2022 (12) TMI 1057 - AT - Insolvency and Bankruptcy

Seeking replacement of Resolution Professional (RP) - HELD THAT - There was no consensus in the name of the Resolution Professional and it was open for the Adjudicating Authority to appoint any Resolution Professional. However, there being no consensus between the parties, Memo filed by Indiabulls Housing Finance Ltd. could not have been taken notice or Resolution Professional appointed on the basis of said Memo. Out of three Applicants, two Applicants had filed Joint Memo namely- SREI Equipment Finance Ltd. and IIRF India Realty XII Ltd. recommending the name of Mr. Avil Jerome Menezes. Why the Adjudicating Authority did not choose the name suggested by two Applicants and accepted the name suggested by one Applicant- Indiabulls Housing Finance Ltd. has not been dealt with the order. When the clear intent of the order dated 28.11.2022, is that unless the Applicants mutually agree on any name of the Resolution Professional, Resolution Professional will be appointed by the Adjudicating Authority, and it was clear that there was no consensus with regard to the name of the Resolution Professional between three Applicants, the Adjudicating Authority ought to have appointed Resolution Professional on its own without referring to or relying to any prayer made by the Applicant- Indiabulls Housing Finance Ltd. . The Adjudicating Authority committed error in appointing Mr. Sapan Mohan Garg as Resolution Professional whose name was submitted by Memo filed by Indiabulls Housing Finance Ltd. . The order dated 28.11.2022 (in order sheet) insofar as it appoints Mr. Sapan Mohan Garg as Resolution Professional is set aside and the Adjudicating Authority is directed to pass an order appointing any Resolution Professional from the eligible Resolution Professional as it deem fit and proper. The Order passed insofar as it appoints Mr. Sapan Mohan Garg as Resolution Professional is set aside - Appeal allowed in part.

Summary

Issues Involved:
1. Replacement of Interim Resolution Professional (IRP) and appointment of a new Resolution Professional (RP).
2. Locus of 'SREI Equipment Finance Ltd.' to file the appeal.
3. Compliance with the Supreme Court's order regarding the execution of a sale deed.

Issue-wise Detailed Analysis:

1. Replacement of Interim Resolution Professional (IRP) and Appointment of a New Resolution Professional (RP):
The judgment addresses two orders dated 28.11.2022 and 05.12.2022 passed by the Adjudicating Authority (NCLT), Mumbai Bench, challenged by 'SREI Equipment Finance Ltd.' and 'IIRF India Realty XII Ltd.'. The CIRP was initiated against 'Shree Ram Urban Infrastructure Limited' and Srigopal Choudhary was appointed as the IRP, later confirmed as RP. Multiple applications were filed seeking his removal, and the Adjudicating Authority removed him on 28.11.2022, directing the applicants to mutually decide on a new RP. 'SREI Equipment Finance Ltd.' and 'IIRF India Realty XII Ltd.' proposed Mr. Avil Jerome Menezes, while 'Indiabulls Housing Finance Ltd.' and 'UV Asset Reconstruction Company Limited' suggested three names, including Mr. Sapan Mohan Garg. The Adjudicating Authority appointed Mr. Sapan Mohan Garg, which was contested due to lack of consensus. The Tribunal noted that there was no mutual agreement and directed the Adjudicating Authority to appoint a suitable RP independently.

2. Locus of 'SREI Equipment Finance Ltd.' to File the Appeal:
An objection was raised regarding the competence of 'SREI Equipment Finance Ltd.' to file the appeal, as it was itself under CIRP. The Tribunal examined the authorization details and found that Mr. Pradeep Faujdar, Senior Vice President-Legal, was duly authorized by the Administrator appointed for 'SREI Equipment Finance Ltd.'. The Tribunal dismissed the objection, affirming the locus of 'SREI Equipment Finance Ltd.' to file the appeal.

3. Compliance with the Supreme Court's Order Regarding the Execution of a Sale Deed:
The Supreme Court's order dated 14.11.2022 in Civil Appeal No. 7050/2022 required the RP to execute a sale deed upon deposit of a specified amount. Given the removal of the previous RP and the setting aside of the appointment of Mr. Sapan Mohan Garg, the Tribunal emphasized the need for a new RP to be appointed promptly to comply with the Supreme Court's directive. The Adjudicating Authority was instructed to appoint a new RP within one week to facilitate the execution of the sale deed as ordered by the Supreme Court.

Conclusion:
The Tribunal set aside the appointment of Mr. Sapan Mohan Garg as RP and directed the Adjudicating Authority to appoint a new RP independently, ensuring compliance with the Supreme Court's order. The appeals were partly allowed, and the Tribunal affirmed the locus of 'SREI Equipment Finance Ltd.' to file the appeal. The decision ensures the proper administration of the CIRP and adherence to judicial directives.