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2019 (11) TMI 1474 - Tri - Insolvency and BankruptcyAppointment of Resolution Professional - Section 22(2) of the IBC, 2016 - HELD THAT - The COC simply disapproved the appointment of Mohd. Nazim Khan as IRP to RP and so far the appointment of Shri Ashok Kumar Juneja as Resolution Professional is concerned, it is resolved that the Chairman asked for copy of the consent of Mr. Ashok Kumar Juneja from the HDFC Bank who said that the consent would be provided by end of the day . We, further, find that there is no specific resolution on the point of change of IRP to Mr. Ashok Kumar Juneja as RP, rather, the COC has simply disapproved the appointment of Mohd. Nazim Khan, the IRP appointed, at the time of admission of the Application U/S 9 of the IBC, 2016 (IB) 889 (ND)/2019 on 08.08.2019. The prayer to confirm the appointment of Mr. Ashok Kumar Juneja as RP is concerned, is rejected. Thus, unless the specific resolution is passed under Section 22(2) of the IBC, 2016 by the COC by majority vote of not less than 66% of the voting shares of the Financial Creditor, the name of Mr. Ashok Kumar Juneja cannot be approved as Resolution Professional - we are unable to accept the prayer of HDFC Bank to appoint Mr. Ashok Kumar Juneja as Resolution Professional unless his appointment is approved by-majority vote of not less than 66% of the voting share of Financial Creditor.
Issues:
1. Application filed under Section 22(2) of the IBC, 2016 by HDFC Bank to replace the IRP with a new RP. 2. Opposition by the Operational Creditor to the replacement of IRP. 3. Interpretation of Section 22(2) of the IBC, 2016 and Rule 11 of NCLT Rules, 2016. 4. Analysis of the resolution passed by the COC regarding the replacement of IRP. Issue 1 - Application to Replace IRP with New RP: HDFC Bank filed an application under Section 22(2) of the IBC, 2016 seeking to appoint Mr. Ashok Kumar Juneja as the Resolution Professional (RP) in place of the existing Interim Resolution Professional (IRP), Mr. Mohd. Nazim Khan. The COC meeting disapproved the appointment of Mr. Khan as RP and HDFC Bank proposed Mr. Juneja as the replacement. However, the COC did not pass a specific resolution approving the replacement, leading to the Tribunal rejecting HDFC Bank's prayer to appoint Mr. Juneja as RP without the required majority vote of the COC. Issue 2 - Opposition by Operational Creditor: The Operational Creditor opposed the replacement of the IRP, arguing that Mr. Khan had performed well and that replacing him with a new RP would not be in the interest of justice. The Tribunal emphasized that the decision to confirm or replace the RP lies with the COC, which must pass a resolution with a majority vote of not less than 66% of the voting share of the Financial Creditor. Issue 3 - Interpretation of Section 22(2) of the IBC, 2016 and Rule 11 of NCLT Rules, 2016: The Tribunal analyzed Section 22(2) of the IBC, 2016, which empowers the COC to decide on the appointment or replacement of the RP by a majority vote. Rule 11 of NCLT Rules, 2016 was also considered, highlighting the Tribunal's inherent powers to ensure justice and prevent abuse of the Tribunal's process. Issue 4 - Analysis of COC Resolution on IRP Replacement: The Tribunal scrutinized the resolution passed by the COC, which disapproved Mr. Khan's appointment as RP but did not specifically approve Mr. Juneja as the replacement. Without the requisite majority vote confirming the new RP, the Tribunal ruled that HDFC Bank's request to appoint Mr. Juneja could not be accepted. The decision emphasized the importance of COC approval in such appointments under the IBC. In conclusion, the Tribunal rejected HDFC Bank's application to replace the IRP with a new RP due to the lack of a specific resolution by the COC approving the replacement. The judgment underscored the significance of COC decisions in appointing or replacing Resolution Professionals under the IBC, emphasizing the need for a majority vote to confirm such appointments.
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