2023 (12) TMI 570 - AT - Insolvency and Bankruptcy

Replacement of the Appellant with another Resolution Professional - HELD THAT - This Tribunal in a recent Judgment delivered in Kairav Anil Trivedi IRP of Parenteral Drugs India Ltd. Vs. State Bank of India Anr. 2023 (12) TMI 255 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH NEW DELHI has examined the similar contentions raised on behalf of the Resolution Professional/IRP which was replaced by the CoC. In the said case Resolution was passed by CoC on 06.10.2023 to replace the IRP with another RP which was approved by the Adjudicating Authority on 17.10.2023 which order was challenged by the IRP in this Tribunal. The above judgment fully supports the submissions of the Counsel for the Respondents. When the Resolution has been passed by the CoC in accordance with the provisions of the IBC deciding to replace the IRP IRP cannot be heard in questioning the resolution on the ground that present was not a case where IRP could have been replaced by another Resolution Professional. Submission of the Appellant that in the Resolution dated 01st September 2023 name of Anil Goel was mentioned whereas the Adjudicating Authority has approved the replacement with Resolution Professional- Ankit Goel - HELD THAT - Suffice it to say that name of Ankit Goel was clearly mentioned in the Joint Lenders Meeting dated 28th August 2023 when Joint Lenders Meeting decided to replace the Appellant with Ankit Goel. Further it was the Appellant who in the minutes dated 01st September 2023 has mentioned Anil Goel. Registration No. of Ankit Goel and that of Anil Goel mentioned in the minutes is same as submitted by Learned Counsel for the Respondent. The mere fact that the name of RP who is to be appointed after replacement is spelled as Anil Goel instead of Ankit Goel in the minutes which was produced by the Appellant shall have no effect on the resolution for replacement and we do not find any merit in the above submission of the Appellant that although Appellant was decided to be replaced by Anil Goel but ultimate order is of Ankit Goel - there is no error in replacement of the Appellant by Ankit Goel as RP. There are no error in the order passed by the Adjudicating Authority approving the Replacement of the Resolution Professional - there is no merit in the Appeal - the Appeal is dismissed.

Summary

Issues Involved:
1. Replacement of the Resolution Professional (RP).
2. Alleged reasons for replacement.
3. Procedural adherence and correctness of the replacement process.

Summary:

Issue 1: Replacement of the Resolution Professional (RP)
This Appeal was filed against the Order dated 27th September 2023 by the National Company Law Tribunal, Jaipur Bench, which approved the application under Section 27 of the Insolvency and Bankruptcy Code, 2016 (The Code) for replacing the Appellant with Mr. Ankit Goel as the new Resolution Professional. The Committee of Creditors (CoC) had a 100% vote share in favor of the replacement during the 19th CoC Meeting held on 1st September 2023.

Issue 2: Alleged reasons for replacement
The Appellant contended that the replacement was due to his refusal to reduce his fee and his insistence on taking legal action regarding the stripping off of the Corporate Debtor's assets in June 2018, which was not accepted by the CoC. The Appellant argued that he was not given an opportunity to present all relevant facts before the Adjudicating Authority. However, the Tribunal noted that the alleged illegal auctioning of assets occurred four years before the commencement of the Corporate Insolvency Resolution Process (CIRP) on 28th February 2022. The Tribunal found no fault with the CoC's decision to replace the RP, emphasizing that the CoC is empowered to pass such a resolution under Section 27 of the Code.

Issue 3: Procedural adherence and correctness of the replacement process
The Tribunal examined the procedural aspects and found that the CoC had followed the provisions of Section 27 of the Code. The Tribunal referenced a recent judgment (Company Appeal (AT) Ins. No. 1439 & 1440 of 2023) which upheld the CoC's authority to replace the RP without the need for the RP to challenge the reasons for replacement before the Adjudicating Authority. The Tribunal also addressed the discrepancy in the names mentioned in the minutes (Anil Goel vs. Ankit Goel) and concluded that it did not affect the validity of the replacement resolution, as the registration number was correctly mentioned and the written consent of Ankit Goel was obtained.

Conclusion:
The Tribunal found no error in the Adjudicating Authority's order approving the replacement of the Resolution Professional. The appeal was dismissed, affirming the CoC's decision to replace the Appellant with Ankit Goel as the new Resolution Professional.