Mr Nipan Bansal Former Resolution ... vs M/S Cheema Spintex Limited Through Its ...

Mr. Nipan Bansal, Former Resolution Professional, M/s Cheema Spintex Limited ...Appellant

Vs

1. M/s Cheema Spintex Limited ...Respondent No.1 Through its Liquidator Mr. Arun Gupta

2. Mr. Arun Gupta ...Respondent No.2 Liquidator, M/s Cheema Spintex Limited

3. IDBI Bank Limited ...Respondent No.3

4. Punjab National Bank ...Respondent No.4

(Arising out of Order dated 08.05.2025 passed by the Adjudicating Authority (National Company Law Tribunal, Chandigarh Bench) in IA No. IA(IBC)(LIQ)/18(CH)2024 in CP(IB) No.132/Chd/Chd/2023)

For Appellant: Dr. Rajansh Thukral, Mr. Sidharth Thukral, Advocates

For Respondent: Mr. Anand Varma, Mr. Ayush Gupta and Ms. Priyanshi Goel, Advocates for R-3. Mr. Gopal Jain, Mr. Shubham Gupta Advocates for R-1 & 2

1 JUDGEMENT

Per Justice N. Seshasayee, Member (Judicial)

1. This appeal filed by the liquidator involves a short question: whether the

reliance of the Adjudicating Authority on a circular of the IBBI, dated

18.07.2023 to change the liquidator and to appoint a liquidator of its

choice is legally permissible.

2.1 On 12.07.2024, the CD was put to liquidation in by a resolution of the CoC

in its second meeting. The appellant, who was hither to the Resolution

Professional, gave his consent to be the liquidator as contemplated by

Sec.34(1) of the IBC. Based on the CoC's decision, the Appellant filed an

application bearing IA (IBC)(LIQ)/18(CH)2024 before the NCLT,

Chandigarh, seeking liquidation of the Corporate Debtor and praying for

his appointment as liquidator along with the written consent of the

appellant in Form AA.

2.2 At the relevant time was in vogue a communication/letter of the IBBI dated

18.07.2023, which advocated that in certain circumstances, it may be

appropriate to appoint a liquidator other than the RP. This letter became

relevant when the Adjudicating Authority considered application for

ordering liquidation.

2.3 On 08.05.2025, the Adjudicating Authority ordered liquidation of the CD.

However, as regards appointing the appellant as the liquidator, relying on

the above referred to letter or the circular of the IBBI, dated 18.07.2023,

2 the Adjudicating Authority chose to replace the appellant and appointed

the second respondent as the liquidator. This change in appointment was

made despite the CoC recommending the appointment of the appellant as

the liquidator, more importantly, when the appellant was not facing any

disciplinary proceedings and has also given his consent to be a liquidator

as required under Sec.34 (1) of the IBC.

3. Since the letter or the communication of the IBBI dated 18.07.2023 had

come in the way of appointing the appellant as the liquidator, he filed CWP

No. 14348 of 2025 before the Hon'ble Punjab & Haryana High Court

challenging the basis of the decision, including the applicability of the IBBI

letter dated 18.07.2023. On 19.05.2025, the High Court dismissed the

writ petition and directed that the alternative statutory remedy available

under the IBC might be pursued by the appellant. This is the

circumstances in which the appellant has come forward with the present

appeal. The challenge in essence was to the legality and validity of the

letter of the IBBI dated 18.07.2023.

4. The second respondent submits that he has been appointed as the

liquidator by the Adjudicating Authority, and claims that he has made

substantial progress in the liquidation process, including preparation of

the liquidation estate, asset memorandum, verification of claims, and that

he is initiating steps for sale of assets.

5. The 3rd Respondent is M/s IDBI with over 92% voting share in the CoC,

and it states that it has no objection to respondent 2 continuing as the

3 Liquidator and that any delay in the liquidation process will lead to

deterioration in the value of assets of the Corporate Debtor.

6. The learned counsel for the appellant submitted that the first bench of this

tribunal vide its Order dated 01.08.2025 in Manish Jaju Case Vs CoC

and others [C.A.(AT)(Ins.) 1165 of 2025] has held that the IBBI does not

have the authority to override the statutory scheme for appointing a

liquidator as envisaged and embodied under Sec. 34(4) IBC. When the

cloud over the appointment of the appellant as the liquidator is thus

removed, then the appellant alone has to be appointed as the liquidator.

7. The counsel for respondents 2 and 3 stuck to the stands taken in their

respective replies.

8. The cloud over the appointment of the appellant might have been removed

vide the order in Manish Jaju case, yet we do not consider it necessary

to appoint the appellant as the liquidator in the middle of the liquidation

process. The reasons are:

a) The appellant does not have any vested right to be appointed as the

liquidator.

b) It may not be appropriate to change the liquidator in the middle of

the liquidation process as there will be cost implications, more so

when the 3rd respondent, with majority voting share far in excess of

66% is happy with the second liquidator.

c) The Adjudicating Authority apparently has felt bound by the letter

of the IBBI dated 18.07.2023 and appointed the 2nd respondent as

the liquidator, and was not seen to assert any exclusive authority to

4 appoint a liquidator superseding the right of the CoC to replace the

resolution professional for functioning as the liquidator. The 3rd

respondent apparently has appreciated the circumstances in which

the Adjudicating Authority has decided to replace the appellant with

the 2nd respondent. In the Order of this Tribunal in a batch of two

appeals in Omkara Asset Reconstruction Pvt. Ltd. Vs Amit Vijay

Karia & another, [C.A.(AT)(INS) 914 of 2025 and 915 of 2025,

dated 01.12.2025], we have held that the Adjudicating Authority

does not have any authority to appoint a resolution professional for

acting as a liquidator overlooking the choice of the CoC. The second

respondent, though had a right to challenge the appointment of the

2nd respondent, yet is not concerned about who functions as the

liquidator, and is only seen to be keen to complete the liquidation

process. The appellant therefore, cannot claim any right to impose

his wish to act as a liquidator on the 3rd respondent.

9. In conclusion, we find no merit in the appeal and the same is dismissed,

however, without costs.

[Justice N. Seshasayee] Member (Judicial)

[Arun Baroka] Member (Technical)

[Indevar Pandey] Member (Technical) rs/sk

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