9911796707
TMI Blog2022 (12) TMI 776X X X X Extracts X X X X X X X X Extracts X X X X ..... In the present case, despite, the fact that the Minutes of the Joint Lenders Meeting, that took place on 26.04.2022, were silent as regards the Lenders Expression of Dissatisfaction, relating to the Discharge of Duties, by the Resolution Professional and therefore, another Individual, be Replaced and Appointed, to function as Liquidator, there is no embargo in Law, for the Replacement of present / current Resolution Professional as Liquidator, by another Resolution Professional, on grounds / reasons, other than those specified under Section 34 (4) of the I B Code, 2016 (especially, when the Lenders in their Commercial Decision and Wisdom, had opted for such a Replacement of the existing Resolution Professional, as Liquidator, by another Resolution Professional, which carries due weightage and the same cannot be brushed aside so lightly. As a matter of fact, the Adjudicating Authority, (National Company Law Tribunal, Hyderabad Bench - I, Hyderabad), had applied its mind and exercised its Judicial Discretion, in the impugned order, by making a pertinent Observation, that the graceful exit of the present Resolution Professional, will pave way for the smooth Liquidation Process, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the lenders, we state that the facts in the present case do not match to the facts in the case of Sandeep Kumar Gupta. In Sandeep Kumar Gupta s, case NCLT, finding as to non-submission of the resolution plan by the RP was found to be incorrect by Hon ble NCLAT. Nextly, Hon ble NCLAT, having found that the Adjudicating Authority has recorded that it was not satisfied with the performance of the RP, upheld the replacement on the said ground alone, thereby added a new dimension to Sec 34 (1) for replacement of the RP as liquidator. 28. As far as the case on hand is concerned the Financial Creditors have not whispered replacement of the RP to act as liquidator in the present Application nor this Adjudicating Authority had not ever made any finding of the mis-conduct of the RP, therefore in our view the ruling in NCLAT is not acceptable to the case on hand. 29. Therefore, having regard to Section 34(1) of IBC, supra, more particularly, sub-clause (4), we find that the situation as contemplated under Section 34(1) (4) of IBC for replacement of the present RP to act as liquidator, since neither pleaded nor exists, We find merit in the submission of the Learned Counsel for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 17 (1) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 ( CIRP Regulations ), constituted the Committee of Creditors , and filed a Report , before the Adjudicating Authority , ( Tribunal ). 5. It is represented on behalf of the Appellant , the first meeting of the Committee of Creditors , was held on 26.09.2019, wherein, the Appellant , was confirmed, as the Resolution Professional ( RP ), as per Section 22 (2) of the I B Code, 2016. As per Order dated 23.10.2019, IA No. 865 of 2020, was filed by the Appellant , in which, the Adjudicating Authority ( Tribunal ), was pleased to affirm the Appointment of the Appellant , as a Resolution Professional . 6. It is the version of the Appellant that he had discharged his Role and Responsibilities , as per the I B Code, 2016, applicable Rules and Regulations. Ultimately, a Resolution Plan , came to be presented, before the Committee of Creditors , wherein, the Promoter of the Corporate Debtor , was the Resolution Applicant . 7. That apart, on 19.09.2020, the Committee of Creditors , in their 16th Meeting, had approved the Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ints out that a Memo , was filed on behalf of the Financial Creditor , mentioning that the Joint Lenders Meeting , was held on 22.04.2022, wherein, the Lenders , had expressed their Opposition , regarding the continuation of Mr. K.V. Srinivasa, i.e., the Resolution Professional , as the Liquidator in the matter. In this connection, the Learned Counsel for the Appellant , takes a stand that an Objection , was raised by the Learned Counsel for the Appellant, over the Memo , filed by the Financial Creditor , on the basis, that a Memo , is not maintainable . 14. Furthermore, according to the Appellant, the I B Code, 2016, does not contain any provision for an Appointment of any other person , as Liquidator , except the incumbent Resolution Professional . 