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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 ..... ght to have considered the same without going into the other technicalities. When the Applicant comply with the provisions of law and there is no scope to reject the prayer or relief as sought by the Applicant. In the present case, admittedly the 1st CoC was held on 21.01.2022 and at Agenda Item No. B-4 the CoC in accordance with Section 22(2) of the I B Code, 2016, was resolved unanimously resolved for appointment of Shri CA Mahalingam Suresh Kumar as the Resolution Professional in respect of the Corporate Debtor. Thus, it can be seen that the Appellant is having 98.03% voting share in the Committee of Creditors filed the Application for appointment of RP, hence the voting share of the Appellant in passing the Resolution is much more than the required voting percentage i.e. 66% - This Tribunal is of the view that, since two Members of CoC participated it is deemed 100% voting share in favour of the Resolution and it is a unanimous. In any case, the Appellant is having the majority voting share accorded the Resolution for appointment of new RP. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing 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 CoC Meeting held on 21.01.2022 by the IRP as the Chairman in which various resolutions were proposed and the same was considered by the CoC and most importantly the CoC has proposed and recommended to appoint Shri CA Mahalingam Suresh Kumar as Insolvency Professional and valid Authorization For Assignment (AFA) issued by IBBI. 5. The CoC Members comprising of the Appellant Bank and South Indian Bank, after elaborate discussions about the experience and the past handled assignments of the IRP has unanimously decided to appoint Shri CA Mahalingam Suresh Kumar as an IRP and passed an unanimous resolution for replacement of the IRP and appointment of Shri CA Mahalingam Suresh Kumar as the RP in compliance with Section 22(2) of the I B Code, 2016 and filed an Application before the Learned Adjudicating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat 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 Suresh Kumar as RP replacing the Respondent stating that the CoC approved the appointment and the same is in the domain of CoC members exercising their commercial wisdom. 11. The Learned Counsel further submitted that from the IBBI website the proposed RP is handling many assignments when he was given consent to function as RP. The IP (Insolvency Professional) must refrain from taking too many assignments, if he is unlikely to devote adequate time to each of the assignments under Clause 22 of the Code of conduct of the IP. 12. In view of the aforesaid reasons the Learned Counsel prayed this Bench to dismiss the Appeal. Analysis / Appraisal: 13. Heard the Learned Counsel for the parties perused the pleadings, documents and citations relied upon by the respective parties. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 days of the Constitution of the Committee of Creditors. Sub-section (2) of Section 22 reads as under: The Committee of Creditors, may in the 1st Meeting, by a majority vote of not less than 66% of the voting share of the Financial Creditors, either resolve to appoint the Interim Resolution Professional as a Resolution Professional or to replace the Interim Resolution Professional by another Resolution Professional. Per sub-section (3), where the Committee of Creditors resolves under sub-section (2) a) ... b) To replace the interim resolution professional, it shall file an application before the Adjudica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lied 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 to appoint the IRP as a Resolution Professional or to replace the IRP by another Resolution Professional. It is no well settled that the decision in regard to appointment of IRP as RP or replacement of IRP by another RP falling within the ambit of Section 22 of I B Code, 2016 is a decision based on commercial wisdom of CoC, which is not amenable to judicial review . 21. In the present case, admittedly the 1st CoC was held on 21.01.2022 and at Agenda Item No. B-4 the CoC in accordance with Section 22(2) of the I B Code, 2016, was resolved unanimously resolved for appointment of Shri CA Mahalingam Suresh K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 replace the IRP. When the provisions are unambiguous and authorises the CoC to act in accordance with law the same cannot be interfered with by the Tribunals unless and until it is arbitrary, illegal and irrational and dehors the provisions of the Code and the Rules. Conclusion: 24. For the aforesaid reasons, this Tribunal comes to an irresistible and inescapable conclusion that the Appellant has made a prima-facie case to be interfered with the order passed by the Adjudicating Authority. Accordingly, the Appeal is allowed and the order passed by the Adjudicating Authority in I.A. No. 26 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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