Sunil Kumar Agarwal, Resolution Professional Of Jayantilal Babulal Sanghvi vs State Bank Of India

The present appeal has been filed by the Appellant i.e., Sunil Kumar Agarwal, who is the Resolution Professional of Jayantilal Babulal Sanghvi (“Corporate Debtor”), under Section 61 of the Insolvency and Bankruptcy Code, 2016 (‘Code’) against the Order dated 04.02.2026 ("Impugned Order") passed by the National Company Law Tribunal, Ahmedabad Bench ("Adjudicating Authority") in IA No. 1901 of 2024 in Company Petition (IB) No. 99 of 2021.

State Bank of India, who is the Financial Creditor, is the Respondent herein.

The Appellant submitted that in the year 2021, the Respondent approached the Appellant and sought consent for appointment as Resolution Professional in connection with insolvency proceedings proposed against four personal guarantors of the same Corporate Debtor, namely Sanghvi Forging and Engineering Limited. The four proceedings included: (i) Mr. Jayantilal Babulal Sanghvi – CP(IB) No. 99 of 2021; (ii) Mr. Babulal Sagarmal Sanghvi – CP(IB) No. 93 of 2021; (iii) Mr. Naresh Babulal Sanghvi – CP(IB) No. 92 of 2021; and (iv) Mr. Vikram Babulal Sanghvi – CP(IB) No. 100 of 2021.

The Appellant submitted that before accepting the assignment, terms governing professional engagement were expressly discussed and agreed between the parties. Under the agreed arrangement, professional fees were fixed at Rs. 20,000/- per month per personal guarantor, payable from the date of appointment until admission of the concerned guarantor into the insolvency process. Additionally, aggregate professional fees of Rs. 14.80 Lakhs were fixed collectively for all four guarantors for the initial period following admission.

The Appellant submitted that relying upon the agreed terms and the appointment offered by the Respondent, the Appellant accepted the engagement and commenced discharge of responsibilities attached to the office of Resolution Professional. The Appellant contended that throughout the engagement, extensive professional services were rendered including preparation and filing of insolvency petitions, drafting and finalization of pleadings, management of litigation strategy, attendance before judicial forums, addressing objections and procedural requirements, maintaining stakeholder communications and ensuring overall compliance with obligations under the Code.

The Appellant submitted that the role performed was not confined to filing of petitions alone but extended to continuous administration and coordination throughout the insolvency process. The Appellant was also required to coordinate among creditors, monitor compliance requirements, prepare procedural documentation and address practical issues arising during conduct of proceedings.

The Appellant further submitted that invoices for professional services were periodically raised strictly in accordance with the agreed fee structure and transmitted to the Respondent. The Respondent accepted such invoices and released payments from time to time without raising any contemporaneous objection concerning either the entitlement of the Appellant or the basis of calculation.

The Appellant submitted that in furtherance of the engagement, a petition under Section 95 of the Code was filed against Mr. Jayantilal Babulal Sanghvi on 22.05.2021, which came to be registered on 16.06.2021. Pursuant thereto, the Adjudicating Authority directed the Appellant to submit a report under Section 99 of the Code. The Appellant submitted that in complete compliance with the directions issued, the Appellant submitted his report u/s 99 of the Code recommending initiation of insolvency proceedings against the Personal Guarantor and the same was accepted and taken on record by the Adjudicating Authority.

The Appellant contended that for the period commencing from 21.06.2021 until 15.04.2024, professional fees payable in relation to the proceedings concerning Mr. Jayantilal Babulal Sanghvi amounted to Rs. 7,97,680/-. Against the said amount, only Rs. 2,43,867/- was paid, leaving an unpaid balance of Rs. 5,53,813/- despite continued performance of professional responsibilities.

