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Judgment
(Hybrid Mode)
Heard the Ld. Counsel appearing for the Appellants as well as Mr. Ashwani Kumar Gupta, erstwhile Resolution Professional, appearing-in-person.
This Company Appeal (AT) (CH) (INS) No. 211 / 2022, has been preferred by the Committee of Creditors challenging the order dated 06.04.2022, that was passed by Ld. NCLT, Special Bench – II, Chennai.
By order dated 06.04.2022, the Ld. Adjudicating Authority has directed for liquidation of the Corporate Debtor.
Ld. Counsel for the Appellants submitted that, Mr. Ashwani Kumar Gupta, who was appointed as the Resolution Professional in the CIRP of the Corporate Debtor, as he expressed his unwillingness to continue, which was considered in the 5th CoC Meeting held on 03.10.2020. The CoC resolved to appoint Mr. Sathiq Buhari and the Application for change of Resolution Professional was duly filed on 03.11.2020.
It is submitted by the Ld. Counsel for the Appellant that IA No. 128 (CHE) / 2021, that was filed by the erstwhile RP Mr. Ashwani Kumar Gupta, praying for liquidation and for exclusion of certain period, was without any authority of CoC.
The Ld. Adjudicating Authority heard the application and by the impugned order dated 06.04.2022, has passed an order for liquidation.
It is submitted that this Tribunal had passed an Interim Order on 08.07.2022, staying the order dated 06.04.2022 and the liquidation proceeding was thus stayed.
The erstwhile RP Mr. Ashwani Kumar Gupta appearing-in-person submits that, till the RP is replaced by the Ld. Adjudicating Authority, the earlier RP has to continue and hence, he has filed the application for liquidation. It is further submitted that, at present the RP is aggrieved only by the adverse observation, made against the RP in the impugned order. The erstwhile Resolution Professional has no objection, if the Liquidation is not continued and some Expression of Interest is received.
We have considered the submission of the Ld. Counsel appearing for the Appellant, as well as the erstwhile RP / R1 appearing-in-person and perused the records. From the fact brought on the record, it is on the record that, the CoC has passed a resolution for replacement of the RP and the application was also filed to that effect, before the Ld. Adjudicating Authority and during pendency of the said application, Liquidation Order has been passed.
It is further submitted by the Ld. Counsel for the Appellant that the CoC never decided to pass a resolution for Liquidation of the Corporate Debtor.
The resolution for replacement of the Resolution Professional having taken place and present is the case where a request was made by the RP expressing his unwillingness to continue as RP due to his old age.
We are of the view that, submission of the erstwhile RP appearing-in-person that, till the order is passed by the Ld. Adjudicating Authority, the RP was to continue can be accepted. But, in the present case, RP filing the application for liquidation was unsustainable, when CoC had already resolved to replace him. However, we are of the view that any adverse observations made against Mr. Ashwani Kumar Gupta, the erstwhile RP shall not be treated to be adverse to the erstwhile RP and the adverse observation to that extent shall stand expunged from the order.
In view of the aforesaid, we set aside the Order of Liquidation dated 06.04.2022 and the Appeal being Company Appeal (AT) (CH) (INS) No. 211 / 2022 is disposed of, by expunging the adverse observation against the RP Mr. Ashwani Kumar Gupta.
At this stage, the Ld. Counsel appearing for the new RP submitted that, he does not possess the AFA anymore.
In view of the aforesaid, the Ld. Counsel for the Appellant submits that, they shall convene a meeting and make a fresh recommendations and thereafter file a proper application. The Appeal is disposed of accordingly.