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2021 (8) TMI 393 - AT - Insolvency and BankruptcyReplacement of IRP - Case of appellant is that the Application for the replacement of IRP was time barred on the date of passing of the impugned order as more than 270 days (herein more than 470 days) has already elapsed from the start of Corporate Insolvency Resolution Process - HELD THAT - The NCLT under order dated 11.12.2020 (at page 235 of the Reply Affidavit of Respondent No. 3) excluded a period of 252 days i.e. from 04.02.2020 to 13.10.2020 and allowed the extension of 90 days with the direction to the RP to expedite the process for seeking Resolution Plan. On the admitted facts and judgment relied by the Respondents particularly in the case of K. SASHIDHAR VERSUS INDIAN OVERSEAS BANK OTHERS 2019 (2) TMI 1043 - SUPREME COURT wherein Hon ble Supreme Court has held that The commercial wisdom of CoC has been given paramount status without any judicial intervention and in the instant case the decision taken by the CoC in the commercial wisdom has been approved by the Ld. Adjudicating Authority - this Appellate Tribunal in NAVEEN KUMAR JAIN VERSUS COMMITTEE OF CREDITORS OF K.D.K ENTERPRISES PVT. LTD. ORS. 2020 (11) TMI 957 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI wherein this Appellate Tribunal has held that replacement of IRP/RP also falls within the commercial wisdom of the CoC. The Appellant does not have vested any right to continue on the post of IRP / Resolution Professional - there is no illegality committed by the Ld. Adjudicating Authority while passing the impugned order. Appeal dismissed.
Issues Involved:
1. Replacement of the Interim Resolution Professional (IRP). 2. Extension of the Corporate Insolvency Resolution Process (CIRP) period. 3. Commercial wisdom of the Committee of Creditors (CoC). Detailed Analysis: Replacement of the Interim Resolution Professional (IRP): The appeal was filed by the IRP of the Corporate Debtor, who was aggrieved by the order of the Adjudicating Authority replacing him with another Resolution Professional (RP). The CoC, with an 87% voting share, decided on 26th October 2020 to replace the IRP with Ms. Deepika Prasad. The IRP was directed to hand over the records and assets within 10 working days. The appellant argued that the application for his replacement was time-barred as more than 470 days had elapsed since the start of the CIRP. However, the respondent contended that the IRP had no vested legal interest to continue once the CoC decided to replace him, citing the Supreme Court's judgment in K. Shashidhar Vs. Indian Overseas Bank, which emphasized the paramount status of the CoC's commercial wisdom without judicial intervention. Extension of the Corporate Insolvency Resolution Process (CIRP) Period: The appellant argued that the extension of the CIRP period approved by the Adjudicating Authority could not remedy the wrong committed by the initial order. The respondent pointed out that due to the nationwide lockdown, the CIRP period had to be extended. The CoC resolved to extend the CIRP period, and the Adjudicating Authority excluded a period of 252 days from the CIRP timeline and allowed an additional 90 days for seeking a resolution plan. Commercial Wisdom of the Committee of Creditors (CoC): The respondent emphasized that the commercial wisdom of the CoC is supreme and not subject to judicial review, as reiterated by the Supreme Court in K. Shashidhar Vs. Indian Overseas Bank. The CoC's decision to replace the IRP falls within its commercial wisdom, which is beyond the scope of judicial intervention. The Appellate Tribunal also held in previous judgments that the replacement of the IRP/RP is within the commercial wisdom of the CoC. Findings: The Tribunal found that the appellant was appointed as IRP on 08.08.2019, and the CoC held its first meeting on 21.09.2019. The CoC, with 100% voting shares, rejected the appellant's proposal to continue as RP. Subsequently, the CoC resolved to appoint Ms. Deepika Bhugra Prasad as the new RP. The Tribunal noted that the commercial wisdom of the CoC, as upheld by the Supreme Court, is paramount and not subject to judicial review. The Tribunal confirmed that the appellant had no vested right to continue as IRP/RP and upheld the Adjudicating Authority's order. Order: The Tribunal dismissed the appeal, confirming the Adjudicating Authority's order dated 20.11.2020, which replaced the IRP with Ms. Deepika Prasad and extended the CIRP period. The Tribunal directed the registry to upload the judgment on its website and send a copy to the Adjudicating Authority. Conclusion: The appeal was dismissed, affirming the CoC's decision to replace the IRP and extend the CIRP period, emphasizing the supremacy of the CoC's commercial wisdom.
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