IBBI Suspends RP Sanjay Borad for One Year Over ₹5 Lakh Monthly Fee Without CoC Approval
The Insolvency and Bankruptcy Board of India has suspended the registration of insolvency professional Sanjay Bulakichand Borad for one year for drawing a resolution professional fee of ₹5 lakh a month in the corporate insolvency resolution process of Golden Tobacco Limited without prior approval of the committee of creditors. The Disciplinary Committee order, No. IBBI/DC/348/2026 dated 21 October 2026, also directs him to deposit the excess fee he withdrew into the corporate debtor's bank account within 60 days.
The order turns on a narrow reading of Regulation 34B(2) of the CIRP Regulations, and it answers a question that comes up whenever a resolution professional is replaced midway: does the fee the CoC approved for the outgoing RP pass to the incoming one? The Committee's answer is no.
How the Golden Tobacco CIRP reached the fee dispute
The NCLT Ahmedabad Bench admitted Golden Tobacco Limited into CIRP by order dated 7 June 2022 on a Section 7 application filed by Arrow Engineering Limited. Vichitra Narayan Pathak was appointed interim resolution professional and later confirmed as RP. At the first CoC meeting on 7 July 2022, the committee approved a fee of ₹5 lakh a month for him.
By order dated 13 May 2024, the Adjudicating Authority replaced Pathak and appointed Borad as RP. That order also directed that expenses paid to the earlier RP be reviewed and stated that "The new RP will be paid according to IBBI guidelines during his tenure." The CoC's voting rights had been barred by an earlier order of 16 March 2023, and the 13 May 2024 order extended that bar. Appeals followed before the NCLAT, which on 30 May 2025 reinstated Pathak, and the matter later travelled to the Supreme Court in Civil Appeal No. 9509 of 2025.
Borad, who holds registration No. IBBI/IPA-003/00441/2023-2024/14324 and is a professional member of the Insolvency Professional Agency of the Institute of Cost Accountants of India, charged ₹5 lakh a month as RP, the same figure the CoC had approved for Pathak. The Board issued a show cause notice dated 4 December 2025; he replied on 25 December 2025 and was heard virtually on 21 August 2026.
Regulation 34B(2) and the ₹3 lakh minimum for the ₹500-2,500 crore band
Regulation 34B(2) applies to an IRP or RP appointed on or after 1 October 2022. It fixes a minimum monthly fee linked to the size of admitted claims, set out in the schedule to the CIRP Regulations, and its proviso allows the applicant or the committee to fix a higher fee for reasons to be recorded, considering factors such as market size and complexity.
In Golden Tobacco, the claims list dated 4 March 2024 showed admitted claims of about ₹1,556.20 crore. That places the case in the band above ₹500 crore and up to ₹2,500 crore, where the minimum fee is ₹3 lakh a month. Because Borad was appointed in May 2024, the regulation applied to him in full. Anything above ₹3 lakh needed a CoC decision with recorded reasons.
Why the predecessor's ₹5 lakh approval did not carry over
Borad's defence rested on four points. He said he had stepped into the shoes of the earlier RP, whose ₹5 lakh fee the CoC had already approved. He argued that Regulation 34B(2) prescribes only a floor, not a ceiling. He said no CoC meeting could be held during his tenure because of the bar on meetings and voting, so he could not have sought approval even if he wanted to. And he had filed an undertaking to refund any amount the CoC later declined to ratify, adding that he drew no fee until 24 January 2025 and no refund demand had been made.
The Committee rejected each of these. On the first, it held that the CoC's approval of 7 July 2022 was given for the erstwhile RP in the context of that appointment, and that the higher fee "is not a right that runs with the office." A new RP starts at the regulatory minimum unless the committee decides otherwise for him.
On the nature of the proviso, the Committee read it as requiring a prior, deliberate act by the CoC. It described the scheme as one of "prior sanction, not post-facto ratification." An RP cannot fix his own fee above the floor and wait for approval to catch up.
