2023 (4) TMI 449 - HC - Insolvency and Bankruptcy

Disciplinary Proceedings - interim order of injunction restraining the respondents, their servants or agents or any other person from taking any coercive action against the petitioner on account of the orders impugned in the Writ Petition - HELD THAT - The interim order of this Court, dated 26.02.2021, is an interim order of injunction restraining the respondents, their servants or agents or any other person from taking any coercive action against the petitioner on account of the orders impugned in the Writ Petition and therefore, if an action, taken pursuant to disciplinary action, alone will be violative of the injunction order and in this case, the application is filed on allegations of disclosing the valuation report etc., and therefore, will not fall within the prohibition granted by this Court. This finding is prima facie rendered because the same is cited as an extra-ordinary reason to entertain the Writ Petition under Article 226 of the Constitution of India. As otherwise, it is clear that when an appeal from an order passed by the NCLAT under Section 61 of the IBC lies before the Hon ble Supreme Court of India as per Section 62 of the IBC , the Writ Petition before this Court cannot be entertained. Petition dismissed.

Issues:
1. Removal of the petitioner as Liquidator under Section 60(5) of the Insolvency and Bankruptcy Code, 2016.
2. Authority of the National Company Law Tribunal (NCLT) to remove the Liquidator.
3. Appeal filed by the petitioner against the order of the NCLT before the National Company Law Appellate Tribunal (NCLAT).
4. Maintainability of the Writ Petition challenging the NCLAT's order.
5. Violation of interim injunction order granted by the High Court in previous Disciplinary Proceedings.

Analysis:

1. Removal of the petitioner as Liquidator under Section 60(5) of the Insolvency and Bankruptcy Code, 2016:
The petitioner, a Chartered Accountant and Resolution Professional, was removed as Liquidator by the NCLT based on serious allegations, including sharing the valuation report and lacking a valid authorization. The NCLT held that the appointing authority has the power to remove the Liquidator, leading to the appointment of a new Liquidator. The petitioner appealed this decision to the NCLAT, which upheld the removal, emphasizing the appointing authority's power and the petitioner's lack of required authorization.

2. Authority of the National Company Law Tribunal (NCLT) to remove the Liquidator:
The NCLT, as the appointing authority, exercised its power to remove the Liquidator based on the serious allegations against the petitioner. The NCLT's decision was further supported by the NCLAT, which affirmed the appointing authority's role in removal and emphasized the absence of personal rights for the Liquidator to continue in the process.

3. Appeal filed by the petitioner against the order of the NCLT before the National Company Law Appellate Tribunal (NCLAT):
The petitioner's appeal to the NCLAT challenged the NCLT's decision to remove him as Liquidator. However, the NCLAT dismissed the appeal, citing the appointing authority's power, the petitioner's lack of required authorization, and the absence of personal rights for the Liquidator to continue.

4. Maintainability of the Writ Petition challenging the NCLAT's order:
The High Court considered the maintainability of the Writ Petition challenging the NCLAT's order. While the petitioner argued that the High Court's powers under Article 226 of the Constitution of India supersede statutory appeal provisions, the Court referred to settled legal positions indicating that appeals from NCLAT orders lie before the Supreme Court, not the High Court.

5. Violation of interim injunction order granted by the High Court in previous Disciplinary Proceedings:
The High Court noted that the previous Writ Petitions related to Disciplinary Proceedings against the petitioner and an interim injunction was granted to prevent coercive actions. However, the Court found that actions related to the removal of the Liquidator did not fall under the injunction's scope. The Court emphasized that appeals from NCLAT orders must be pursued before the Supreme Court, not the High Court.

Result:
The High Court dismissed the Writ Petition, directing the petitioner to file an appeal under Section 62 of the IBC before the Supreme Court to address all grounds raised. The Court did not delve into the merits of the impugned orders and closed the connected miscellaneous petition without costs.

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