Skip to main content

Insolvency - CoC is not bound to record reason for replacing the IRP with another RP

In Power Finance Corporation Limited vs Mahendra Kumar Khandelwal, an Application was filed by the respondent IRP of the Corporate Debtor herein seeking to pass directions to the COC of the corporate debtor to reconsider their decision and to continue with the applicant as the RP.

The NCLT observed that from a plain reading of section 22 of the I & B code which has been confirmed by several judgments of the Supreme Court, is clear that the CoC is conferred with the power of replacing the IRP with another resolution professional and no reason it's to be recorded by the CoC for effecting such replacements. It is the prerogative of the CoC whether to continue with the IRP as the RP or to replace the IRP with another RP. 

The only pre-requisites to be made under section 22 of the code are as under :–

1) The CoC in its first meeting shall pass the resolution with at least 66% votes.

2) Written consent shall be obtained from the proposed RP in the specified form.

3) The CoC shall file an application before the Adjudicating Authority for appointment of the proposed RP.

4) The Adjudicating Authority shall forward the name of the proposed RP to the IBBI for its confirmation and make the appointment after the confirmation.

The NCLAT observed that as in this case the first 3 steps have been completed and the fourth step is awaited, there is no infirmity with the decision of the CoC in replacing the IRP and appointing a new RP in his place.

Comments

Post a Comment

Most viewed this month

One Sided Clauses In Builder-Buyer Agreements Is An Unfair Trade Practice

In CIVIL APPEAL NO. 12238 OF 2018, Pioneer Urban Land & Infrastructure Ltd. vs Govindan Raghavan, an appeal was filed before the Supreme Court  by the builder against the order of the National Consumer Forum. The builder had relied upon various clauses of the Apartment Buyer’s Agreement to refute the claim of the respondent but was rejected by the commission which found the said clauses as wholly one-sided, unfair and unreasonable, and could not be relied upon. The Supreme Court on perusal of the Apartment Buyer’s Agreement found stark incongruities between the remedies available to both the parties. For example, Clause 6.4 (ii) of the Agreement entitles the Appellant – Builder to charge Interest @18% p.a. on account of any delay in payment of installments from the Respondent – Flat Purchaser. Clause 6.4 (iii) of the Agreement entitles the Appellant – Builder to cancel the allotment and terminate the Agreement, if any installment remains in arrears for more than 30 da...
Post a Comment
Read more

Inherited property of childless hindu woman devolve onto heirs of her parents

In Tarabai Dagdu Nitanware vs Narayan Keru Nitanware, quashing an order passed by a joint civil judge junior division, Pune, the Bombay High Court has held that under Section 15 of the Hindu Succession Act, any property inherited by a female Hindu from her father or mother, will devolve upon the heirs of her father/mother, if she dies without any children of her own, and not upon her husband. Justice Shalini Phansalkar Joshi was hearing a writ petition filed by relatives of one Sundarabai, who died issueless more than 45 years ago on June 18, 1962. Article referred:http://www.livelaw.in/property-inherited-female-hindu-parents-shall-devolve-upon-heirs-father-not-husband-dies-childless-bombay-hc-read-judgment/
Post a Comment
Read more

Court approached in the early stages of arbitration will prevail in all other subsequent proceedings

In National Highway Authority of India v. Hindustan Steelworks Construction Limited, the Hon'ble Delhi High Court opined that once the parties have approached a certain court for relief under Act at earlier stages of disputes then it is same court that, parties must return to for all other subsequent proceedings. Language of Section 42 of Act is categorical and brooks no exception. In fact, the language used has the effect of jurisdiction of all courts since it states that once an application has been made in Part I of the Act then ―that Court alone shall have jurisdiction over arbitral proceedings and all subsequent applications arising out of that agreement and arbitral proceedings shall be made in that Court and in no other Court. Court holds that NHAI in present case cannot take advantage of Section 14 of the Limitation Act, 1963 for explaining inordinate delay in filing present petition under Section 34 of this Act in this Court.
Post a Comment
Read more