The stay on CoC meetings did not change that. The Committee accepted that no meeting could be convened, but held this could not be a ground to dispense with prior approval. The practical consequence is that an RP who cannot reach the CoC is confined to the minimum fee until he can, or until the Adjudicating Authority says otherwise.
The undertaking to refund fared no better. The Committee held that offering to return the money later does not substitute the requirement of the CoC's approval with recorded reasons.
What the NCLAT order of 24 January 2025 did and did not allow
Borad had gone to the NCLAT in IA No. 8546 of 2024 seeking, among other things, parity with the earlier RP's fee. The NCLAT's order of 24 January 2025 did not grant that prayer. It directed payment in terms of the Adjudicating Authority's 13 May 2024 order, made payments subject to ratification by the reconstituted CoC, and recorded his undertaking to refund. The Committee read this as a reaffirmation that the fee had to follow the IBBI guidelines under Regulation 34B(2), not as permission to draw ₹5 lakh.
The Committee therefore found that by withdrawing ₹5 lakh a month without prior CoC approval, Borad contravened Regulation 34B(2), the 13 May 2024 order of the Adjudicating Authority and the NCLAT order of 24 January 2025, along with Sections 208(2)(a) and 208(2)(e) of the Insolvency and Bankruptcy Code, 2016, Regulation 7(2)(a) and 7(2)(h) of the IP Regulations, and Clauses 1, 2 and 14 of the Code of Conduct.
The Aimgold LLP charge was dropped
The show cause notice also alleged that Borad failed to protect the corporate debtor's assets. A lease to Aimgold LLP had expired in June 2024 without renewal and the premises had not been vacated. His own status report of 18 March 2025 said invoices were pending from May 2024, that about ₹25-30 lakh a month had earlier been realised from the arrangement, and that roughly ₹3 crore went uncollected between May 2024 and February 2025. The charge invoked Sections 25(1), 25(2)(a) and 25(2)(b) of the Code.
The Committee was critical of his explanations, calling his responses "inconsistent, contradictory and misleading." It nevertheless accepted his account on the merits. Records were handed over by the earlier RP only around mid-November 2024; the NCLAT had restricted him to statutory compliances; and he had approached the NCLAT in IA No. 8546 of 2024 for powers under Section 18 and approval to raise invoices, which was not expressly granted. Seeking those directions counted as an effective step, and no contravention was recorded on this charge.
Refund of the excess fee: an illustration
The order does not state the total amount Borad must deposit or the months for which he drew the fee. The monthly excess, however, follows directly from the figures in the order.
Illustration (assumed period): the fee drawn was ₹5,00,000 a month against a minimum of ₹3,00,000, so the excess is ₹2,00,000 a month. If an RP in this position had drawn the higher fee for 10 months, the amount to be deposited would be ₹2,00,000 × 10 = ₹20,00,000. The actual figure depends on the withdrawal record, which the order leaves to be worked out from the accounts of the corporate debtor.
Effective date and the 60-day deposit window
The suspension is imposed under Section 220 of the Code read with Regulation 13 of the IBBI (Inspection and Investigation) Regulations, 2017. Under the order, it takes effect on the expiry of 30 days from issue, which works out to 20 November 2026. The 60-day period for depositing the excess fee, counted from 21 October 2026, runs to about 20 December 2026. A copy of the order goes to his IPA and to the Registrar of the NCLT Principal Bench.
For RPs who take over a running CIRP, the order is a reminder that the fee approved for a predecessor is a decision about that person, not about the post. Where the CoC cannot meet, the safe course on this reading is to draw only the Regulation 34B(2) minimum and seek either a CoC decision or a specific direction from the Adjudicating Authority before charging more. The Board has taken a similar line on prior consultation in other disciplinary matters, including its order suspending liquidator Kannan Tiruvengadam for two years over the BRG Iron & Steel private sale without first consulting the stakeholders' committee.
The underlying insolvency remains pending before the Supreme Court in Civil Appeal No. 9509 of 2025, which on 18 August 2025 stayed further proceedings before the Adjudicating Authority; the Adjudicating Authority's order of 27 July 2026 adjourned the matter to 21 October 2026, the same day the disciplinary order was issued.
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