M/s. Jakson Limited vs M/s. Three C Universal Developers Pvt. Ltd.

A. “Pass an order directing the replacement of Mr. Rakesh Kumar Gupta as the Resolution Professional in the CIRP of Three C Universal Developers Pvt. Ltd.

B. Appoint an independent Resolution Professional to take over the CIRP.

C. Direct a forensic audit of all transactions executed during the tenure of Mr. Rakesh Kumar Gupta as RP and into the expenses undertaken by him in the CIRP till date.

D. Refund and restoration of fee taken by Mr. Rakesh Kumar Gupta.”

IA-3148/2024: Mr. P. Nagesh, Ld. Sr. Counsel appearing for the Applicant i.e. State Bank of India submitted that the State Bank of India had to move an application for advancement of hearing of the captioned IA from 21.08.2024 to today, as there being a question involved in the proceeding regarding continuation of existing RP and his competence to do so, the entire IRP is in limbo and nobody is certain about the fate of repayment plan. In his submission, in terms of the provisions of Section 105 of IBC, 2016, the Personal Guarantor has to prepare the repayment plan in consultation with the RP and the situation regarding the eligibility of the present RP to continue in the capacity being under cloud, the Resolution process is not progressing in any manner. Relying upon the judgment of Hon'ble NCLAT (Chennai Bench), he submitted that a suspended IP is left with no authority to discharge function in the capacity. The relevant excerpt of the Judgment passed by Hon'ble NCLAT in the matter of Mr. S Muthuraju Resolution Professional of Mr. Shakthinath Mariappan (Personal Guarantor) Vs. Mr. Arunachalam Tenzing [Comp App (AT) (CH) (Ins) No.115/2024], relied upon by Mr. P. Nagesh, Ld. Sr. Counsel reads thus:

“He contends to plead that the Order of Suspension dated 12th April 2023, will have prospective operation and will not apply to the Proceedings of CIRP, in which the Appellant has already been appointed as an IRP and thus he was supposed to be permitted to continue with the CIRP proceedings despite the order dated 12.04.2023, suspending him as IRP, passed by the IBBI.

As far as the contention of the Learned Counsel for the Appellant is concerned with regards his authority to function as IRP, in the CIRP Proceedings which has already been initiated prior to the order dated 12th April 2023, owing to the fact that the said Order of Suspension of his Authority to function as IRP by exercising the powers under Section 220(2) of the Code, would operate prospectively. The contention raised by the Counsel for the Appellant is not accepted by this Tribunal for the reason being that by an Order dated 12th April 2023 his Licence to function as an IRP before this Tribunal, it was as issued in his favour by the IBBI was suspended. We are of the view that the suspension will relegate back to the date on which the Registration was granted and as soon as the said Order of suspension as IRP was passed on 12th April 2023, he will lack an authority to still to function as an IRP even in the pending Proceedings or any Proceeding which is to be carried henceforth, since having held to be ineligible to function as such, his incapacity, would be his incapacity right from the date he was registered by IBBI.”

2.

Mr. P. Nagesh also relied upon the provision of Section 98 of IBC, 2016 and read out Sub-section 1 to 4 thereof. According to him, may be sub-sections 1 and 4 of IBC, 2016 deal with the different situations and when sub-section 1 of Section 98 of the Code provides for replacement of RP on the plea raised by Creditor or Debtor and sub-section 4 of Section 98 provides for his replacement on the application by the Creditors, but in the present situation, as on account of his suspension, the present RP cannot function in the capacity to deal with situation of either availability or non-availability of the repayment plan and in the given circumstances no meeting of the Creditors may be convened, thus the occasion of any application being moved by the Creditors may not arise.

3.

Mr. P. Nagesh emphasized with vehemence that the situation needs to be addressed by this Tribunal.

4.

Opposing the application Mr. Nandwani, Ld. Counsel appearing for the, Mr. Sandeep Bhatt, RP submitted that when the current RP Mr. Bhatt is representing many other Creditors despite being under suspension and no one has sought his replacement, it is not understood how the State Bank of India i.e. Creditor in the present application can raise such plea. He also submitted that the RP had uploaded reply to the application on DMS on 01.07.2024, but he is not aware that how the same is not reflected in the Case Information System. Mr. Nandwani also submitted that he has not concurred with the order passed by Hon'ble NCLAT and will have to study as to whether any appeal have been preferred against the same or not. Having submitted so, he urged for rejection of the captioned application. Surprisingly, when the application concern only the replacement of RP, the Ld. Counsel appearing for the for the Personal Guarantor also participated in the proceedings and joined the Ld. Counsel for the current RP to oppose the application. (At this stage, when we were dictating the order, Mr. Dewan interjected and submitted that he is neither supporting nor opposing the application). In view of such stand taken by Mr. Dewan, we leave the issue here only.

5.

In the wake of the aforementioned judgment of Hon'ble NCLAT, relied upon by Mr. P. Nagesh, Ld. Counsel appearing for the Applicant, we are left with no option but to replace the RP and order appointment of Mr. Kanti Mohan Rustagi, Registration No. IBBI/IPA-002/IP-N00097/2017-18/10240, Email. Kanti.rustagi@patanjaliassociates.com and Mob. No. 9871306829, IP as RP, in place of the current RP.