In the case of Sandeep Kumar Gupta Resolution Professional Vs. Stewarts & Lloyds of India Ltd. & Anr. (Company Appeal (AT) (Insolvency) No. 263 of 2017), the Appellant was appointed as the Interim Resolution Professional, in the Respondent’s (Corporate Debtor) Corporate Insolvency Resolution Process, on the recommendation of the Corporate Debtor. While he was an RP, only one meeting was held wherein he was appointed as Resolution Professional (“RP”) on Committee of Creditor’s (“CoC”) approval. During the period of 180 days, within which the CIRP should be completed as per Section 12 of the Insolvency and Bankruptcy Code, 2016 (“IBC”), no other meetings were held, and no Resolution Plan were submitted. Before the completion of 180 days, RP submitted a report that the Corporate Debtor must go under liquidation under Chapter III of Part II of the IBC as there has been no recommendation from CoC to extend the prescribed time limit of the proceedings and no Resolution Plan has been submitted.
The National Company Law Tribunal (“NCLT”), in this case, has held that a different person shall be appointed as a Liquidator because RP has failed to perform his duties properly and he was appointed on the recommendation of the CD. It has been understood by the Court that the non-submission of any Resolution Plan was due to lack of advertisement which was RP’s duty. The Insolvency and Bankruptcy Board of India (“Board”) was requested to recommend a name for a Liquidator.
The Appellant filed an appeal before the National Company Law Appellate Tribunal (“NCLAT”) and stated that he has performed his duties properly and has made sure that the advertisement issued to invite Resolution Plan was done properly. He also argued that the Adjudicating Authority has power under the IBC to appoint another person as liquidator only when “the resolution plan submitted by the resolution professional under Section 30 was rejected for failure to meet the requirements mentioned in Section 30(2); or when the Board recommends the replacement of a resolution professional Adjudicating Authority for reasons to be recorded in writing” and in his case none of the eventualities were triggered.
The NCLAT has held that the RP’s actions did not construe as misconduct but the appointment of different person as a Liquidator by the NCLT was justified as it was well within its jurisdiction to appoint different person, if the performance is not satisfactory. Lastly, the Court has also held that if any appointment is made outside of the list provided by the Board then it should be considered as an appointment made on the recommendation of the Board.
Consequently, the Court, through this judgement, has given wide power to the Adjudicating Authority to appoint different person as Resolution Professional/ Liquidator if the performance is not satisfactory and has left it on the Courts to decide what falls within the meaning of satisfactory performance.