15. It is projected on the side of the Appellant , that there is no circumstance whatsoever, that exists, under which, an existing Resolution Professional , can be replaced with a new Resolution Professional , as Liquidator . Besides this, the Learned Counsel for the Appellant, advances an argument that the Statute has not conferred any Authority or Power , either to an Adjudicating Authority or to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on it. 18. The Learned Counsel for the Appellant, refers to the Judgment of the Hon ble Supreme Court of India in the matter of B. Srinivasa Reddy v. Karnataka Urban Water Supply Drainage Board Employees Association (vide Civil Appeal No. 3719 of 2006 dated 28.08.2006, wherein, it is observed as under: .. when the Act and the statutory Rules have not prescribed any definite term and any particular mode, the High Court could not have read into the statute a restriction or prohibition that is not expressly prohibited by the Act and the Rules. 19. Further, the Learned Counsel for the Appellant, advances a plea that Section 238 of the I B Code, 2016, overrides , other Laws , and points out that by the very Operation of Law , the Resolution Professional , shall continue to act , as a Liquidator , for the purpose of Liquidation , unless Replaced , by an Adjudicating Authority , under sub-section 4 of Section 34 of the Code. Also that, unlike the enabling power under Section 27 of the I B Code, 2016, wherein the Committee of Creditors , can recommend the Removal or Replacement of a Resolution Professional , there exists no such provision on the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se interests are prejudicially affected by such contravention, may make an application to the Adjudicating Authority for a Liquidation Order , as referred to in sub-clauses (i), (ii), (iii) of clause (b) sub-section (1). 26. It is brought to the fore that the Appellant / Applicant, before the Adjudicating Authority , that the Resolution Applicant , had deposited a Sum of Rs.10 Crores as Performance Guarantee , and the same was to be Forfeited , because of the failure to implement the Resolution Plan , as Terms of the approved Resolution Plan , and its implementation schedule. Hence, the Appellant / Applicant , had sought a Relief , in IA No. 71 of 2022 in CP (IB) No. 651 / 7 / HDB / 2018, praying for issuance of an appropriate direction , to be given to the Appellant / Applicant , in terms of the Code , and permit him to Forfeit the Performance Bank Guarantee for a sum of Rs.10 Crores, as per Regulation 36B (4A) of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. 27. As seen from the impugned order dated 08.07.2022 in IA (IBC) / 71 of 2022 in CP IB No. 651 of 2018, it is evident that on behalf of the Lenders, a plea was adv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uties , as per decision in Re Keypak Homecare Ltd. (1987) BCLC 409 (Ch D.). Removal of Liquidator : 34. A Liquidator , is to act in the interests of General Body of Creditors , and ought not to continue in Office, if the Creditors , no longer have confidence in its ability, to realise Company s Assets to the Creditors best advantage, and to prosecute / pursue the Claims , with due diligence. 35. There is no two opinion of an important fact that a removal of an Insolvency Professional / Liquidator from Office , may have a deleterious effect , on a Liquidator s Professional standing and reputation . However, there must be strong grounds, before the Court, to remove a Liquidator (vide Edennote Ltd. Re [1996] EWCA 1359). Rejection : 36. By and large, in the absence of circumstances, provided under Sub Section (4) of Section 34 of the I B Code 2016, an Adjudicating Authority , is not enjoined to replace a Resolution Professional . In fact, an Appointment , of a Resolution Professional , as a Liquidator , can be Rejected / Negatived by an Adjudicating Authority , on grounds, other than those mentioned under Section 34 (4) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his Tribunal , points out that before the Adjudicating Authority , on behalf of Lenders , even though, a reliance was placed on the Minutes of Joint Lenders Meeting , that took place on 26.04.2022, the said Minutes , was conspicuously silent, about the aspect of any dissatisfaction being expressed , pertaining to the performance of the Resolution Professional , in the earnest opinion of this Tribunal . 41. However, the Adjudicating Authority , in the impugned order , had noted that in the Minutes of Joint Lenders Meeting , dated 26.04.2022, that the newly proposed Liquidator , had acknowledged to act as Liquidator , by consenting for 50% of costs under Regulation and that was the reason for the displacement of a Resolution Professional , as Liquidator . 42. Dealing with the plea of the Appellant that the Adjudicating Authority , was not right in taking cognisance of a Memo , filed by the Financial Creditor , and that the impugned order dated 08.07.2022 in IA (IBC) No. 71 of 2022 in CP(IB) No. 651 / 7 / HDB / 2018, cannot be passed on that count, there is no express Fetter , in Law or NCLT Rules , 2016, on the part of the Adjudicating Autho ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
