9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (11) TMI 295 - AT - Insolvency and BankruptcySeeking expunging the remarks made against the Appellant (Advocate) - conflict of interest and collusion between Appellant, Respondent Nos. 2, 3 and - HELD THAT - The basis of observations made by the Adjudicating Authority is the fact that the Appellant who was appearing for the Resolution Professional in the CIRP of the Corporate Debtor has also filed an Application under Section 7 on behalf of Damayanti Tea Industries , which is a unit of CCIPL. CCIPL is promoter of the Respondent No.4 (Resolution Applicant). The observations made by the Adjudicating Authority in paragraph 17.3 gives an impression that Appellant has appeared both for Resolution Professional and Resolution Applicant in the CIRP of the Corporate Debtor, which is not the fact of the matter. The Appellant was not appearing for Respondent No.4 which is a Resolution Applicant in the CIRP of the Corporate Debtor. The Appellant has filed Section 7 Application on behalf of Damayanti Tea Industries which is a separate company registered under the Companies Act - The Section 7 Application filed by Damayanti Tea Industries has no concern with the subject matter of CIRP of the Corporate Debtor. No prohibition can be read in the statutory provision governing appearance of an Advocate in representing a different company in separate proceedings filed under Section 7. The present is not a case that Appellant has appeared for Resolution Professional and Resolution Applicant i.e. Respondent No.4 in the CIRP of the Corporate Debtor. The Appellant has made out a case for directing expunction of adverse remarks contained in the judgment dated 08.04.2022 - appeal allowed.
Issues Involved:
1. Expunging of remarks made against the Appellant in the order dated 08.04.2022 by the Adjudicating Authority. 2. Allegations of conflict of interest and collusion involving the Appellant. 3. Compliance with the Insolvency and Bankruptcy Code (IBC) and professional ethics. Issue-wise Detailed Analysis: 1. Expunging of Remarks: The Appellant sought to expunge remarks made against him in the order dated 08.04.2022 by the Adjudicating Authority (National Company Law Tribunal), Guwahati Bench, in I.A (IBC)/43/2021. The Appellant, who appeared as an Advocate for the Resolution Professional in the CIRP of the Corporate Debtor, was accused of conflict of interest and collusion. The Appellant contended that the remarks were unfounded and prejudicial. 2. Allegations of Conflict of Interest and Collusion: The Adjudicating Authority observed that the Appellant represented both the Resolution Professional and the Resolution Applicant, which was perceived as a conflict of interest. Specifically, it was noted that the Appellant had filed a Section 7 Application on behalf of 'Damayanti Tea Industries', a unit of CCIPL, which is associated with the Resolution Applicant, 'PLBB Products Pvt. Ltd.' The Authority concluded that this dual representation compromised transparency, confidentiality, and fairness in the CIRP process. 3. Compliance with IBC and Professional Ethics: The Appellant argued that his representation of 'Damayanti Tea Industries' in a separate Section 7 Application did not constitute a conflict of interest in the CIRP of the Corporate Debtor. He emphasized that 'Damayanti Tea Industries' is a distinct legal entity, and his involvement did not breach professional conduct rules or the IBC. The Appellant cited the Bar Council of India Rules, 1975, particularly Rule 33, which prohibits an Advocate from representing opposing parties in the same matter, a situation not applicable here. Judgment Analysis: The Tribunal scrutinized the observations made by the Adjudicating Authority, particularly in paragraphs 17.3, 20.2, 20.3, and 23 of the order. It was found that the Adjudicating Authority's conclusion that the Appellant represented both the Resolution Professional and the Resolution Applicant was factually incorrect. The Appellant's representation of 'Damayanti Tea Industries' in a separate matter did not constitute a breach of professional ethics or conflict of interest in the CIRP of the Corporate Debtor. The Tribunal referenced the Supreme Court's judgment in "Neeraj Garg vs. Sarita Rani" to emphasize the importance of judicial restraint in making adverse remarks against counsel without providing an opportunity to explain. It was noted that such remarks could unjustly tarnish the professional reputation of the counsel. The Tribunal also considered the judgment in "V.C. Rangadurai vs. Ramdas Shriniwas Nayak & Anr," which highlighted the importance of avoiding conflicts of interest and maintaining professional integrity. However, it was determined that the facts of the present case did not align with the circumstances described in the cited judgment. Conclusion: The Tribunal concluded that the observations made by the Adjudicating Authority in paragraph 17.3 were unnecessary and uncalled for, as they were based on an incorrect understanding of the Appellant's role. Consequently, the Tribunal directed the expunction of the adverse remarks made against the Appellant in the order dated 08.04.2022 and clarified that the general observations in paragraph 23 were not directed against the Appellant. Final Order: The Appeal was allowed, and all adverse observations made against the Appellant in the order dated 08.04.2022 were expunged.
|