The Appellant further contended that by Order dated 16.04.2024, the Adjudicating Authority admitted the Personal Guarantor into insolvency and directed the Appellant to issue public notice and proceed further in accordance with law. Simultaneously, the Adjudicating Authority directed payment of Rs. 2,00,000/- towards fees and expenses incurred by the Appellant. The Appellant submitted that despite the aforesaid judicial direction, the Respondent failed to release the amount of Rs. 2,00,000/- and continued to withhold legitimate dues of the Appellant. The Appellant further submitted that on 22.05.2024, a joint meeting of creditors concerning all four guarantors was convened wherein the Appellant apprised the Committee of Creditors regarding pending professional fees and requested ratification of the same.

The Appellant submitted that while one of the creditors, namely Bank of Baroda, accepted and released its proportionate liability, the Respondent objected and contended that payment of Rs. 9,75,467/- already released during November 2021 to June 2022 exhausted all liability. The Appellant submitted that the Appellant clarified that the amount of Rs. 9,75,467/- exclusively related to services rendered during the pre-admission period for all four guarantors collectively and could not be treated as adjustment against continuing liabilities. The Appellant further submitted that subsequent email correspondence dated 31.05.2024, 03.06.2024, and 10.06.2024 clearly reflects that despite repeated explanations and clarifications furnished by the Appellant, the Respondent persisted in refusing payment.

The Appellant submitted that substantial expenditure was also incurred from personal resources to ensure uninterrupted conduct of the insolvency process and compliance with statutory requirements. The Appellant submitted that owing to persistent non-payment, the Appellant was constrained to file IA No. 1901 of 2024 seeking payment of Rs. 6,92,252.04/- in relation to insolvency proceedings concerning Mr. Jayantilal Sanghvi and aggregate pending fees of Rs. 28,29,581.26/- in respect of all connected proceedings. The Appellant further submitted that the Respondent contested the said application through reply dated 18.06.2025, following which pleadings stood completed.

The Appellant contended that thereafter the Adjudicating Authority by Orders dated 05.12.2025 and 10.12.2025 directed filing of written submissions. Importantly, neither order contained any requirement that written submissions be filed on affidavit. The Appellant submitted that in compliance with the aforesaid directions, written submissions were duly filed within the prescribed time and the same bore the Appellant’s signature and stamp on each page. The Appellant submitted that when the matter was listed on 04.02.2026, arguments had already concluded and the matter was listed only for reporting compliance concerning filing of written submissions.

The Appellant submitted that during hearing, Counsel on his behalf appearing virtually responded affirmatively to the query regarding filing of written submissions. The Appellant submitted that when a subsequent query arose regarding filing “by way of affidavit”, owing to technical disruption and continuation of the earlier exchange, an inadvertent response occurred; however, immediate clarification was furnished that no affidavit had been filed and that no such requirement existed. The Appellant submitted that the Impugned Order records only part of the exchange and omits the clarification furnished immediately thereafter, resulting in incorrect observations that “wrong submissions” had been made. The Appellant submitted that there exists no finding in the Impugned Order establishing deliberate falsehood, wilful suppression, intentional misconduct or abuse of process. No prejudice was caused to any stakeholder and proceedings were never obstructed.

The Appellant further submitted that the entire foundation of the Impugned Order is based upon a requirement never imposed by the Adjudicating Authority. In absence of any direction requiring filing by affidavit, no finding of non-compliance could legally arise. The Appellant submitted that the imposition of costs of Rs. 1,00,000/- is arbitrary, disproportionate and unsupported by the record. Further, the direction forwarding the Order to IBBI travels beyond the scope of proceedings, particularly when no issue of professional misconduct or regulatory breach arose for adjudication.

Concluding his arguments, the Appellant requested this Appellate Tribunal to set aside the Impugned Order and allow this appeal and quash the costs of Rs. 1,00,000/-, set aside the direction to forward the Order to IBBI and grant such other reliefs as deemed fit in the interests of justice.

Per contra, the Respondent–State Bank of India submitted that it is arrayed only as a formal party in the present Appeal and no substantive, direct or executable relief has been sought against the them in the present proceedings. The grievance raised by the Appellant pertains exclusively to the observations and directions issued by the Adjudicating Authority concerning imposition of costs and related consequential directions arising out of proceedings conducted before the Adjudicating Authority.

