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TMI Blog2023 (11) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... dency of this Writ Petition. 2. It is pertinent to mention here that though initially Union of India was arrayed as Respondent No. 2 and the Resolution Professional, against whom the present proceedings have been initiated, was arrayed as Respondent No. 3, later on Union of India was dropped from the array of parties and the Resolution Professional has now been arrayed as Respondent No. 2. 3. The facts, in brief, leading to the present Writ Petition are as under: a. It is stated that the National Company Law Tribunal (hereinafter referred to as 'the NCLT') at Ahmadabad initiated Corporate Insolvency Resolution Process (hereinafter referred to as 'the CIRP') against the Corporate Debtor. b. It is stated that right from the beginning Respondent No. 2, who had been appointed as the Insolvency Resolution Professional had not been performing its duty diligently and in accordance with the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as 'the IBC'). c. It is stated that as mandated by Regulations 6(1) and (2) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 (hereinafter referred to as 'the CIRP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 to issue a show cause notice against the Respondent No. 3 and take appropriate action against him; (b) Issue a writ of mandamus or a writ of any other nature or any other direction / order restraining the Respondent No. 3 from functioning as the Liquidator of the Corporate Debtor during the pendency of these Writ Proceedings and staying the proceedings before the Hon'ble NCLAT during the pendency of the present Writ Proceedings; (c) Issue a writ of mandamus or a writ of any other nature or any other direction / order staying the proceedings before the Hon'ble NCLAT during the pendency of the present Writ Proceedings; (d) Issue a writ of mandamus or a writ of any other nature or any other direction/order directing the Respondent No. 1 to remove the Respondent No. 3 from the Liquidation proceedings of the Corporate Debtor; " 4. Notice was issued on 09.11.2020. Replies have been filed by Respondents No. 1 & 2. 5. Learned Counsel for the Petitioner vehemently contends that Respondent No. 2 has not performed his functions as a Resolution Professional. Learned Counsel for the Petitioner also highlights the in-action on the part of the Respondent No. 2 in not bringing o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... int was closed. 7. Heard the Counsels for the parties and perused the material on record. 8. In exercise of the powers conferred under sections 196, 217, read with section 240 of the Insolvency and Bankruptcy Code, 2016, the IBBI has brought out the 2017 Regulations. Regulation 7 of the said Regulations deals with disposal of a complaint and the same reads as under: "7. Disposal of complaint. (1) The Board may seek additional information and records from the complainant and information and records from the concerned service provider to form a prima facie view whether the contravention alleged in the complaint is correct. (2) The complainant and the service provider shall submit the information and records sought under sub-regulation (1) within [seven] days thereof. [Provided that an additional time, not exceeding seven days, may be granted by the Board on request of the service provider.] (3) [The Board shall investigate the information and records and form an opinion whether there exists a prima facie case within thirty days of the receipt of the complaint.]. (4) The Board shall close the complaint where it is of the opinion under sub-regulation (3) that there does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lvency Resolution Professional. In fact the final report records certain irregularities committed by Respondent No. 2 which, this Court is sure, will be taken care of by the Board before appointing Respondent No. 2 in further cases as Insolvency Resolution Professional. 12. Under Article 226 of the Constitution of India, this Court cannot substitute its own conclusion to the one arrived at by experts until and unless there is gross miscarriage of justice which strikes at the root of the case. A team of experts have considered the case and have arrived at a conclusion and this Court cannot hazard a venture into this domain. It is well settled that the courts should give way to the opinion of the experts unless the decision is totally arbitrary or unreasonable. 13. Section 196 of the IBC delineates the powers and functions of the Board and the same reads as under: "Section 196. Powers and functions of Board. (1) The Board shall, subject to the general direction of the Central Government, perform all or any of the following functions namely:- (a) register insolvency professional agencies, insolvency professionals and information utilities and renew, withdraw, suspend or canc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y guidelines to the insolvency professional agencies, insolvency professionals and information utilities; (q) specify mechanism for redressal of grievances against insolvency professionals, insolvency professional agencies and information utilities and pass orders relating to complaints filed against the aforesaid for compliance of the provisions of this Code and the regulations issued hereunder; (r) conduct periodic study, research and audit the functioning and performance of to the insolvency professional agencies, insolvency professionals and information utilities at such intervals as may be specified by the Board; (s) specify mechanisms for issuing regulations, including the conduct of public consultation processes before notification of any regulations; (t) make regulations and guidelines on matters relating to insolvency and bankruptcy as may be required under this Code, including mechanism for time bound disposal of the assets of the corporate debtor or debtor; and (u) perform such other functions as may be prescribed. (2) The Board may make model bye-laws to be to adopted by insolvency professional agencies which may provide for- (a) the minimum standar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n-making body is influenced by considerations which ought not to influence it; or fails to take into account matters which it ought to take into account, the court will interfere. See Padfield v. Minister of Agriculture, Fisheries and Food [1968 AC 997 : (1968) 1 All ER 694] ." (emphasis supplied) 28. In Sterling Computers Ltd. v. M&N Publications Ltd. [(1993) 1 SCC 445 : AIR 1996 SC 51 : (1993) 1 SCR 81] it was pointed out that while exercising the power of judicial review, the Court is concerned primarily as to whether there has been any infirmity in the decision-making process? In this case, the following passage from Professor Wade's Administrative Law was relied upon: (SCC p. 457, para 17) "The doctrine that powers must be exercised reasonably has to be reconciled with the no less important doctrine that the court must not usurp the discretion of the public authority which Parliament appointed to take the decision. Within the bounds of legal reasonableness is the area in which the deciding authority has genuinely free discretion. If it passes those bounds, it acts ultra vires. The court must therefore resist the temptation to draw the bounds too tightly, merely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onable that no reasonable person would have taken that action, can the Court intervene." (emphasis supplied) 16. Similarly, the Apex Court in State of NCT of Delhi v. Sanjeev, (2005) 5 SCC 181, has held as under: "17. The court will be slow to interfere in such matters relating to administrative functions unless decision is tainted by any vulnerability enumerated above; like illegality, irrationality and procedural impropriety. Whether action falls within any of the categories has to be established. Mere assertion in that regard would not be sufficient. 18. The famous case commonly known as "the Wednesbury case [Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn., (1947) 2 All ER 680 : (1948) 1 KB 223 (CA)] " is treated as the landmark so far as laying down various basic principles relating to judicial review of administrative or statutory direction. 19. Before summarising the substance of the principles laid down therein we shall refer to the passage from the judgment of Lord Greene in Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn.[Associated Provincial Picture Houses Ltd. v. Wednesbury Corpn., (1947) 2 All ER 680 : (1948) 1 KB 223 (CA)] (KB a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luding the doctrine of proportionality which was a principle followed by certain other members of the European Economic Community. Lord Diplock observed in that case as follows : (All ER p. 950h-j) "Judicial review has I think developed to a stage today when, without reiterating any analysis of the steps by which the development has come about, one can conveniently classify under three heads the grounds on which administrative action is subject to control by judicial review. The first ground I would call 'illegality', the second 'irrationality' and the third 'procedural impropriety'. That is not to say that further development on a case-by-case basis may not in course of time add further grounds. I have in mind particularly the possible adoption in the future of the principle of 'proportionality' which is recognised in the administrative law of several of our fellow members of the European Economic Community;" Lord Diplock explained "irrationality" as follows : (All ER p. 951a-b) "By 'irrationality' I mean what can by now be succinctly referred to as 'Wednesbury unreasonableness'. It applies to a decision which is so outrageous in its defiance of logic or of accepted moral ..... X X X X Extracts X X X X X X X X Extracts X X X X
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