Sunil Kumar Agrawal vs Allahabad Bank & Ors
- CitationCompany Appeal (AT) (Insolvency) No. 388 of 2018
Ratio decidendi
The rule this decision rests on
The Committee of Creditors, acting by a 100% voting share, may validly replace the existing resolution professional with another insolvency professional, including one who is the insolvency professional of the sole financial creditor, and the Adjudicating Authority's approval of such a change does not call for interference. Where the resolution professional is removed by the Committee of Creditors not for inefficiency but in order to obtain better assistance, the removal decision cannot be treated as an adverse order against the outgoing resolution professional. The outgoing resolution professional remains entitled to the fee and costs incurred for the period during which he performed the work, to be paid in accordance with law.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Allahabad Bank & Ors. ...Respondents
Present: For Appellant : Mr. Vinod Kumar Chaurasia, CA Mr. Sunil Kr. Agrawal, CS
ORDER
23.07.2018 This appeal has been preferred by the erstwhile 'Resolution
Professional' Mr. Sunil Kumar Agrawal, who was functioning as 'Resolution
Professional' in 'corporate insolvency resolution process' initiated against 'M/s.
Mansfield Cables Company Ltd.' (Corporate Debtor). He challenged the order
dated 10th July, 2018 passed by the Adjudicating Authority (National Company
Law Tribunal) New Delhi whereby the Adjudicating Authority approved the
decision of the 'Committee of Creditors' and appointed one Mr. Pankaj Khetan
as 'Resolution Professional' in place of the appellant.
Learned counsel appearing on behalf of the appellant submits that Mr.
Pankaj Khetan was the 'Insolvency Professional' of the sole 'Financial Creditor,
who has now been appointed as 'Resolution Professional'. However, on such
ground the appointment of Mr. Pankaj Khetan cannot be held to be illegal as he
having appointed by 100% voting share of the 'Committee of Creditors'.
After admission of an application under Section 7 or 9 or 10 of the
Insolvency & Bankruptcy Code, 2016 ('I&B Code', for short), an interim 2
resolution professional' is appointed who normally continues as 'Resolution
Professional, if the majority members of the 'Committee of Creditors' by voting
share approves his name. Otherwise, another person is to be proposed for
appointment as a 'resolution professional'. As per the provisions of the I&B
Code, it is always open to any 'Financial Creditor' to appoint 'insolvency
professional' to verify all the action and to assist the 'Committee of Creditors'.
Such being the position, if the 'Committee of Creditors' by 100% voting share
decided to change the existing 'Resolution Professional' by appointing the
'Insolvency Professional' and the Adjudicating Authority approves the same, no
interference is called for.
However, as the appellant Mr. Sunil Kumar Agrawal has not been removed
because of his inefficiency but because the 'Committee of Creditors' wanted to
appoint another person to get better assistance, the order passed by the
'Committee of Creditors' or the Adjudicating Authority cannot be treated to be
an adverse order against the appellant, Mr. Sunil Kumar Agrawal, who is also
entitled for the fee and cost incurred by him during the period he has performed
the work, which is to be paid in accordance with law. With this observation the
appeal is disposed of. No cost.
[Justice S.J. Mukhopadhaya] Chairperson
[ Justice Bansi Lal Bhat ] Member (Judicial)
/ns/sk/
Company Appeal (AT) (Insolvency) No. 388 of 2018
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