NCLAT Delhi Quashes Cancellation Of IP Deepak Goyal's Registration Over Disproportionate Penalty

The National Company Law Appellate Tribunal (NCLAT), Delhi, on 14 October, set aside the cancellation of insolvency professional Deepak Kumar Goyal's registration and remanded the matter to the Insolvency and Bankruptcy Board of India (IBBI) to reconsider the penalty for two established contraventions.

A Bench of Judicial Member Justice Mohd Faiz Alam Khan and Technical Member Naresh Salecha allowed Goyal's appeal against the Disciplinary Committee's order dated 20 August 2026. It held:

“...the maximum consequence available on the statutory spectrum under Regulation 13(3) is completely disproportionate to the two contraventions established on this record, each concerning the manner and completeness of the Appellant's discharge of representative and documentary functions, in circumstances devoid of any element of dishonesty, personal benefit, or demonstrated prejudice to any stakeholder”

The disciplinary action arose from Goyal's role as the Authorised Representative (AR) of homebuyers in the corporate insolvency resolution process (CIRP) of Revital Realty Pvt. Ltd. He represented nearly 1,428 homebuyers, accounting for 91% of the Committee of Creditors' (CoC) voting share.

The IBBI found two contraventions. First, Goyal failed to record proceedings and prepare minutes of meetings with the class of creditors, violating Regulation 16A(10)(i) of the CIRP Regulations. Second, he concurred with extensions of time for submitting revised resolution plans without obtaining prior instructions from the homebuyers, violating Section 25A(3) of the Insolvency and Bankruptcy Code, 2016.

On the first contravention, Goyal argued that contemporaneous emails, written summaries and communications with the Resolution Professional (RP) adequately recorded the meetings. He submitted that neither the Code nor the Regulations prescribed a specific format for minutes and that the absence of a separate formal minutes document or a titled “minutes register” did not amount to non-compliance.

He also stated that he had submitted a list of meetings and communications recording the substance of the discussions. He maintained that no homebuyer had been deprived of participation or prejudiced and denied suppressing or concealing any material information.

The IBBI argued that emails could not replace formal minutes and that the absence of a prescribed format did not dispense with the statutory obligation. It emphasised that proper documentation was essential for transparency and accountability, particularly when the AR represented 91% of the CoC's voting share.

On the second contravention, Goyal argued that his concurrence to extensions on 17 March 2026 and 19 March 2026 was necessitated by intervening circumstances, particularly the receipt of a claim from the Employees' Provident Fund Organisation (EPFO) that required incorporation into revised resolution plans.

He contended that the extensions were administrative measures rather than substantive commercial decisions favouring any particular prospective resolution applicant (PRA). He also argued that his concurrence neither approved nor rejected any resolution plan nor altered creditors' voting rights. Obtaining fresh instructions from 1,428 homebuyers within the available time, he submitted, would have been impractical.

The IBBI maintained that Section 25A(3) required the AR to act on prior instructions without exception, including for decisions considered procedural or administrative.

On Regulation 16A(10)(i), the Tribunal held that the obligation to “record proceedings and prepare minutes” was mandatory and distinct from reviewing the CoC's minutes. However, it noted that the Code and Regulations prescribed no specific form, template, register or signature requirement for recording proceedings.

It observed that although Goyal's emails captured certain concerns, they did not consistently record the participation of a sufficient number or representative cross-section of homebuyers. Such documentation was necessary to ensure that consultations reflected the views of the class of creditors.

Further, the Bench held that the contravention was established but amounted to incomplete documentation rather than an absence of consultation or concealment. On Section 25A(3), it emphasised the statutory requirement that an AR must “always act in accordance with prior instructions.” It observed:

“The word “always” is emphatic, and on a purely textual reading admits no carve-out for matters the AR may subjectively regard as procedural rather than substantive.”

The Tribunal also held that Goyal's concurrence to the extensions without prior consultation violated the provision. However, it noted the limited, time-bound and administrative nature of the extensions, which originated from the RP's request and were connected to a statutory EPFO claim. It said:

“We need to appreciate the narrow, time-bound, administrative character of the extension in its Resolution Professional-driven origin and further its connection to a statutory due claim of EPFO.”

On the penalty, the Bench applied the principle of proportionality, considering the absence of fraud, dishonesty, collusion, personal gain or demonstrated prejudice, along with Goyal's otherwise clean disciplinary record. It held that cancellation, the maximum consequence under Regulation 13(3) of the IBBI (Inspection and Investigation) Regulations, 2017, was disproportionate to the established contraventions.

Accordingly, the NCLAT remanded the matter to the IBBI to reconsider the penalty within 30 days and granted Goyal interim protection based on his undertaking not to accept fresh assignments during that period.

For Appellants: Senior Advocate Sunil Fernandes with Advocates Sandeep Bajaj, Devansh Jain, Shrishti Jeswani, Abhinav Aggarwal