Insolvency and Bankruptcy Code, 2016: Registration of insolvency professional agency

Official Bare Act Text

Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment Limitation Monetary

(1) Every application for registration shall be made to the Board in such form and manner, containing such particulars, and accompanied by such fee, as may be specified by regulations:

Provided that every application received by the Board shall be acknowledged within seven days of its receipt.

(2) On receipt of the application under sub-section (1), the Board may, on being satisfied that the application conforms with all requirements specified under sub-section (1), grant a certificate of registration to the applicant or else, reject, by order, such application:

Provided that no order rejecting the application shall be made without giving an opportunity of being heard to the applicant:

Provided further that every order so made shall be communicated to the applicant within a period of fifteen days.

(3) The Board may issue a certificate of registration to the applicant in such form and manner and subject to such terms and conditions as may be specified.

(4) The Board may renew the certificate of registration from time to time in such manner and on payment of such fee as may be specified.

(5) The Board may, by order, suspend or cancel the certificate of registration granted to an insolvency professional agency on any of the following grounds, namely:-

(a) that it has obtained registration by making a false statement or misrepresentation or by any other unlawful means;

(b) that it has failed to comply with the requirements of the regulations made by the Board or bye-laws made by the insolvency professional agency;

(c) that it has contravened any of the provisions of the Act or the rules or the regulations made thereunder;

(d) on any other ground as may be specified by regulations:

Provided that no order shall be made under this sub-section unless the insolvency professional agency concerned has been given a reasonable opportunity of being heard:

Provided further that no such order shall be passed by any member except whole-time members of the Board.

Legal Commentary & Landmark Judgments: Section 201

Section 201 prescribes the detailed statutory procedure for the application, scrutiny, grant, and renewal of registration of an Insolvency Professional Agency.

Application for Registration: An application for registration as an IPA must be submitted in the prescribed form accompanied by statutory fees and institutional documents.
Scrutiny and Clarification: The Board may require the applicant to furnish further information or clarifications within a specified timeframe.
Grant or Rejection: The Board issues a certificate of registration on being satisfied, or rejects the application after affording the applicant a reasonable opportunity of being heard.

Key Landmark Precedents:

Swiss Ribbons Pvt. Ltd. v. Union of India (2019) 4 SCC 17: The Supreme Court affirmed that the transparent licensing procedure under Section 201 establishes rigorous institutional barriers against unequipped applicants.
Innoventive Industries Ltd. v. ICICI Bank (2018) 1 SCC 407: Noted that quasi-judicial decisions granting or refusing licenses under the Code must adhere strictly to fair hearing standards.

Courtroom Practice & Strategic Litigation Guidance:

In the event of an adverse proposed order under Section 201(4), the applicant must seek an oral personal hearing before the Board and file written submissions addressing every deficiency notice.