Tribunal denies HDFC Bank's bid to swap Resolution Professionals without Committee of Creditors approval.

The Tribunal rejected HDFC Bank's application to replace the Interim Resolution Professional (IRP) with a new Resolution Professional (RP) due to the absence of a specific resolution by the Committee of Creditors (COC) approving the replacement. The judgment highlighted the importance of COC decisions in appointing or replacing Resolution Professionals under the Insolvency and Bankruptcy Code, emphasizing the necessity of a majority vote to confirm such appointments.

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Issues:
1. Application filed under Section 22(2) of the IBC, 2016 by HDFC Bank to replace the IRP with a new RP.
2. Opposition by the Operational Creditor to the replacement of IRP.
3. Interpretation of Section 22(2) of the IBC, 2016 and Rule 11 of NCLT Rules, 2016.
4. Analysis of the resolution passed by the COC regarding the replacement of IRP.

Issue 1 - Application to Replace IRP with New RP:
HDFC Bank filed an application under Section 22(2) of the IBC, 2016 seeking to appoint Mr. Ashok Kumar Juneja as the Resolution Professional (RP) in place of the existing Interim Resolution Professional (IRP), Mr. Mohd. Nazim Khan. The COC meeting disapproved the appointment of Mr. Khan as RP and HDFC Bank proposed Mr. Juneja as the replacement. However, the COC did not pass a specific resolution approving the replacement, leading to the Tribunal rejecting HDFC Bank's prayer to appoint Mr. Juneja as RP without the required majority vote of the COC.

Issue 2 - Opposition by Operational Creditor:
The Operational Creditor opposed the replacement of the IRP, arguing that Mr. Khan had performed well and that replacing him with a new RP would not be in the interest of justice. The Tribunal emphasized that the decision to confirm or replace the RP lies with the COC, which must pass a resolution with a majority vote of not less than 66% of the voting share of the Financial Creditor.

Issue 3 - Interpretation of Section 22(2) of the IBC, 2016 and Rule 11 of NCLT Rules, 2016:
The Tribunal analyzed Section 22(2) of the IBC, 2016, which empowers the COC to decide on the appointment or replacement of the RP by a majority vote. Rule 11 of NCLT Rules, 2016 was also considered, highlighting the Tribunal's inherent powers to ensure justice and prevent abuse of the Tribunal's process.

Issue 4 - Analysis of COC Resolution on IRP Replacement:
The Tribunal scrutinized the resolution passed by the COC, which disapproved Mr. Khan's appointment as RP but did not specifically approve Mr. Juneja as the replacement. Without the requisite majority vote confirming the new RP, the Tribunal ruled that HDFC Bank's request to appoint Mr. Juneja could not be accepted. The decision emphasized the importance of COC approval in such appointments under the IBC.

In conclusion, the Tribunal rejected HDFC Bank's application to replace the IRP with a new RP due to the lack of a specific resolution by the COC approving the replacement. The judgment underscored the significance of COC decisions in appointing or replacing Resolution Professionals under the IBC, emphasizing the need for a majority vote to confirm such appointments.

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