Kuldeep Verma vs Alliance Broadband Services Private Limited & Ors

Labh Singh, Member (Judicial)

The present application has been filed under Under section 60(5) of the Insolvency & Bankruptcy Code, 2016 read with Rule 11 of the NCLT Rules 2016 with the following prayers:

It has been submitted that this Tribunal, upon application filed by Alliance Broadband Services Private Limited under Section 7 of the IBC Code, vide order dated 18^th September 2019 admitted the petition for initiation of Corporate Insolvency Resolution Process of the Corporate Debtor. Since there was no resolution plan at the end of the CIRP period, the liquidation of the Corporate Debtor was directed vide order dated 06^th April 2022.

The Liquidator has carried out the liquidation process and has sold one major asset of the Company being 77500 shares of the Corporate Debtor. The Corporate Debtor has another major asset, being land at Tajpur. The residuary assets include certain Plant & Machinery, Furniture & Fittings, Office Equipment’s and Vehicles. The Liquidator has caused numerous advertisements for sale of the said assets; however, the same remained successful. In the meantime, the Disciplinary Committee of IBBI has passed an order on 7^th April 2025 wherein the registration of the applicant has been suspended for 2 years and such suspension was effective from 30 days of the order i.e from 6th May 2025. However, the Disciplinary committee order categorically recorded that for existing assignments, COC/SCC may decide on the continuation of his services. The applicant has relied upon a copy of order dated 7^th April 2025 which is Annexure-"A".

After receipt of the said order, the Liquidator convened SCC meeting vide notice dated 9^th April 2025 for the meeting to be held on 11^th April 2025. The applicant, vide email dated 10^th April 2025, circulated that he does not wish to act as liquidator of the Corporate. The Liquidator requested the SCC to propose the name of a new liquidator and the said issue could be discussed in the scheduled SCC meeting on 11^th April 2025. The applicant has relied upon copy of the email dated 10^th April 2025 which is Annexure-"B".

The Cisco one of the members of the SCC, vide email dated 11^th April 2025, proposed the cancellation of the meeting scheduled on 11^th April 2025 and sought for 2-3 week’s time for identification of another insolvency professional to manage the affairs. The Liquidator considered the request of CISCO and adjourned the SCC meeting till 23^rd April 2025 at 5 pm. A copy of the email of CISCO and the Liquidator both dated 11th April 2025 is Annexure-"C". On 23^rd April 2025, the CISCO once again requested the Liquidator to adjourn the meeting by another two weeks as they were still in search of a Liquidator. A copy of the email of CISCO dated 23rd April 2025 is Annexure-"D".

The SCC meeting was convened on 23^rd April 2025 and only representatives of Sony and workmen were present. The suspended Board was also present. However due to lack of quorum the said SCC meeting had to be once again adjourned till 5^th May 2025 at 5 pm. A copy of the email dated 23^rd April 2025 issued by the Liquidator to all the SCC members is Annexure-"E".

On 5th May 2025, one of the SCC members, the CISCO, vide e-mail again requested to schedule the meeting for 16^th May 2025 as they needed another 10 days to identify a liquidator. The Liquidator thereafter vide email of same date issued to all the SCC members informed that only Sony had joined the meeting and the meeting could not be held due to lack of quorum and as such the meeting was adjourned to 16^th May 2025. In the said email, the Liquidator also communicated to all members that the Corporate Debtor has proposed the name of one Ashish Giria as the Liquidator. A copy of the email dated 5^th May 2025 of CISCO as well as of the Liquidator dated 5^th May 2025 is Annexure-"F".

The said SCC meeting was once again convened on 16^th May 2025. The Corporate Debtor on 16^th May 2025 had issued an email stating that since they have already filed an application being IA 822/2025 seeking replacement of Liquidator and during pendency of the said application, the meeting should not be convened. The Corporate Debtor further stated that since the suspension has come in effect from 6^th May 2025, the Liquidator did not have the right to convene and hold the meeting on 16^th May 2025. Sony vide email dated 16^th May 2025 represented that it would not attend the SCC meeting scheduled on that date and also represented that in light of the Disciplinary Committee order dated 7^th April 2025, the liquidator cannot hold a meeting. There was no communication from CISCO. In the meeting, only Mr. Bose, being the representative of the employees, was present along with the suspended board. Thus, due to lack of quorum, the meeting could not be held. The applicant issued a detailed email in this regard to all SCC members vide its email dated 16^th May 2025. A copy of the email dated 16th May 2025 of the Liquidator to all the SCC members is Annexure- "G".

