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TMI Blog2022 (8) TMI 234X X X X Extracts X X X X X X X X Extracts X X X X ..... 16. The above applications have been made by the Appellant praying the Bench to appoint Shri CA Mahalingam Suresh Kumar as Resolution Professional of the Corporate Debtor. However, the Learned Adjudicating Authority rejected the prayer of the Appellant, aggrieved by the same the present Appeal is preferred. 3. It is submitted that the Appellant Bank filed Company Application before the Learned Adjudicating Authority under Section 7 of the I&B Code, 2016 seeking for Initiation of the CIRP against the Corporate Debtor and in the said Application, the Appellant had proposed to appoint Shri CA Mahalingam Suresh Kumar as the IRP after its internal selection process. However, the Learned Adjudicating Authority rejected the name as proposed by the Appellant for the reason that the proposed name was not finding in the NCLT, Kochi Bench's list of Insolvency Professionals circulated by the IBBI and appointed the Respondent from the said list as the IRP to carry out the CIRP of the Corporate Debtor. 4. The IRP after analysis of the claims has constituted the CoC by naming the Appellant Bank as the major Financial Creditor of the Corporate Debtor by allotting 98.03% voting rights. The 1st Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ejecting the Application is in gross violation of the Appellant's rights under law and the impugned order is arbitrary and liable to be set aside. 8. The Learned Adjudicating Authority erred in rejecting the Application for appointment of RP in contravention to Section 22(4) and (5) of the I&B Code, 2016 and has acted beyond its power as it has no equity jurisdiction to decide whether it can appoint or reject the RP proposed to be appointed by the CoC. The Learned Counsel relied upon the judgments of this Tribunal in support of his case. 9. In view of the reasons as stated above, the Learned Counsel prayed this Bench to allow the Appeal and set aside the impugned order passed by the Adjudicating Authority. Respondent's Submissions: 10. The Respondent filed reply and submitted that the Hon'ble Adjudicating Authority primarily found that the IRP proposed by the Appellant was handling too many assignments and appointed the Respondent from the panel of IRP maintained by the IBBI. It is submitted that despite rejection of the name proposed by the Appellant, the CoC in its meeting dated 21.01.2022 in which the Appellant hold 98.03% voting share appointed again Shri CA Mahalingam Sure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the committee of creditors is hereby accorded for appointment of CA. Mahalingam Suresh Kumar as the Resolution Professional in the matter of Corporate Insolvency Resolution Process of M/s Tip Top furniture Private Limited. "RESOLVED FURTHER THAT Resolution Professional be and is hereby authorised to do all such acts, deeds and things as may be required necessary or incidental thereto." 16. Even prior to the Resolution passed by the CoC appointing Shri CA Mahalingam Suresh Kumar, the Indian Institution of Insolvency Professionals of ICAI issued Form-B an Authorization For Assignment (AFA) dated 26.11.2021 and the authorization is valid from 26.11.2021 to 25.11.2022. Further, the said Shri CA Mahalingam Suresh Kumar has given his written consent in Form-AA dated 20.01.2022 i.e. prior to the 1st CoC dated 21.01.2022. 17. The Learned Counsel for the Appellant submitted that the rejection of the Application by the Adjudicating Authority is in contravention to Section 22(4) and (5) of the I&B Code, 2016. Section 22 empowers appointment of Resolution Professional. Sub-section (1) of Section 22 reads as under: "The 1st Meeting of the Committee of Creditors shall be held within 7 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses Limited & Ors. in CA (AT) (Ins) No.882 of 2020 dated 03.11.2020. This Tribunal held as under: "In the instant case, the sole Financial Creditor (Indian Bank) has voted to replace the Resolution Professional under Section 22 of the I&B Code, which means the replacement is sought with 100% voting shares while the requisite vote is 66%. It is well settled that the commercial wisdom of the Committee of Creditors which covers matters including the replacement of the Resolution Professional does not fall within the limited scope of judicial review and is not justiciable." 20. Further, the Learned Counsel relied upon the judgments of this Tribunal in the matter of Committee of Creditors of LEEL Electrical Limited through State Bank of India Vs. LEEL Electrical Limited through its Interim Resolution Professional, Arvind Mittal in CA (AT) (Ins) No. 1100 of 2020 dated 21.12.2020. This Tribunal relying upon the earlier decision held that "appointment of RP is governed by Section 22 which provides that the 1st Meeting of CoC shall be held within 7 days of constitution of CoC and the Coc may by a majority vote of not less than 66% of the voting share of Financial Creditors either resolve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Limited and Another" (2021 7 SCC 474): "95.....However, we do take this opportunity to offer a note of caution for NCLT and NCLAT, functioning as the Adjudicatory Authority and Appellate Authority under the IBC respectively, from judicially interfering in the framework envisaged under the IBC. As we have noted earlier in the judgment, the IBC was introduced in order to overhaul the insolvency and bankruptcy regime in India. As such, it is a carefully considered and well thought out piece of legislation which sought to shed away the practices of the past. The legislature has also been working hard to ensure that the efficacy of this legislation remains robust by constantly amending it based on its experience. Consequently, the need for judicial intervention or innovation from NCLT and NCLAT should be kept at its bare minimum and should not disturb the foundational principles of the IBC....." 23. In view of the decision of the Hon'ble Supreme Court that the commercial wisdom of the CoC is paramount and cannot be interfered with by the Tribunals. Further, the provisions of law empower the CoC contemplated under Section 22 of the I&B Code, 2016 either to continue the IRP as RP or r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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