NCLAT approves CoC's resolution to replace IRP with new RP, directs CoC to clear dues promptly

The National Company Appellate Tribunal (NCLAT) approved the Committee of Creditors' (CoC) resolution to replace the Interim Resolution Professional (IRP) with a new Resolution Professional (RP), Mr. Mangesh V. Kekre. The CoC was directed to clear the IRP's dues promptly, and any fee disputes were to be borne by the Operational Creditor. The NCLAT upheld the Tribunal's order, allowing the appointment of the new RP to manage the Corporate Insolvency Resolution Process effectively.

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Issues:
1. Replacement of Interim Resolution Professional (IRP) by Committee of Creditors (CoC) under Section 22(3) of the Insolvency and Bankruptcy Code (I & B Code).
2. Dispute over the remuneration of the IRP leading to delay in the Corporate Insolvency Resolution Process.
3. Contempt application filed by the IRP for non-payment of fees.
4. Legal implications and directions provided by the National Company Appellate Tribunal (NCLAT) regarding the payment of dues to the IRP.
5. Appointment of a new Resolution Professional by the CoC.

Issue 1: Replacement of IRP by CoC
The CoC, with a 100% majority, passed a resolution seeking the replacement of the present IRP with a new RP, Mr. Mangesh V. Kekre. The retiring IRP did not object to his replacement, citing a previous NCLAT order directing the CoC to clear his dues. The CoC was directed to make the payment within two weeks. The Tribunal found no adverse information to oppose the approval of the CoC's resolution, thus allowing the replacement of the IRP.

Issue 2: Dispute over IRP's Remuneration
The CoC filed an IA stating that the IRP demanded a high fee which was not agreeable. The CoC offered a lower remuneration, leading to a delay in the process. The Tribunal directed the CoC to clear the IRP's dues without delay and recommended the replacement of the IRP with Mr. Mangesh V. Kekre. The Tribunal emphasized that any difference in fees should be borne by the Operational Creditor, not the CoC.

Issue 3: Contempt Application by IRP
The IRP filed a contempt application for non-payment of fees against the Committee of Creditors. The Tribunal directed the matter to be transferred to the Co-ordinate Bench for proper consideration and necessary orders.

Issue 4: NCLAT Directions
The NCLAT upheld the Tribunal's order directing the CoC to clear the dues of the IRP, emphasizing that the CoC must determine the dues in accordance with the law. The NCLAT did not interfere with the Tribunal's order, leading to the approval of the CoC's resolution for appointing a new RP.

Issue 5: Appointment of New Resolution Professional
The CoC recommended the appointment of Mr. Mangesh V. Kekre as the new Resolution Professional to manage the affairs of the Corporate Debtor and proceed with the Corporate Insolvency Resolution Process. The IA filed by the CoC for this purpose was admitted, and Mr. Kekre was appointed as the Resolution Professional.

In conclusion, the judgment addressed various issues related to the replacement of the IRP, disputes over remuneration, NCLAT directions, and the appointment of a new Resolution Professional, ensuring compliance with legal provisions and facilitating the progress of the Corporate Insolvency Resolution Process.

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