Bank Of Baroda vs Maa Tara Ispat Industries Pvt Ltd. ...
- CitationCompany Appeal (AT) (Insolvency) No. 868 of 2019
Ratio decidendi
The rule this decision rests on
Where the Committee of Creditors, by a 100% majority, has resolved to replace the Interim Resolution Professional under the Insolvency and Bankruptcy Code, 2016, the Adjudicating Authority is bound under Section 22 of the Code to effect that replacement, and it may not decline to do so on the basis of the Committee's decision alone. A Committee of Creditors ought not to record reasons adverse to the Interim Resolution Professional when replacing him, since such reasons may prejudice that professional's career; an order passed in disregard of the Committee's replacement decision, and of this principle, is liable to be set aside in appeal.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
IN THE MATTER OF: Bank of Baroda .... Appellant Vs M/s Maa Tara Ispat Industries Private Limited Through Mr. Pramod Kumar Singh .... Respondent
Present: For Appellant: Mr. Ritesh Khare, Advocate. Mr. Rahul Adlakha, Advocate.
For Respondent: Mr. N.P.S. Chawla, Advocate for IRP with Mr. Pramod Kumar Singh, IRP. Mr. Siddharth Murarka, FCS. Mr. Vinod Kumar Choursia, Advocate.
ORDER
12.09.2019 Heard Mr. Ritesh Khare, learned Counsel for the Appellant
and Mr. N.P.S. Chawla, learned Counsel for the 'Interim Resolution
Professional'.
Taking into consideration the fact that the 'Committee of Creditors' by
its majority decision of 100% has decided to replace Mr. Pramod Kumar
Singh, 'Interim Resolution Professional' by its decision dated 1st July, 2019,
we are of view that the Adjudicating Authority in accordance with the
provisions of Section 22 of the Insolvency and Bankruptcy Code, 2016 (for
short the I&B Code) should have replaced the 'Interim Resolution
Professional'. We are also of the view that the 'Committee of Creditors' should
not have given any reason against the 'Interim Resolution Professional',
...Page 1 which otherwise would have affected the career of the person. For the said
reason, we set-aside the impugned order dated 7th August, 2019. The
Adjudicating Authority will appoint the 'Resolution Professional', as proposed
by the 'Committee of Creditors' or nominate an independent 'Resolution
Professional' on its own, if no proceeding is pending. The order should be
passed within a week from the date of receipt of this order.
In the meantime, the present 'Interim Resolution Professional' will
continue.
So far as fees and cost incurred by the 'Interim Resolution Professional'
is concerned, the present 'Interim Resolution Professional' will place the
details before the 'Committee of Creditors', who will approve the same after
taking into consideration the evidence in support of it and will pay the
amount to the present 'Interim Resolution Professional'.
The Appeal stands disposed of with the aforesaid observations and
directions.
[Justice S. J. Mukhopadhaya] Chairperson
[Kanthi Narahari] Member (Technical)
Ash/GC
Company Appeal (AT) (Insolvency) No. 868 of 2019 Page 2
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