Why IPA’s are better suited to adjudicate disciplinary cases?

 Balance between market obligations and statutory obligations

 Better suited to realize the best practice adopted by an IP
 Reputation of the IPA is paramount and hence there is a reason to ensure competitive IPs
 Finance committee is satisfied with IPA’s
 Structure of IPA’s require 50% ID’s
 6-month limitation would ensure timely resolution

Need for declaring the 14 situations?

 Codified norms on best practices that an IP can adopt

 Reiteration of previously decided cases
 AA now has clarity on what are the reasons for the imposition of penalties

Proportionality of quantum of punishment

 Comparison with other professions where a high amount of due care is to be exercised
 No upper cap is beneficial for better competitive practices among Ips
o Limited number of cases would be taken up by Ips
o Remaining cases would require distribution among existing Ips
 Timely decision ensures better liquidity for companies
 25% of fees has been decided in many cases by IBBI
 Balance between

Rectification of pre-existing mechanism

 Dual approach by IBBI and IPA’s is to be replaced with IPA’s taking up the primary role for
adjudicating disciplinary cases
 Arbitrariness in approach is now rectified with specific punishment

Barrier on entry of unqualified IPs

 Success rate of IPs in Limited Insolvency Exam is high in comparison to other competitive
professions
 Training requirements are essentially low
 Check through compensatory provision
 Market demand for good IPs is maintained

Comparison with other countries

 Would ultimately result in increase in Rank in Resolving Insolvency and Ease of doing
business