No adjudication allowed for IRP who have been replaced by CoC
Court Name -NCLAT/Company Appeal (AT)(Insolvency) No- 1340 of 2023
Key Issue- Operational (IBC matter (U/s 27)
Subject – No adjudication allowed for IRP who have been replaced by CoC
Parties- Partha Sarthy Sarkar vs Unit Trust of India Ltd & others
Bench comprising -Justice Ashok Bhushan and Shri Barun Mitra
Act-Section 27 of IBC States; Replacement of Resolution Professional by committee of Creditors
Fact of the case :-
By order dated 28th February 2022 CIRP commenced against the Corporate Debtor, M/S
Modern Syntex India Limited. The Appellant was appointed as the IRP who was also
confirmed as resolution professional. The CoC (Committee of Creditors) consist of
Respondent Number 1 to 3 in which specified undertaking of UNIT TRUST OF INDIA LTD
(SUUTI) have 74.64% vote share.
On 19th July ,2023 , an Email was sent by SUUTI asking the Resolution Professional to reduce
his fee as well as CIRP cost. Appellant by its email informed the SUUTI that he shall not be
able to reduce his fee.
The CoC made a request to Resolution Professional to convene a meeting of the CoC
Subsequently on 18th CoC meeting , a lender meeting held on 28th Aug’23 which was attended
by all the three members of the CoC where resolution was passed to replace the Appellant
by Mr Amit Goel who quoted minimum 2 Lakh
By another meeting of Lenders a resolution passed with 100% vote share to replace IRP.
Application was filed before the Adjudicating Authority being I.A.No 510/JPR/2023 for
approving replacement of Appellant with Mr Ankit Goel which application has been allowed
by the impugned order dated 27/09/23. Aggrieved by the said order, this Appeal has been
filed.
The submission of the Appellant that Appellant was not given opportunity to place all
relevant facts before the Adjudicatory Authority especially details as contained in the
minutes of Ist Sept’23 for illegal refusal of SUUTI to lodge ,FIR with regard to hypothecated
Assets of the corporate debtor in June 2018.
The Scheme of section 27 of IBC as delineated by the statute, it does not contemplate any
opportunity of hearing to the IRP be given by the Adjudicating Authority before approving the
proposal of new R.P.
Judgement;
➢ “The Appellant in his grounds has also contended that the Adjudicating Authority has not adverted to the resolution dated 01st September 2023 and has only relied on joint Lenders meeting dated 28th Aug’2023. There is no dispute between the Appellant and CoC that resolution was passed on Ist Sept ‘2023 in the 19th CoC meeting to replace the Appellant with another R.P. The Provisions of the Code has been fully complied with and the CoC having decided to replace the Appellant by CoCmeeting held on Ist September 2023. We don’t find any ground to interfere with theorder of the Adjudicating Authority.
”DISCLAIMER: i)This opinion/clarification note is based on the facts provided to us and the same is being issued without any knowledge of intent, prejudice, non-disclosure, misrepresentation, or concealment of facts if any. ii)We have not done investigation of correctness of facts and the limited opinion represents our understanding of the provisions of the law on the matter. The compliance mentioned above is not exhaustive and other compliance may also be involved depending on case to case basis .iii)The conclusions reached and views expressed are matters of opinion based on our understanding of the related laws, rules, notifications, Citations, circulars, etc. iv)Pranav Kumar & Associates, Company Secretaries, its partners, associates, employees or staff shall not be held liable for any action/ consequence arising out of any contrary view(s)taken by any other party or statutory authority