CS Professional · Corporate Restructuring, Valuation and Insolvency · Insolvency
An insolvency professional agency registered with the Board failed to comply with the Board's regulations on the composition of its governing board. The Board proposes to cancel its certificate of registration. Which statement is correct under the Code?
The Board may cancel or suspend the registration for failing to comply with its regulations, but only after giving the agency a reasonable opportunity of being heard, and the order cannot be passed by anyone other than whole-time members of the Board.
- AThe Board may cancel the registration after giving a reasonable opportunity of being heard, and the order cannot be passed by any member other than whole-time membersCorrect
- BThe Board may cancel it without hearing because non-compliance with regulations is an automatic ground
- CAny member of the Board may pass the cancellation order after a hearing
- DThe Board cannot cancel registration for non-compliance with regulations, only for false statements at the time of application
Explanation
Section 201(5)(b) makes failure to comply with the Board's regulations or the agency's bye-laws a ground for suspension or cancellation. A reasonable opportunity of being heard is mandatory, and the second proviso bars any member other than whole-time members from passing the order. Cancellation is not limited to false statements, which is only ground (a).
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