Raj Radhe Finance Limited vs Niharika Maheswari

IN THE MATTER OF: Raj Radhe Finance Ltd. ...Appellants Versus Niharika Maheswari ...Respondents (RP Amul Industries Pvt. Ltd.)

Present: For Appellant : Mr. Abhijeet Sinha Sr. Advocate with Mr. Karan Valecha, Mr. Aditya Shukla, Ms. Shivangi Khandelwal, Advocates. For Respondents : Mr. Nitesh Shrivastava, Advocate for RP.

ORDER

(Hybrid Mode)

26.03.2025: Heard counsel for the Appellant as well as the Ld. Counsel

for the Resolution Professional.

2. This appeal has been filed against the order dated 14.02.2025 by which

order the application filed by the appellant IA No. 1795/2024 under Section

27 of the IBC for replacement of the RP has been rejected. Ld. Counsel for the

Appellant submit that application for replacement was filed after conduct of

the voting on 09.11.2024 where resolution was passed with 78.86% vote-

share. The appellant itself has vote-shares of 68.18%. He submits that in view

of the approval of the Committee of Creditors for replacement of the RP,

Adjudicating Authority ought not to have rejected the application and the

order passed is against the scheme of the IBC.

3. Ld. Counsel for the RP submits that in so far as RP is concerned RP has

no right to object to the replacement however, in the application certain

allegations have been made against the RP which are refuted. Ld. Counsel for

the appellant submits that appellant is not pressing any allegations against

the RP who has been replaced. In view of the aforesaid, we do not find any

necessity to enter into the allegations in these proceedings.

4. The voting result has been placed at Page-166 which is as follows:-

"Voting Result:

Sl. Name of CoC Voting % of Votes % of Votes Abstained No. Member having %age of in favour against from Voting Power CoC of the Voting Member Resolution Resolution 1 Raj Radhe 68.18 68.18 - -

Finance Limited 2 CFM Asset 10.68 10.68 - -

Construction Private Limited 3 Sugan Enterprise 4.70 - - 4.70 Private Limited 4 RK Infralink LLP 11.74 - - 11.74

5 Parag Agro 4.70 - - 4.70 Products (Gujarat) Limited Total 100.00 78.86 - 21.14

The Members of CoC having voting share of 78.86% voted in favour of resolution while members of CoC having voting share of 21.14% abstained from voting on the resolution on the Agenda Item No.9"

With regard to the application, u/s 27 of Insolvency & Bankruptcy Code, the

law is well settled in CA(AT)(Ins) No. 1037/2022, Sumat Kumar Gupta Vs.

2 of 5 Company Appeal (AT) (Ins) No. 291 of 2025 Committee of Creditors. In paragraph 8 to 11 of the judgment following were

held:-

"8. Learned counsel for the Respondent has rightly relied on three decisions of this Appellate Tribunal. Firstly, in "Company Appeal (AT) (Ins) No. 749 of 2019, Punjab National Bank vs. Kiran Shah, IRP of ORG Informatics Ltd." wherein this Tribunal held following:-

"Having heard the learned counsel appearing on behalf of the Appellant and the learned counsel appearing on behalf of the 'Resolution Professional', we are of the view that the 'Committee of Creditors' is not required to record any reason or ground for replacing of the 'Resolution Professional', which may otherwise call for proceedings against such 'Resolution Professional'. For the purpose of proceedings reported to the 'Insolvency and Bankruptcy Board of India' (for short, 'the IBBI', the 'Committee of Creditors' cannot await the decision of the IBBI for the purpose of replacement. The 'Committee of Creditors' having decided to remove the 'Resolution Professional with 88% voting share, it was not open to the Adjudicating Authority to interfere with such decision, till it is shown that the decision of the 'Committee of Creditors is perverse or without jurisdiction. The 'Committee of Creditors' with majority voting share of 88% having decided to replace 'Mr. Kiran Shah', he cannot function as 'Resolution Professional', though he will be entitled to his fee and cost, if any, incurred by him in terms of the 'I&B Code'."

9. Further, second judgment relied by learned counsel for the Respondent is judgment of this Tribunal in "Company Appeal (AT) (Ins.) No. 497 of 2020, Bank of India vs. Nithin Nutritions Pvt. Ltd.", where after noticing the scheme of Section 27, this Tribunal has made following observations in Para 6 of the judgment:-

"6. In both the above provisions, the law nowhere says that the COC is required to give reasons. This appears to be also right. The reason is that relationship between the IRP/RP and the COC is that of confidence. If there 8 Company Appeals (AT) (Ins) Nos.497, 498, 499, 500 and 501 of 2020 is loss of confidence and combination is continued, the Corporate Debtor would be put to loss because of the bad relationship between IRP/RP with COC."

3 of 5 Company Appeal (AT) (Ins) No. 291 of 2025

10. From the decisions of this Tribunal, as noted above, it is clear that replacement of Resolution Professional is complete when required decision is taken by the CoC in its meeting with requisite majority. The submission of learned counsel for the Appellant that Section 27 does not exclude applicability of principles of natural justice does not commend us. When we look into the scheme of Section 27 it by implication exclude the principles of natural justice, it is clear from the scheme of Section 27 that the scheme nowhere provides for any opportunity to the Appellant for hearing. Therefore, it cannot be said that the erstwhile Resolution Professional is entitled to be heard by the Adjudicating Authority before taking decision.

11. Another judgment of this Tribunal relied by learned counsel for the Respondent is in the matter "Company Appeal (AT) (Insolvency) No. 1100 of 2020, Committee of Creditors of LEEL Electricals Ltd. Through State Bank of India vs. Leel Electricals Ltd. Through its Interim Resolution Professional, Arvind Mittal", where after considering the scheme of Section 27 of the I&B Code regarding requisites under Section 27, following has been observed:-

"Therefore, invoking of Section 27 and adopting a protracted procedure in that regard, as appears to have been done by the Adjudicating Authority, is unwarranted. This only has resulted in wastage of time and prolonging the CIRP Process. In the face of CoC resolution passed with more than the requisite majority, it cannot lie in the mouth of IRP that any of his legal rights have been infringed. It would have been wise on his part to bow to the commercial wisdom of the Committee of Creditors and quit gracefully. Be that as it may, there was no merit in the case set up by IRP before the Adjudicating Authority and the same was required to be dealt with without insisting upon filing of affidavit by the IRP in regard to the provision of law invoked to pass the resolution."

The issue raised in the appeal is fully covered by the aforesaid judgment. We

thus are of the view that order passed by Adjudicating Authority cannot be

4 of 5 Company Appeal (AT) (Ins) No. 291 of 2025 sustained. In result the appeal is allowed the order impugned dated

14.02.2025 is set aside I.A. No. 1795/2024 stand allowed.

It shall be open for the RP who has now been replaced to request for fee

and expenses as per the decision of the COC.

[Justice Ashok Bhushan] Chairperson

[Barun Mitra] Member (Technical)

[Arun Baroka] Member (Technical) harleen/NN

5 of 5 Company Appeal (AT) (Ins) No. 291 of 2025