Noida: National Company Law Tribunal (NCLT) has removed insolvency professional Narender Kumar Sharma as the interim resolution professional (IRP) for the stalled Festival City housing project in Sector 143B, after finding that he had failed to disclose disciplinary proceedings and allegedly accepted the assignment without a valid authorisation.The tribunal has appointed Sudhir Kumar Agarwal as the new IRP and directed Sharma to hand over all papers, documents and other material that came into his possession during his tenure.Festival City is being developed by three companies — Anand Infoedge Pvt Ltd, Mist Avenue Pvt Ltd and Mist Direct Sales Pvt Ltd — which are co-developers and corporate debtors in the insolvency proceedings. Sharma was appointed IRP for the three companies on July 19, 2024.Under insolvency regulations, an insolvency professional accepting an assignment is required to hold a valid Authorisation for Assignment (AFA), issued by the Insolvency Professional Agency with which the professional is enrolled. The professional is also required to submit a compliance affidavit and disclose whether any investigation or disciplinary proceedings are pending.According to complainant and lawyer Shyam Kishan Saraf, Sharma submitted an affidavit stating that his AFA was valid and that no investigation was pending against him when he took up the assignment.Saraf alleged that Sharma did not have a valid AFA on the date of his appointment and concealed the fact that disciplinary proceedings and an investigation were pending against him before the Insolvency and Bankruptcy Board of India (IBBI). “He also gave a false affidavit before the NCLT that no investigations were pending against him, whereas he was facing disciplinary proceedings and an investigation was pending,” Saraf said.Regulation 7A of the IBBI (Insolvency Professionals) Regulations, 2016, bars an insolvency professional from accepting or undertaking a new assignment without a valid AFA. The requirement applies to assignments accepted from Jan 1, 2020.Following a petition challenging Sharma’s appointment, the NCLT on Wednesday cancelled his appointment as IRP. Saraf said Sharma had accumulated fees of about Rs 1.4 crore over the past two years, at a rate of Rs 6 lakh a month. The tribunal held that expenses incurred during Sharma’s tenure, including legal fees, would not form part of the corporate insolvency resolution process (CIRP) cost and would have to be borne by Sharma.The order comes months after the IBBI suspended Sharma’s registration for two years in connection with his role as resolution professional in the Indirapuram Habitat Centre project. The suspension order was issued on June 10, 2026. Sharma had also faced disciplinary action earlier. In July 2024, the IBBI’s disciplinary committee imposed penalties of Rs 2 lakh each on him in two cases over his failure to file an application concerning alleged fraudulent transactions linked to the Indirapuram Habitat Centre insolvency process.
