Vemuri Ravi Kumar vs Pavan Kankani

PER: BENCH

The present application has been filed by the Stakeholders' Consultation Committee (SCC), represented by its Member, Mr. Vemuri Ravi Kumar, seeking replacement of the Liquidator and, therefore, no respondents were originally arrayed. However, this Hon'ble Tribunal, vide order dated 13.06.2025, directed the Learned Counsel for the Applicant to implead the present Liquidator, Mr. Pavan Kankani, as a Respondent in the present I.A. Accordingly, the present Liquidator has been impleaded as a party Respondent to this I.A.

The following are the grounds stated for removal of the Liquidator:

The Liquidator filed the counter contending that the present Interlocutory Application is not maintainable either in law or on facts and is liable to be dismissed in limine on the following grounds:

The present application has been filed by a single member of the Stakeholders' Consultation Committee ("SCC") without any due authorization, mandate, or resolution passed by the SCC as a collective body. It is further contended that the SCC is required to function and take decisions through a collective decision-making process. Any unilateral action by an individual member, without the approval of the SCC, is contrary to law and renders the present application invalid and unsustainable.

The Applicant has failed to place on record any documentary evidence to substantiate the alleged meeting of the SCC which is claimed to have resulted in a resolution for removal of the Respondent as Liquidator.

In the absence of a valid notice convening the meeting, an attendance sheet, or duly signed minutes of the alleged meeting, the said meeting and any purported resolution claimed to have arisen therefrom are void ab initio.

It is further submitted that the present application is a desperate, vexatious, and mala fide attempt to mislead this Tribunal. The application has been filed with the sole intent of obstructing and delaying the adjudication of the Respondent's application seeking reimbursement of fees and expenses, which is presently pending before this Tribunal as IA No. 2401 of 2024. The Respondent/Liquidator further contends that the Applicant's action is an abuse of the judicial process of law.

With regard to the unsubstantiated allegation made by the Applicant that "the Liquidator has not performed his duties and is only charging fees", the Liquidator submitted that the said statement is wholly baseless, false, and a deliberate misrepresentation of facts. The Respondent, in his capacity as Liquidator, has consistently and diligently taken all necessary steps to advance the liquidation process strictly in accordance with law.

All minutes of the SCC meetings evidencing the actions undertaken by the Liquidator have already been placed on record before this Hon'ble Tribunal as part of the Respondent's fee application and are being relied upon herein as well by the Liquidator for the proper and effective adjudication of the present application, in the interest of justice.

The Liquidator has stated that the Minutes of the Meetings filed along with the Reply Affidavit clearly show that he regularly convened and conducted meetings of the Stakeholders' Consultation Committee ("SCC") and kept the members informed about the progress of the liquidation process. During these meetings, the Liquidator repeatedly requested the SCC members to take decisions on the future course of action, including approval for release of funds for necessary steps such as recovery of receivables and carrying out the mandatory valuation of the Corporate Debtor's assets, thereby directly impeding and delaying the liquidation proceedings.

The Liquidator further submits that the Applicant's claim of being an "innocent" stakeholder is not correct. The current delay has happened only because the SCC, of which the Applicant is a member, has not taken any action. This application appears to have been filed just to harass the Liquidator and to avoid paying the legitimate outstanding dues.

The Liquidator submits that he has no personal interest in continuing as the Liquidator of the Corporate Debtor. However, in the interest of natural justice and fairness that the legitimate fees and expenses incurred by him while performing his duties during the Corporate Insolvency Resolution Process and the Liquidation Process must be paid before his replacement takes place. It is further submitted that upon clearance of the outstanding dues and reimbursement of expenses lawfully incurred, the SCC members shall be at liberty to propose the appointment of any other Insolvency Professional in accordance with law.

In the above backdrop, we heard Dr. Uma Shanker Gollapudi, Ld. Counsel for the Applicant and Mr. V. Ravi Kumar, Ld. Counsel for the Liquidator, and perused the record.

This Interlocutory Application has been filed by a member of the Stakeholders' Consultation Committee (SCC) seeking replacement of the present Liquidator. Initially, no Respondent was made a party to the Application. However, as directed by this Tribunal vide order dated 13.06.2025, the present Liquidator, Mr. Pavan Kankani, was impleaded as a Respondent.

The Applicant has made several allegations against the Liquidator regarding non-performance of duties, including failure to obtain books of accounts, failure to take steps against non-cooperating directors, non-recovery of assets, non-compliance with directions of this Tribunal, and refusal to file appeals and applications for extension of the liquidation period. The Applicant has also stated that the SCC passed a resolution for replacement of the Liquidator.

The Liquidator has filed a detailed reply denying all the allegations. He has questioned the maintainability of the Application, stating that it was filed without proper authorization of the SCC and without any valid resolution. He has also contended that the Application is mala fide and intended to delay the decision on his pending fee and expense reimbursement application.

After hearing both sides, it is clear that there are serious allegations by the Applicant and serious counter-allegations by the Liquidator. Deciding these issues would require a detailed examination of disputed facts. The issue of payment of fees and reimbursement of expenses claimed by the outgoing Liquidator shall be decided separately in IA 2401/2024 in accordance with law and shall not affect the implementation of this order.

However, this Tribunal is of the view that the liquidation process of the Corporate Debtor should not suffer or get delayed due to disputes between the stakeholders and the Liquidator. The liquidation process must move forward in a smooth and time-bound manner.

Therefore, without going into the merits of the allegations or the defences raised, and only in order to ensure progress of the liquidation process, this Tribunal finds it appropriate to replace the present Liquidator.

Accordingly, we pass the following directions:

a. Mr. Pavan Kankani is hereby replaced as the Liquidator of the Corporate Debtor.

b. Mr. K. Rajaram Mohan Dev, Insolvency Professional, having IBBI Registration No. IBBI/IPA-001/IP-P-02166/2021-2022/13789, #R/o Flat No.301, Unit 30, Malaysian Township, Opp: Forum Mall, Kukatpally, Hyderabad, Telangana – 500072, email id: [email protected] Mob. No. 9000221124, who has given his consent on 04.05.2025, is hereby appointed as the new Liquidator. His AFA will expire on 31.12.2025.

c. The outgoing Liquidator shall hand over all records, documents, data, and assets of the Corporate Debtor to the newly appointed Liquidator within two weeks from the date of receipt of this order.

d. It is clarified that this order has been passed only to facilitate the continuation of the liquidation process and does not amount to any finding on the conduct or allegations against either party.

e. The Application is allowed to the above extent. No order as to costs.