IBBI Suspends Venkata Sivakumar for 3 Years: Jeypore Sugar ₹70 Lakh Transfer, Valuation Lapses
IBBI suspends Venkata Sivakumar, the insolvency professional who was liquidator of The Jeypore Sugar Company Limited, for three years. The Disciplinary Committee of the Insolvency and Bankruptcy Board of India, in Order No. IBBI/DC/351/2026 dated 9 November 2026, holds that he moved ₹70 lakh of the company's money into a fixed deposit in his own name after he had been replaced, left land once valued at ₹1,087.98 crore out of the liquidation estate, relied on a single valuer per asset class, filed a Section 230 scheme without secured creditors' consent, failed to preserve records and did not file relationship disclosures for consultants he engaged.
The order disposes of Show Cause Notice No. IBBI/C/2024/01059/1812/1355 dated 11 September 2025. Sivakumar holds registration No. IBBI/IPA-001/IP-P00184/2017-18/10852 and is a professional member of the Indian Institute of Insolvency Professionals of ICAI (IIIP-ICAI). The suspension is imposed under Section 220 of the Insolvency and Bankruptcy Code, 2016 read with Regulation 11 of the IP Regulations and Regulation 13 of the IBBI (Inspection and Investigation) Regulations, 2017. Under Section 206 of the Code he cannot continue his existing assignments. The order comes into force on the expiry of 30 days from its issue, which, counted from the order date, is 9 December 2026. The committee of Dr. Bhushan Kumar Sinha, Whole Time Member, and Jayanti Prasad, Chairperson, signed the order.
Jeypore Sugar CIRP and liquidation: how the case reached the IBBI
The National Company Law Tribunal, Chennai Bench admitted the corporate insolvency resolution process of Jeypore Sugar on 25 February 2019 under Section 7 of the Code on an application by IDBI Bank Limited. Sivakumar was appointed interim resolution professional and later confirmed as resolution professional. The tribunal ordered liquidation on 29 May 2020 and appointed him liquidator. On 1 July 2022 it replaced him with Subburengan Hari Karthik.
IDBI Bank complained to the IBBI on 18 January 2024. The Board appointed an investigating authority on 7 February 2024, and the authority served notice on 21 February 2024. Sivakumar was heard virtually on 12 August 2026 and filed further written submissions on 11 and 12 August 2026.
The committee upheld five sets of contraventions. The table sets out each finding, the main provisions applied and the defence that failed.
| Finding | Provisions held contravened | Defence raised | Why the committee rejected it |
|---|---|---|---|
| ₹70 lakh moved to a fixed deposit in his name on 5 July 2022 and a wrong upload date given to the investigator | Section 208(2)(a) and (e) of the Code; Regulation 7(2)(h) of the IP Regulations; Clauses 1, 2, 12 and 14 of the Code of Conduct | Removal order not pronounced in open court; he stayed in charge till 13 July 2022; money held in fiduciary capacity for liquidation costs | He knew the outcome by 5 July 2022; Regulations 2A and 44 do not let a liquidator move costs into his own account |
| Rayagada land excluded from the estate and fresh valuation done with one valuer per asset class | Sections 36(3)(e), 208(2)(a) and 208(2)(e) of the Code; Regulation 35(2) of the Liquidation Regulations; Regulation 7(2)(a) and (h) of the IP Regulations; Clause 14 | CoC chose nil value as the land belonged to the Odisha government; COVID-19 lockdown stopped the second valuer | NCLAT recorded that the zero value was not approved; valuers were appointed on 6 June 2020, when restrictions were being relaxed |
| Section 230 scheme moved without consent of 75% of secured creditors | Sections 35(1)(m), 208(2)(a) and 208(2)(e) of the Code; Section 230(2) of the Companies Act, 2013; Regulation 7(2)(a) and (h); Clause 14 | Creditor approval comes only after the tribunal convenes meetings | Section 230(2)(c) disclosure applies when the first motion is filed |
| Records not preserved and no point-wise reply to the investigator | Regulation 39A(3) of the CIRP Regulations; Regulation 45A(3) of the Liquidation Regulations; Regulation 7(2)(a) and (h); Clauses 16, 18 and 19 | Records were handed to the new liquidator; the investigator could check quarterly reports | The duty to preserve records is personal and survives handover |
| No relationship disclosure for marketing consultants | Circular No. IP/005/2018 dated 16 January 2018; Clauses 10 and 14 | No relationship with the consultants; forms filed with quarterly reports | Disclosure is required whether or not a relationship exists; no proof of filing |
The ₹70 lakh transfer on the day the removal order was uploaded
The replacement order of 1 July 2022 was uploaded on the tribunal's website on 5 July 2022, and the transfer to a fixed deposit in Sivakumar's name as liquidator took place the same day. Before the investigating authority he said the order was uploaded on 6 July 2022. The committee checked the tribunal's cause list for 1 July 2022 and the case proceedings tab, found the upload date was 5 July, and held that he made an incorrect and misleading statement to the investigator.