The Respondent submitted that the impugned direction relating to imposition of costs upon the Appellant/Resolution Professional was passed by the Adjudicating Authority in exercise of its judicial powers and discretion while conducting proceedings before it. The present Respondent has neither sought nor obtained any independent relief under the Impugned Order and no adjudication affecting any independent rights or liabilities of the Respondent arises in the present Appeal. In such circumstances, no independent cause of action survives against the Respondent–State Bank of India in the present proceedings. Accordingly, the Respondent requested this Appellate Tribunal to pass such order(s) as may be deemed fit and proper in the facts and circumstances of the case and in the interest of justice.

Findings

It is the case of the Appellant that the Impugned Order dated 04.02.2026 passed by the Adjudicating Authority in IA No. 1901 of 2024 in CP(IB) No. 99 of 2021 is perverse whereby costs of Rs.1,00,000/- was imposed upon the Appellant/Resolution Professional with further direction for forwarding a copy of the order to the IBBI on the ground that the written submissions filed by the Appellant were not supported by an affidavit and that wrong submissions had been made before the Adjudicating Authority. We note that the Adjudicating Authority observed that the written submissions had not been filed "by way of affidavit as directed", further observed that "wrong submissions" had been made before the Tribunal and also observed that the written submissions did not disclose as to who had filed the same. We find observations and consequential directions proceeded on basis of its earlier orders by the Adjudicating Authority dated 10.12.2025 and 05.12.2025. It has been brought out that written submissions, unless specifically directed, are not ordinarily required to be supported by an affidavit.

At this stage, we take into consideration both orders dated 05.12.2025 and 10.12.2025 passed by the Adjudicating Authority which read as under: -

From above, we find that order dated 05.12.2025 shows that the direction regarding filing of an affidavit was confined only to the issue concerning fees paid or unpaid by SBI to the Appellant. The said direction was specific and cannot be assumed more than this. Subsequently, on 10.12.2025, after hearing the parties, the Adjudicating Authority passed a separate direction governing filing of written submissions. The said subsequent direction merely required filing of written submissions within the specified page limit and did not require in any manner that such written submissions be filed by way of affidavit. Even assuming that both orders are read conjointly, no interpretation of the said orders would justify the conclusion that written submissions were required to be supported by an affidavit.

It has been pleaded that there exists no finding of wilful falsehood, suppression or professional misconduct attributable to the Appellant in any manner in the Impugned Order. We further take into consideration that the written submissions filed by the Appellant before the Adjudicating Authority bore the signature and stamp of the Appellant on every page, thereby clearly demonstrating authorization of the contents thereof. There seems neither concealment nor any attempt to mislead the Adjudicating Authority. In the absence of any finding regarding deliberate wrongdoing or intentional conduct, the conclusion that "wrong submissions" were made is unsupported by the record and cannot be sustained.

We also find that apart from imposing costs of Rs. 1 Lakh upon the Appellant, the Adjudicating Authority also directed to forward a copy of the Impugned order to IBBI. No issue concerning professional misconduct, disciplinary violation or regulatory breach have been have been discussed or commented upon by the Adjudicating Authority nor does the impugned order contain any adjudication on these issues. In the absence of any finding of professional misconduct or regulatory infraction, the direction to forward the order to IBBI are not justifiable.

It is noted that we had given the opportunity to the Respondent to file written submissions on their behalf. Following is the written submission: -

Thus, the Respondent does not have any grievances.

It seems that the impugned order is not in accordance with the record and proceeds upon an assumption that written submissions were directed to be filed by way of affidavit. The order dated 10.12.2025, passed after hearing arguments of all parties only directed both sides to file written submissions not exceeding two to three pages, within one week. The said order did not contain any stipulation requiring written submissions to be supported by an affidavit.

In view of the aforesaid facts and circumstances, the impugned order cannot be sustained and need to set aside to the extent it imposes Rs. 1 Lakh cost upon the Appellant, and also expunge the adverse observations concerning "wrong submissions" by the Adjudicating Authority in the Impugned Order. We also set aside the direction forwarding the matter to IBBI.

No order as to cost. IA, if any are closed.