Replacement of Resolution Professional by Committee of Creditors [ Section 27 ] - Insolvency Resolution And Liquidation For Corporate Persons - IBC

Replacement of Resolution Professional by Committee of Creditors Replacement of resolution professional (RP) [ Section 27(1) ] I f at any time during the Corporate Insolvency Resolution Process the Committee of creditors is of the opinion that the resolution professional appointed under section 22 is required to be replaced, it may replace, him with another resolution professional in the manner provided under this section.. Requirement of voting share to replace resolution professional [ Section 27(2) ] Th e committee of creditors may, at a meeting, by a vote of 66% of voting shares , resolve to replace the resolution professional appointed under section 22 with another resolution professional, subject to a written consent from the proposed resolution professional in the specified form. Committee of Creditors ( CoC) to forward the name of the proposed Insolvency Profession [ Section 27(3) ) ] T h e Committee of Creditors (CoC) shall forward the name of the Insolvency Professional proposed by them to the Adjudicating Authority (AA). Adjudicating Authority to forward the name of IP proposed by CoC [ Section 27(4) ] T h e Adjudicating Authority shall forward the name of the proposed resolution professional to the Board for its confirmation and a resolution professional shall be appointed in the same manner as laid down in section 16 . Continuation of existing RP if disciplinary proceedings are pending against the proposed RP [ Section 27(5) ] W h e r e an y disciplinary proceedings are pending against the proposed resolution professional under section 27(3) , the resolution professional appointed under section 22 shall continue till the appointment of another resolution professional. Relevant Case Law Punjab National Bank Vs. Kiran Shah [ 2019 (8) TMI 1551 - NCLAT, NEW DELHI ] Dated 06.08.2019 committee of Creditor (CoC) is not required to record any reason or ground for replacing of the RP, which may otherwise call for proceedings against such RP. The CoC having decided to remove the RP with 88% voting share, it was not open to the Adjudicating authority (AA) to interfere with such decision, till it is shown that the decision of the committee of Creditor (CoC) is perverse or without jurisdiction. Mussadi Lal Kishan Lal Vs. Ram Dev Int. Ltd. [ 2018 (5) TMI 2011 - NCLAT, PRINCIPAL BENCH, NEW DELHI ] Dated 15.05.2018 The proposed RP cannot be regarded as independent umpire to conduct corporate insolvency resolution process (CIRP) as required by well settled practice. Devendra Padamchand Jain Vs. State Bank of India Ors. [ 2018 (6) TMI 1063 - NCLAT, New Delhi ] Dated 31.01.2018 The Adjudicating authority (AA) is also empowered to remove the RP, apart from the committee of Creditor (CoC), but it should be for the reasons and in the manner as provided under the relevant provisions. Naveen Kumar Jain Vs. Committee of Creditors of K.D.K Enterprises Pvt. Ltd. Ors. [ 2020 (11) TMI 957- NCLAT, New Delhi ] Dated 03.11.2020 The resolution professionals (RP) appealed against his replacement in a corporate insolvency resolution process (CIRP). While dismissing the appeal, it was observed that commercial wisdom of the committee of Creditor (CoC) covers matters including replacement of the RP and it is neither under the limited scope of judicial review nor it is justiciable.