His own email of 5 July 2022, sent at 11:40 to the Secretary of the NCLT Principal Bench, weighed heavily. In it he wrote that he had been told "the pronouncement was opposite" and that "the news of removal has spread widely". The committee read this as proof that he knew the result before moving the money.
Sivakumar argued that Regulations 2A, 42 to 44 and 31A of the Liquidation Regulations allowed him to set aside liquidation costs, and that he had filed IA/802/2022 seeking directions on the amount. The committee said the rule that distribution cannot begin until liquidation costs are met gives no liquidator the right to transfer money to an account in his own name, least of all after replacement. IA/802/2022 had been adjourned sine die on 10 March 2023, and filing it did not authorise the transfer. In IA(IBC)/2353/CHE/2024, the tribunal on 18 February 2025 held that the money belonged to the estate, directed ICICI Bank to close the deposit and pay ₹70 lakh with interest to the new liquidator, and told Sivakumar to lodge any fee claim with his successor. His contempt petition against the new liquidator was dismissed on 11 September 2025. The committee added that placing the amount in a fixed deposit, and its later restoration, did not regularise the transfer.
Rayagada land worth ₹1,087.98 crore left out under Section 36(3)(e)
Jeypore Sugar owned sugar factories and land in Andhra Pradesh and a large parcel at Rayagada in Odisha. A registered valuer's report of 25 September 2019, prepared during the CIRP, valued the Rayagada land at ₹1,087.98 crore out of a total fair value of about ₹1,368.78 crore. After Sivakumar obtained an advocate's opinion that the land was under proceedings under the Odisha Land Reforms Act, stayed by the Orissa High Court, the valuer revised the report on 28 October 2019 and valued the Odisha assets at zero. The fresh valuation after liquidation did not take them up at all, and the asset memorandum filed on 21 September 2020 showed a realisable value of ₹217.52 crore without the Rayagada property.
Section 36(3)(e) of the Code puts "assets subject to the determination of ownership by the court or authority" inside the liquidation estate. The committee explained that a title dispute may affect value but cannot remove an asset from the estate or the asset memorandum. It relied on the NCLAT order of 16 January 2024 in Company Appeal (AT) (CH) (Ins) No. 302 of 2021, which took the same view and recorded that the zero valuation was not approved by the CoC or the stakeholders' consultation committee. Sivakumar's review application against that order was withdrawn on 28 March 2024, so it has attained finality. The committee also noted the Orissa High Court's order of 16 March 2022 in W.P.(C) No. 4490 of 2015 holding that the company had a right to compensation for its ceiling surplus land at Rayagada. Including assets in the estate, it said, is the liquidator's statutory duty and cannot be shifted to creditors.
Regulation 35(2): two registered valuers for each asset class
As it then stood, Regulation 35 of the Liquidation Regulations gave the liquidator a choice. He could use the average of values obtained during the CIRP under sub-regulation (1), or, if he thought a fresh valuation was needed, appoint two registered valuers within seven days of the liquidation commencement date under sub-regulation (2). The committee held that once a liquidator opts for fresh valuation, two valuers are mandatory, and because valuers are registered for specific asset classes, two are needed for each class.
Sivakumar's own relationship disclosures, filed with IIIP-ICAI on 21 December 2020, showed one valuer for land and building, R. Chandran, and one for plant and machinery, R. Santha Kumar, both appointed on 6 June 2020. He did not name a second valuer or produce a second report. The committee rejected the lockdown explanation: the national lockdown began on 25 March 2020, about two months before liquidation started on 29 May 2020, restrictions were being relaxed from 1 June 2020, and the asset memorandum came more than three months after the appointments. The 90-day window for a Section 230 compromise was also no reason to skip the second valuation, as the NCLAT had already said.
Section 230 scheme filed without secured creditors' prior consent
Regulation 2B of the Liquidation Regulations, as it then stood, required a compromise or arrangement to be completed within 90 days of the liquidation order. Sivakumar held talks with the stakeholders' consultation committee and lenders, shortlisted one proposal and filed a first motion under Section 230(1) of the Companies Act, 2013. The secured creditors, led by IDBI Bank, opposed it through IA/255/2021.