Thus, after the Disciplinary Committee order, the liquidator attempted to convene SCC meeting to finalise the new liquidator on four occasions, being on 11^th April 2025, 23^rd April 2025, 5^th May 2025 and 16^th May 2025; however, none of the meetings could happen due to lack of quorum and due to the SCC members not being in a position to decide and finalize the new liquidator.

The Applicant has already vide his email dated 10^th April 2025 informed all members the SCC that he is not desirous to continue as liquidator; however, from the above, the SCC has failed to come to a conclusion with regard to appointment of a new liquidator. Thus, there is no consensus amongst SCC members with regard to appointment of any Insolvency Professional as Liquidator even though nearly 35 days have expired from 10^th April 2025.

The liquidator cannot abandon the position of Liquidator and walk away from the scenario without a replacement being appointed. But the SCC has thoroughly failed to nominate and appoint a new liquidator. Therefore, in these circumstances, the Applicant has no option but to file the present application before this Tribunal for appointment of any Insolvency Professional from its empanelled list as the Liquidator of the CD in place of the Applicant.

Heard Learned Counsel for the applicant. We have gone through the entire record of the present application. We have also duly appreciated the law applicable on the facts and circumstances of this case.

The Regulation of 31A(11) of the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016 provides for replacement of liquidator, the relevant part of which is reproduced as under:

The SCC has failed to convene the meeting in compliance with regulation 31A (11). In this regard, we may refer to provision of section 16 of the General Clauses Act, 1897 which states as follows:

Thus, it could be seen section 16 of the General Clauses Act, 1897 would show that the Authority which has the power to appoint a person, equally has the power to suspend or dismiss that person, in the absence of any specific powers conferred thereto. Thus, by virtue of section 16 of the General Clauses Act, 1897 it is clear that this Adjudicating Authority has the power to dismiss or replace the liquidator since this Authority is vested with the powers under sections 33 and 34 of the IBC, 2016 to appoint a liquidator.

Next coming to the issue of the grounds on which the liquidator can be changed, the provisions of the IBC, 2016 does not explicitly state the grounds on which the liquidator can be removed. In the absence of the specific provisions under the IBC, 2016 we may resort to section 276 of the Companies Act, 2013 which states as follows:

Thus, as per Sub Section (2) of Section 276 of the Companies Act 2013, the Tribunal may transfer the work assigned to a liquidator to another company liquidator for reasons to be recorded in writing in case the liquidator has died or resigned or removed as the case may be.

In the instant case, the Disciplinary Committee of IBBI has passed an order on 7^th April 2025 wherein the registration of the applicant has been suspended for two years and such suspension has become effective from 30^th days i.e. from 6^th May 2025. Though in the instant case, the Disciplinary committee has recorded that for existing assignments, COC/SCC may decide on the continuation of his services; however, the applicant is not ready to continue with pending assignment and hence, he cannot be forced to continue with pending assignment. He has shown his bonafide not to continue even with pending assignments.

The SCC has not recommended the name of any Liquidator to be appointed as new liquidator. Even otherwise, we are not bound by the SCC recommendation in appointing a new Liquidator in place of existing liquidator in terms of Section 34 of IBC, 2016. The above said section clearly says that the appointment of Insolvency Professional as liquidator is to be done by the Adjudicating Authority. In accordance with the same, we think it more appropriate to appoint the Resolution Professional from the Insolvency and Bankruptcy Board of India panel to complete the process effectively and in a timely manner.

Thus, we order for change of liquidator and appoint Mr. Sudip Mitra with registration No.IBBI/IPA-001/IP-P00497/2017-18/10885, email ID: [email protected] Mobile No. 9433074450 as new liquidator for the Corporate Debtor in place of existing liquidator, Mr. Kuldeep Verma. We further direct Existing liquidator Mr Kuldeep Verma is directed to handover all the documents, papers and details pertaining to Corporate Debtor and liquidation process to the new liquidator immediately after he takes over charge as liquidator of the CD.

The new liquidator is directed to submit his consent in appropriate form in the registry within 3 days of receipt of the order and take charge of the liquidation process within a week from the receipt of the order.

All other members of SCC are directed to provide active and full support to the new liquidator in discharging his duties effectively in a time bound manner.

Accordingly, the application is allowed as above and disposed of.