NCLAT Delhi: Resolution Professional Is An Aggrieved Person If NCLT Overturns His Decision
The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Shri Barun Mitra (Technical Member), held that the Resolution Professional (RP) is an aggrieved when the decision of the National Company Law Tribunal (“NCLT”) directly overturns his decision. Background Facts: The Corporate...
The National Company Law Appellate Tribunal (“NCLAT”), Principal Bench, comprising of Justice Ashok Bhushan (Chairperson) and Shri Barun Mitra (Technical Member), held that the Resolution Professional (RP) is an aggrieved when the decision of the National Company Law Tribunal (“NCLT”) directly overturns his decision.
Background Facts:
The Corporate Insolvency Resolution Process (CIRP) was initiated against the Corporate Debtor, and the Appellant was appointed as the Resolution Professional.
The Appellant released Form G, after which two Resolution Plans were received. Among these, the proposal submitted by the director of the Corporate Debtor to withdraw the CIRP was supported by 52.57% of homebuyers (Financial Creditors).
The Appellant rejected the Section 12A proposal after noting that only 52.57% of financial creditors had voted in favor of the proposal, falling short of the required 90% threshold under Section 12A of the IBC.
In response, the Authorized Representative of the homebuyers filed an application (IA No. 753 of 2023), contesting the Appellant's decision before the National Company Law Tribunal (NCLT).
Subsequently, the NCLT allowed the application (IA No. 753 of 2023) by setting aside the decision of the Appellant.
Aggrieved by the Order of the NCLT, the Appellant has filed an appeal before the National Company Law Appellate Tribunal (NCLAT).
NCLAT Verdict:
NCLAT, while allowing the appeal of the appellant, held that since in this case, the decision of the NCLT directly overturns the decision of the Resolution Professional, Hence, the Resolution Professional is an aggrieved party.
Furthermore, the NCLAT dismissed the contention of the Respondent, where they referred to a judgment from the Honorable Supreme Court in the case of Regen Powertech Private Limited vs. Giriraj Enterprises & Anr. In that case, the Supreme Court had ruled that “the Resolution Professional should not have filed the appeals” and “should have maintained a neutral stand”.
NCLAT observed that the present case requires the Resolution Professional to conduct the proceedings of the CoC according to the IBC and decide on the result of voting. Hence, it cannot be said that Resolution Professional is taking any side in the present case.
Case Title: Devendra Singh Vs. Homebuyers of Sidhartha Buildhome Pvt. Ltd. & Ors.
Case No.: Company Appeal (AT) (Ins.) No. 791 of 2023
Counsel for Appellant: Mr. Alok Dhir, Ms. Varsha Banerjee, Mr. Kanishk Khetan, Advocates.
Counsel for Respondents: Mr. Sumant Batra and Mr. Abhijeet Sinha