Section 230(2)(c) requires the applicant to disclose by affidavit "any scheme of corporate debt restructuring consented to by not less than seventy-five per cent. of the secured creditors in value". The committee read the past tense "consented" to mean that, where a scheme restructures debt, consent of secured creditors holding at least 75% by value must already exist when the first motion is filed. That requirement is separate from approval at the meetings later convened under Section 230(6). Minutes of the Joint Lenders' Forum and two rounds of negotiation showed consultation, not consent.
Records handed over are still the IP's responsibility
Regulation 39A(3) of the CIRP Regulations and Regulation 45A(3) of the Liquidation Regulations require a resolution professional and a liquidator to keep an electronic copy of all records for at least eight years and a physical copy for at least three years. The committee pointed to the Explanation to Regulation 39A(3), which applies the duty to the period the professional acted, even if he did not continue to the end. Sivakumar handed over charge in July 2022 and told the investigator in February 2024, within three years, that he had no physical records. He also gave no reason for not using the electronic copies he was bound to keep.
Over nearly eleven months and three specific requests, he never gave a point-wise reply to the complaint, and instead questioned the complainant's standing, the Ernst & Young forensic report and the decision to investigate. The committee held this breached Clauses 18 and 19 of the Code of Conduct on cooperating with investigations, and Clause 16 on contemporaneous records.
Relationship disclosures under Circular IP/005/2018
The IBBI circular of 16 January 2018 requires an insolvency professional to disclose to his agency the relationship, if any, of every professional he engages with himself, the corporate debtor, financial creditors, interim finance providers and prospective resolution applicants. The committee stressed that the disclosure is due whether or not a relationship exists. CMT & Associates approached Sivakumar on 13 July 2020 to act as marketing consultant for the sale of scrap at the Chagallu factory. CMT Corporate Care LLP, with China Masthan Talakayala as designated partner, was engaged from 3 June 2021 as strategic advisor on legal strategy, liaison with the Odisha government and marketing of the Rayagada land. NM Sarma and Associates was also engaged as marketing consultant. The disclosures he filed on 21 December 2020 covered valuers, the statutory auditor, the authorised representative and process advisors, but none of these consultants. Engagement letters, the committee said, are not disclosures.
Objections on IDBI Bank's standing and reasons under Section 218
Two of the preliminary objections will interest any professional facing a complaint. On standing, Section 217 lets "any person aggrieved" complain, and Regulation 2(1)(j) of the IBBI (Grievance and Complaint Handling Procedure) Regulations, 2017 defines a stakeholder to include a creditor. IDBI Bank remained a secured creditor whether or not it had relinquished its security interest, so it could complain.
On recording reasons, the committee held that Section 218(1) allows an investigation on two independent grounds: receipt of a complaint, or reasonable grounds to believe there has been a contravention. Where a complaint is received, it is itself the basis, and neither Section 218 nor the regulations require separate reasons. A criminal complaint Sivakumar filed against Board officers on this point, Crl. M.P. No. 1222 of 2025, had been dismissed on 1 April 2026.
The committee also held that none of the court orders he cited barred the proceedings. The Supreme Court's order of 22 October 2024 in Civil Appeal No. 1614 of 2023 set aside adverse findings only because he said he did not wish to continue as liquidator, without going into merits. The Madras High Court's stay of 6 June 2024 in W.P. No. 12409 of 2024 operates only on an earlier disciplinary order dated 9 April 2024 on a separate show cause notice of 3 July 2023. His writ against the present notice, W.P. No. 42727 of 2025, was disposed of on 25 November 2025 with liberty to raise all points before the Board.
Why the IBBI chose three years, and replacement in current assignments
Explaining the penalty, the committee noted that the excluded Rayagada asset had been valued at over ₹1,000 crore during the CIRP, about five times the ₹217.52 crore realisable value in the asset memorandum, and described the contraventions as "neither technical lapses nor isolated errors of judgement" but serious and repeated departures from a liquidator's core duties. The three-year term is longer than the one-year suspension the IBBI gave resolution professional Sanjay Borad over a ₹5 lakh monthly fee in the Golden Tobacco case and the two years imposed on Kannan Tiruvengadam for the BRG Iron & Steel private sale made without consulting the stakeholders' consultation committee.
A copy of the order goes to the CoC or stakeholders' consultation committee of every corporate debtor where Sivakumar is providing services, and those committees must take steps to replace him in accordance with law. Copies also go to IIIP-ICAI and the Registrar of the NCLT Principal Bench. Because the order, including the bar on continuing existing assignments, takes effect only 30 days after issue, these committees have that window to arrange a replacement.
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