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Home Case Index All Cases Insolvency and Bankruptcy Insolvency and Bankruptcy + Tri Insolvency and Bankruptcy - 2021 (9) TMI Tri This

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2021 (9) TMI 435 - Tri - Insolvency and Bankruptcy


Issues:
Application seeking replacement of the Liquidator under Sections 34(4)(a) and 60(5) of the Insolvency and Bankruptcy Code, 2016.

Analysis:

1. Appointment of Liquidator: The Application challenges the appointment of the Liquidator of the Corporate Debtor, alleging non-compliance with Section 34(4)(a) of the IBC, 2016. The Applicant, an Equity Shareholder, raises concerns regarding the appointment process, including the Liquidator's alleged disqualification, failure to disclose information, and violation of duties under Section 35(d) of the IBC, 2016. However, the Tribunal emphasizes that its current focus is on the legality of the appointment itself rather than the specific allegations against the Liquidator.

2. Legal Arguments: The Applicant argues that the Liquidator's appointment is void ab initio due to the disqualification outlined in Section 34(4)(a) of the IBC, 2016, as the Resolution Plan submitted by the Liquidator was not approved by the Adjudicating Authority. In contrast, the Respondent contends that any challenge to the appointment should be pursued through Section 61(1)/(4) of the IBC, 2016, via an appeal to the NCLAT, highlighting that the Tribunal lacks the authority to modify its own orders.

3. Decision on Appointment: After considering the submissions from both parties, the Tribunal concludes that the appointment of the Liquidator is null and void in the eyes of the law. The Tribunal agrees with the Applicant's argument that the proviso of Section 34(4)(a) acts akin to quo warranto, allowing for the replacement of the Liquidator if their appointment is deemed void.

4. Replacement and Direction: The Tribunal holds that the appointment of the current Liquidator is illegal and directs the Registry to inform the IBBI for the replacement of the Liquidator. Additionally, a suggestion is made by the Applicant for a new Liquidator, Dr. Kondapalli Venkata Srinivas, but it is clarified that the final decision rests with the IBBI.

5. Disposition of Applications: The Tribunal disposes of the current Application seeking the Liquidator's replacement, rendering other pending applications on the matter moot. The decision underscores the importance of adherence to legal provisions in the appointment of Liquidators under the IBC, 2016, to uphold the integrity of insolvency proceedings and protect stakeholders' interests.

 

 

 

 

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