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Judgment
ORDER
IA-4269/ND/2024: The prayer made in the captioned application reads thus:-
“a. Allow the present Application under Section 35(1)(n) of IBC, 2016 read with Regulation 31(3) of the Liquidation Process Regulations, 2016 read with section 60 (5) of IBC 2016 and
b. Restrain the Respondent No.1 from voting in the SCC during the pendency of the present Application;
c. Declare that the Respondent No.1 is a related party to the Corporate Debtor;
d. Denude the Respondent No.1 of the voting share accorded to the Respondent No.1 along with the proceeds distributed during the liquidation process in the liquidation Process of Corporate Debtor;
e. Allow the Applicant/Liquidator to re-constitute the SCC in terms of the Regulation 31(3) of the Liquidation Process Regulations, 2016;”
Mr. Ramachandran Subramanian, Ld. Liquidator, who appeared in the matter in person, submitted that the creditor Edelweiss Asset Reconstruction Company Limited (EARCL) could write a letter to the Corporate Debtor guiding it regarding the constitution of certain committees. To buttress the plea, he made reference to the email dated 16.12.2015 to espouse that it (EARCL) could command the debtor in the matter of the constitution of certain committees. The email reads thus:-
He further submitted that by invoking the provisions of the SARFAESI Act, 2002, the EARCL disposed of certain properties of the Corporate Debtor, thus, became a related party. In our considered view, any creditor who extends the financial facility to a debtor can be concerned about the security of its debt and can instruct the Corporate Debtor to act in a particular manner, in the interest of the better financial health of the Corporate Debtor. It is a different issue that to what extent the Corporate Debtor could go by the instructions of the creditor, and it is not for us to comment upon such aspect in the present application. The issue which we are concerned with in the present application is that whether merely because the creditor disposed of the property of the debtor under the SARFAESI Act, 2002 or it write letter to the Debtor asking it could be treated as party related to the Corporate Debtor. The writing of letter by creditor to debtor commanding it or disposal of property of creditor by debtor can be no ground to treat creditor as related party.
Our attention is also drawn to the order dated 26.10.2018 passed by this Hon’ble Tribunal. The order reads thus:-
From the aforementioned order, it is clear that the issue regarding the EARCL being related party was raised long back, but could not find favour.
We may also not be oblivious of the fact that the CIRP in present matter commenced on 07.08.2017, and throughout the process, the EARCL remained member of CoC with 85.37% vote shares. It was the CoC with EARCL having the majority vote share, which appointed Mr. Ramachandran Subramanian as Liquidator.
Thereafter, till filing of the present application in 2024, when liquidation process commenced on 16.01.2020, Mr. Ramachandran Subramanian, Liquidator, never raised the issue of EARCL being the related party.
It was only after filing of IA-4349/ND/2020 and IA-5780/ND/2023 by EARCL for removal of Mr. Ramachandran Subramanian, from his position as liquidator that he has preferred present IA-4269/ND/2024. Thus, it would not be gainsaid that the act of the liquidator for filing the present application is counterblast of filing of application by the EARCL.
It can also be seen from IBBI (Liquidation Process) Regulations, 2016, that broadly the SCC has role only to advise the liquidator to discharge his function, and it is hardly at the helm of decision-making process. Once EARCL remained as a member of CoC during CIRP, when the CoC is at the helm of the decision-making process, we are unable to appreciate that how at this stage that, it being only part of an advisory body, its presence in SCC would affect the liquidation process. It may be correct that as per Regulation 31A(11) of the Liquidation Process Regulations, the SCC has the power to take a decision to remove the liquidator. Apparently, it is after the invocation of such power by SCC, that the liquidator has resorted to filing the present application. In the totality of the facts and the circumstances, we are not inclined to grant the relief sought in the application. The application is found misconceived and is rejected.
IA-5798/ND/2025: Our attention is drawn to the resolution dated 18.10.2024, in terms of which SCC could decide for the replacement of Mr. Ramachandran Subramanian, Liquidator, with Mr. Anil Kohli, RP. The resolution reads thus:-
The vote share in respect of the resolution has been placed on record at Page 37 of the application. The result of voting shares reads thus:-
As can be seen from Regulation 31A(11), the SCC can file an application before Tribunal to replace the liquidator with 66% vote share. In the present case, 92.35% vote share is in favour of the replacement of Mr. Ramachandran Subramanian as Liquidator. In view of such resolution and the provisions of Regulation 31A(11), we dispose of the application with direction that Mr Ramachandran Subramanian, Liquidator will be replaced with Mr. Anil Kohli having IBBI Registration No. IBBI/IPA-001/IP-P00112/2017-2018/10219 who has been proposed in the resolution passed by the SCC held on 17.10.2024-18.10.2024. The written consent of Mr. Anil Kohli is on record at Annexure A-4 of the application.
It is made clear that nothing averted in the application or observed hereinabove would be pursued as an adverse remark against Mr. Ramachandran Subramanian in any manner. Mr. Ramachandran Subramanian is directed to remain associated with the present liquidation process and extend all cooperation and assistance to the newly appointed liquidator. It goes without saying that whatever fee of Mr. Ramachandran Subramanian, Liquidator, would be paid in accordance with rules and regulations. The application stands disposed of.
IA-5263/ND/2023, IA-5254/ND/2024:- List on 12.01.2026. IA-4269/ND/2024 IA-5798/ND/2024, Contt. Pett-32/ND/2025, IA-4584/ND/2025, IA-4589/ND/2025, IA-5455/ND/2025, CA-18/ND/2025:- List on 16.02.2026.