IP Vivek Dabhade

  June 10, 2021

“A drunken mob was set loose upon us by the directors.”

 

(Mr. Dabhade is an Insolvency Professional based in Pune)

Can you tell us a little about yourself and your academic and professional background?

I’m a commerce graduate and a chartered accountant, practicing in Pune since 2010. My core area is income tax, project finance and accounting. I have handled many complex tax assessments, in addition to issuing ‘expert opinions’ on a variety of income tax issues.

 

How did you decide to become an IP?

I must acknowledge the role of my dear friend, late Mr. Pankaj Dhamane, in my becoming an IP. Mr. Dhamane was a company secretory in our firm and he advised my partner and me to appear for the exam. He took care of the necessary applications, procured the study material and spent time with us daily, motivating us and helping us prepare. He had a lot of faith in me, and I owe my qualification to him. He passed the exam twice. He was truly someone with great foresight.

I passed the Limited Insolvency Examination in May 2017 and was subsequently granted the certificate of membership as an Insolvency Professional in July 2017 (Regn. No. BBI/IPA-001/IP-P00306/2017-18/10570).

 

How many assignments (CIRPs and liquidations) have you undertaken so far? If permissible, could you share the names?

Since September 2017, we have filed more than 60 cases on behalf of OCs and have recovered more than 30 crores for them. I can frankly admit that earlier, IBC was used as recovery tool. Most of the cases we undertook resulted in recoveries, rather than resolutions.

We have also started a professional IBC consultancy practice. We advise many financial institutions, FCs and are also assisting in devising the system for the identification, arrangement and admissions.

Here I wish to point out something – working in the insolvency area needs a solid team. I have seen many individuals, who worked without a team to support them, land in difficulties. Thanks to a great team, our firm has handled 17 assignments so far.

 

How was your experience in the early days as an IP? What were some of the challenges you faced in your initial assignments?

Some of the challenges I faced were as follows:

  1. Taking the physical possession of the CD.
  2. Recording an inventory of the plant & machinery.
  3. Collection of data (financial & non-financial).
  4. The time provided by the Code to discharge all the functions proving to be inadequate at times.
  5. Communication by the RP and responses to it from the persons related to the suspended Directors of the CD.
  6. Non co-operation from the employees and the directors.
  7. Non co-operation from the COC.
  8. Authority versus Powers – Often, most of the time of a CIRP was spent in deciding the delineation of the authority and powers between the RP and the CoC.
  9. Litigations, and the cost of litigations on the IP during the CIRP, liquidation and thereafter.   No COC member is willing to bear any cost as soon as the CIRP/liquidation is over (but the litigations carry on long after).
  10. Engagement of the required professionals and getting the necessary output from the professionals in due time. The professionals tend to keep asking only for those documents till the last date, which the RP does not possess and cannot provide.
  11. Claim verification when the books of accounts and/or data is not made available by the CD.
  12. Forming opinions on PUEF, and subsequent filling of applications with NCLT and the orders thereupon.
  13. The tenure for completion of the Resolution Plan (when payments are deferred).
  14. Lack of co-operation from the govt offices, which function without taking due cognisance of the IBC.
  15. The electricity and water provision to a CD under insolvency and the restoration of their supply is highly difficult.

 

Which has been the most interesting/challenging/memorable assignment for you so far?

I have certainly had my fair share of memorable experiences.

  1. The suspended directors had set loose a drunken mob of farmers and employees upon us while visiting the factory premises for taking possession. We were attacked and threatened. They threatened us that we would be held hostage. One farmer climbed up the chimney tower and doused himself with kerosene and tried to burn himself alive. But we neither showed any fear nor paid any attention to their histrionics and attempted to have a rational dialogue with them instead. Our patience and persistence paid off, and in the end we were dropped off to our destination by the very same mob.
  2. Truck-loads of record of the CD was removed from the factory and was kept at a secret place.
  3. The company stock was stolen by one of the directors and a FIR had to be filed against him after conducting a panch-nama with the police and the sub-divisional officer.

 

What have been the unexpected parts of being an IP? How have you dealt with them?

Despite being professionals working to implement the law for all the stakeholders, there has often been a distinct lack of co-operation from various persons. We have tried to remedy that by –

  1. maintaining the highest level of confidentiality at all times, framing a thoroughly transparent process and ensuring the maximum involvement of the COC even where the Code is silent on many issues & matters;
  2. providing real-time information to the COC;
  3. seeking approvals from the COC in complex decisions, even when such approvals are not statutorily mandated.

 

How do you think the IBC has evolved so far? Where has it faltered, and where do you think it has a scope to do better?

Till date, the IBC has drastically evolved due to the various decisions of the Supreme Court. These help RPs/Liquidators to take the appropriate decisions.

That being said, an RP is a Court Officer and hence his powers should be increased so that he need not go to the AA for every single relief. The powers of other Court Officers should to be vested in him, which will help him discharge his duties efficiently.

Some changes that can be made in the provision of the IBC, as well as in other relevant acts, in my humble opinion –

  1. Immediate police protection to the IRP/RP, if required.
  2. Compulsory and timely furnishing of documents by the various persons.
  3. For the government  offices, the IRP/RP should be treated as a quasi-government officer or Court Officer and should be treated accordingly.
  4. Specific directions to the respective authorities to be given by the Master Circulars.

 

What advice do you have for the professionals considering becoming an IP?

Being an IP is a full-time profession, so my advice to all the upcoming IPs is to not engage in other activities which would hamper your assignments.

One needs to be equipped with the required knowledge, and learn finance as a core area.

Management skill is critical along with a prompt decision-making ability.

 

(This interview was conducted by Adv. Parth Indalkar and has been edited for clarity.)

 

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