The National Company Law Tribunal (NCLT) has removed insolvency professional Narender Kumar Sharma from his position as interim resolution professional (IRP) for the stalled Festival City housing project in Sector 143B, Noida.
The tribunal appointed Sudhir Kumar Agarwal as the new IRP and directed Sharma to hand over all project-related papers, documents and other material obtained during his tenure.
Festival City is being developed by Anand Infoedge Pvt Ltd, Mist Avenue Pvt Ltd and Mist Direct Sales Pvt Ltd. The three companies are co-developers and corporate debtors involved in insolvency proceedings. Sharma was appointed IRP for the companies on July 19, 2024.
The NCLT’s decision followed a challenge to Sharma’s appointment over allegations concerning his Authorisation for Assignment (AFA) and disclosure of disciplinary proceedings. Under Regulation 7A of the Insolvency and Bankruptcy Board of India (IBBI) (Insolvency Professionals) Regulations, 2016, an insolvency professional cannot accept or undertake a new assignment without a valid AFA.
According to complainant and lawyer Shyam Kishan Saraf, Sharma had stated in an affidavit that his AFA was valid and that no investigation was pending against him when he accepted the assignment. Saraf alleged that Sharma did not hold a valid AFA on the appointment date and had not disclosed pending disciplinary proceedings and an investigation before the IBBI.
Following the petition, the NCLT cancelled Sharma’s appointment as IRP. The tribunal also ruled that expenses incurred during his tenure, including legal expenses, would not be included in the corporate insolvency resolution process (CIRP) costs and would have to be borne by Sharma.
Saraf said Sharma had accumulated fees of around Rs 1.4 crore over two years, based on a monthly fee of approximately Rs 6 lakh. The tribunal’s direction on expenses adds another financial consequence to the removal.
The development comes after regulatory action against Sharma. The IBBI suspended his registration for two years in June 2026 in connection with his role as resolution professional in the Indirapuram Habitat Centre project. Earlier, in July 2024, the IBBI disciplinary committee imposed penalties of Rs 2 lakh each in two matters involving his alleged failure to file an application relating to suspected fraudulent transactions during the insolvency process.
With Sudhir Kumar Agarwal now appointed as IRP, responsibility for the insolvency proceedings of the Festival City project has shifted to the new professional. Sharma has been directed to transfer the relevant records and materials to Agarwal, who will take forward the resolution process for the three corporate debtors.
