2024 (5) TMI 679 - AT - Insolvency and Bankruptcy

Seeking directions to the Resolution professional to conduct Transaction Audit of the books of the Corporate Debtor appointing Mr Amit Khandelwal as an independent auditor - constitutionality of re-constitution of COC by RP without conducting the transaction audit - legality of approval of resolution plan by the illegally constituted COC - HELD THAT - The impugned order being only interlocutory order and subsequently another order has been passed on 11.03.2024 all issues pertaining to the application are open and to be considered and decided by the Adjudicating Authority after hearing both the parties. Since the Adjudicating Authority in subsequent order makes it clear that the application may be decided afresh after hearing both the parties and considering the Reply, there are no reason to keep the appeal pending. Appeal disposed off.

Summary

Issues involved: Appeal against order dated 29.01.2024 passed by the Learned Adjudicating Authority in I.A. 3151/2022 in C.P. (IB) No. 271/PB/2017 regarding directions related to the reconstitution of the Committee of Creditors (CoC) and approval of resolution plan.

Details of the Judgment:

Issue 1: Directions related to Transaction Audit and COC reconstitution
- The Punjab National Bank (PNB) filed I.A. 3151/2022 seeking directions for a Transaction Audit and challenging the reconstitution of the CoC.
- The Adjudicating Authority directed the Resolution Professional (RP) to examine the issue afresh, indicating a need for consideration.
- The Resolution Plan had already been approved by the CoC in June 2022.
- PNB argued for the reconstitution of the CoC, stating the issue was still relevant.
- The subsequent order on 11.03.2024 directed the issuance of Notice to all CoC members for filing a Reply.
- The Court held that the subsequent order allowed for a fresh consideration of all issues by the Adjudicating Authority after hearing both parties.
- The Adjudicating Authority was directed to decide the application after considering the parties' Replies in accordance with the law.

Issue 2: Interlocutory nature of the order
- The impugned order was considered interlocutory, with subsequent directions issued on 11.03.2024 for further proceedings.
- The subsequent order clarified that all issues in I.A. 3151/2022 were open for decision after hearing all parties.
- The Court concluded that since the Adjudicating Authority was set to decide the application afresh after hearing both parties, there was no need to keep the appeal pending.
- All contentions of both parties were left open for the Adjudicating Authority to decide in accordance with the law.

Conclusion:
- The appeal was disposed of, emphasizing that the Adjudicating Authority would consider the application after reviewing the parties' Replies.