2019 (8) TMI 1871 - AT - Insolvency and Bankruptcy

Question on performance of Resolution Professional - Eight orders filed by the Resolution Professional was taken up 8 times but no order was passed by the Adjudicating Authority - it is the case that the Adjudicating Authority has wrongly made the observations that no serious effort was made by the Resolution Professional - HELD THAT - It is found that when the LA. was listed before the Adjudicating Authority no order was passed by the Adjudicating Authority on the mentioned dates and as such no observation can be made against the performance of the Resolution Professional. Appeal allowed.

Summary

Issues:
1. Approval of resolution plan by Adjudicating Authority
2. Observations made against the Resolution Professional
3. Allegations related to transactions under specific sections
4. Role of Committee of Creditors (CoC) in approving resolution plan
5. Disposal of application by Adjudicating Authority

Analysis:
1. The appeal was filed by the Resolution Professional against the order of the Adjudicating Authority approving the resolution plan. The Adjudicating Authority had made observations against the Resolution Professional regarding the disposal of an application related to transactions under specific sections of the law.

2. The Adjudicating Authority noted that the Resolution Professional had not been diligent in pressing for an order on the application, which raised concerns about the eligibility of a resolution applicant under Section 29A(g). The Adjudicating Authority also highlighted the Committee of Creditors' decision to approve the resolution plan despite allegations against the promoters of the Corporate Debtor.

3. The Resolution Professional argued that the application had been taken up multiple times by the Adjudicating Authority, but no order was passed. The Appellate Tribunal agreed with the Resolution Professional, stating that no order was passed on the listed dates, thereby rejecting the observations made against the Resolution Professional.

4. Considering the facts presented, the Appellate Tribunal set aside the observations made against the Resolution Professional in the impugned order and allowed the appeal. The Tribunal emphasized the importance of fair consideration and due process in such matters to protect the interests of all parties involved.

5. The judgment underscores the significance of procedural fairness and adherence to legal requirements in insolvency proceedings. It highlights the need for thorough consideration of applications and the implications of decisions made by the Committee of Creditors in approving resolution plans. The Resolution Professional's role in diligently pursuing matters before the Adjudicating Authority is crucial to ensuring transparency and compliance with the insolvency framework.