IBBI Suspends Anurag Jain for Two Years Over ₹1 Crore Related-Party Interim Finance and Section 12A Lapses
The Insolvency and Bankruptcy Board of India (IBBI) has suspended insolvency professional Anurag Jain for two years after finding serious compliance failures in the corporate insolvency resolution process (CIRP) of Orient Tourism Private Limited. The order, IBBI/DC/344/2026 dated September 8, 2026, examines a ₹1 crore interim-finance arrangement with a company in which Jain was himself a director, the use of part of those funds toward professional fees, and a failed attempt to withdraw the CIRP under Section 12A of the Insolvency and Bankruptcy Code.
Orient Tourism CIRP and the disciplinary proceedings
The CIRP of Orient Tourism Private Limited commenced on September 17, 2019. Anurag Jain was first appointed interim resolution professional and thereafter continued as resolution professional. IBBI initiated disciplinary scrutiny after adverse observations emerged from appellate proceedings, including observations of the National Company Law Appellate Tribunal in January 2026.
The Board issued a show-cause notice on July 7, 2026 and conducted a hearing on August 31, 2026. The disciplinary committee's final order addresses both conflict-of-interest concerns and failures to follow the approval framework laid down in the Code and CIRP Regulations.
₹1 crore interim finance came from a company linked to the RP
One of the central findings concerns interim finance of ₹1 crore raised from Resolve Support Services Private Limited. The order records that Jain was a director of that lender company. IBBI found that the borrowing was undertaken without obtaining the prior approval of the committee of creditors required for raising interim finance under the applicable provisions, including Sections 25(2)(c) and 28(1)(a) of the Code.
The conflict issue was aggravated by the use of the borrowed money. The disciplinary order records that a substantial portion was used to pay fees connected with Jain's own professional services and the services of a legal professional who was also associated with the lender company. IBBI noted that these fee payments were not properly placed before the committee of creditors for the necessary approval or ratification.
For practitioners, the lesson is broader than the identity of the lender. Interim finance is not simply a treasury decision of the resolution professional. Where the Code requires prior CoC approval, the approval must exist before the transaction is entered into. A related-party or connected-person relationship also raises an additional need for transparent disclosure, documented conflict management and a clear demonstration that the transaction is in the interests of the CIRP.
Section 12A withdrawal attempt failed on mandatory security requirement
The order also revisits the attempted withdrawal of the insolvency case under Section 12A. Under Regulation 30A, the withdrawal process requires the prescribed application and, depending on the stage of the CIRP, security for estimated insolvency-resolution costs through the stipulated bank guarantee or demand draft mechanism.
IBBI found that the application in this case was not accompanied by the mandatory bank guarantee or demand draft. A post-dated cheque was offered instead, but the disciplinary committee treated that as non-compliance rather than an equivalent substitute. The withdrawal application was ultimately dismissed.
The consequences were not merely technical. The order notes that the period from November 6, 2019 to January 8, 2021 had to be excluded from the CIRP timeline, contributing to delay and additional process cost. This is a useful compliance warning for CAs and insolvency teams advising on settlements: once parties choose the statutory Section 12A route, the prescribed documentary and security requirements should be treated as mandatory unless a competent court or tribunal directs otherwise.
Two-year suspension and replacement from current assignments
IBBI ordered suspension of Jain's registration for two years. The order states that he will not be eligible to continue existing insolvency assignments during the suspension period. As with the companion disciplinary directions issued by IBBI, the order is to take effect 30 days after its date, allowing the committees of creditors in ongoing matters to take steps for replacement.
Copies of the order are also to be sent to the Indian Institute of Insolvency Professionals of ICAI and to the relevant National Company Law Tribunal benches.
Compliance takeaways for resolution professionals and finance teams
- Get CoC approval before raising interim finance when the Code requires prior approval; post-facto disclosure is not a substitute.
- Disclose connected-party relationships clearly and document conflict-management safeguards, especially where an RP or an associated professional has a link with the lender or service provider.
- Place professional-fee payments before the CoC in the manner required by the Code, regulations and approved process-cost framework.
- Follow Regulation 30A literally when seeking Section 12A withdrawal, including the prescribed form and security for CIRP costs.
- Track procedural delay as a cost risk: defective withdrawal attempts can prolong the CIRP and create avoidable process expense.
The order is a strong reminder that insolvency professionals exercise fiduciary-like responsibilities under a tightly supervised statutory process. Independence, prior approvals and strict procedural compliance are central to the role. The complete findings are available in the official IBBI disciplinary order.
Official source: View the official source document
Key takeaway
IBBI has suspended insolvency professional Anurag Jain for two years over a ₹1 crore interim-finance transaction with a company in which he was a director, fee-related conflicts and non-compliance with the Section 12A withdrawal process in the Orient Tourism CIRP.
