Raj Radhe Finance Ltd. & Anr. vs Niharika Maheswari & Anr.

“Voting Result:

Sl. No.	Name of CoC Member having Voting Power	Voting %age of CoC Member	% of Votes in favour of Resolution	% of Votes against the Resolution	Abstained from Voting
1	Raj Radhe Finance Limited	68.18	68.18	-	-
2	CFM Asset Construction Private Limited	10.68	10.68	-	-
3	Sugan Enterprise Private Limited	4.70	-	-	4.70
4	RK Infralink LLP	11.74	-	-	11.74
5	Parag Agro Products (Gujarat) Limited	4.70	-	-	4.70
Total		100.00	78.86	-	21.14

The Members of CoC having voting share of 78.86% voted in favour of resolution while members of CoC having voting share of 21.14% abstained from voting on the resolution on the Agenda Item No.9”

“8.

Learned counsel for the Respondent has rightly relied on three decisions of this Appellate Tribunal. Firstly, in “Company Appeal (AT) (Ins) No. 749 of 2019, Punjab National Bank vs. Kiran Shah, IRP of ORG Informatics Ltd.” wherein this Tribunal held following:-

“Having heard the learned counsel appearing on behalf of the Appellant and the learned counsel appearing on behalf of the ‘Resolution Professional’, we are of the view that the ‘Committee of Creditors’ is not required to record any reason or ground for replacing of the ‘Resolution Professional’, which may otherwise call for proceedings against such ‘Resolution Professional’. For the purpose of proceedings reported to the ‘Insolvency and Bankruptcy Board of India’ (for short, ‘the IBBI’, the ‘Committee of Creditors’ cannot await the decision of the IBBI for the purpose of replacement. The ‘Committee of Creditors’ having decided to remove the ‘Resolution Professional with 88% voting share, it was not open to the Adjudicating Authority to interfere with such decision, till it is shown that the decision of the ‘Committee of Creditors is perverse or without jurisdiction. The ‘Committee of Creditors’ with majority voting share of 88% having decided to replace ‘Mr. Kiran Shah’, he cannot function as ‘Resolution Professional’, though he will be entitled to his fee and cost, if any, incurred by him in terms of the ‘I&B Code’.”

9.

Further, second judgment relied by learned counsel for the Respondent is judgment of this Tribunal in “Company Appeal (AT) (Ins.) No. 497 of 2020, Bank of India vs. Nithin Nutritions Pvt. Ltd.”, where after noticing the scheme of Section 27, this Tribunal has made following observations in Para 6 of the judgment:-

“6.

In both the above provisions, the law nowhere says that the COC is required to give reasons. This appears to be also right. The reason is that relationship between the IRP/RP and the COC is that of confidence. If there 8 Company Appeals (AT) (Ins) Nos.497, 498, 499, 500 and 501 of 2020 is loss of confidence and combination is continued, the Corporate Debtor would be put to loss because of the bad relationship between IRP/RP with COC.”

10.

From the decisions of this Tribunal, as noted above, it is clear that replacement of Resolution Professional is complete when required decision is taken by the CoC in its meeting with requisite majority. The submission of learned counsel for the Appellant that Section 27 does not exclude applicability of principles of natural justice does not commend us. When we look into the scheme of Section 27 it by implication exclude the principles of natural justice, it is clear from the scheme of Section 27 that the scheme nowhere provides for any opportunity to the Appellant for hearing. Therefore, it cannot be said that the erstwhile Resolution Professional is entitled to be heard by the Adjudicating Authority before taking decision.

11.

Another judgment of this Tribunal relied by learned counsel for the Respondent is in the matter “Company Appeal (AT) (Insolvency) No. 1100 of 2020, Committee of Creditors of LEEL Electricals Ltd. Through State Bank of India vs. Leel Electricals Ltd. Through its Interim Resolution Professional, Arvind Mittal”, where after considering the scheme of Section 27 of the I&B Code regarding requisites under Section 27, following has been observed:-

“Therefore, invoking of Section 27 and adopting a protracted procedure in that regard, as appears to have been done by the Adjudicating Authority, is unwarranted. This only has resulted in wastage of time and prolonging the CIRP Process. In the face of CoC resolution passed with more than the requisite majority, it cannot lie in the mouth of IRP that any of his legal rights have been infringed. It would have been wise on his part to bow to the commercial wisdom of the Committee of Creditors and quit gracefully. Be that as it may, there was no merit in the case set up by IRP before the Adjudicating Authority and the same was required to be dealt with without insisting upon filing of affidavit by the IRP in regard to the provision of law invoked to pass the resolution.”