Tribunal emphasizes creditor approval in RP replacement, underscores procedure adherence in insolvency resolution process.

The Tribunal dismissed the application for the replacement of the Resolution Professional (RP) due to the absence of a resolution by the Committee of Creditors (CoC), emphasizing the importance of following the procedures outlined in the Insolvency and Bankruptcy Code. The decision stressed the significance of proper documentation and compliance with statutory requirements when seeking changes in the RP during the Corporate Insolvency Resolution Process (CIRP).

---

---

Issues:
Application for replacement of Resolution Professional without passing a resolution by the Committee of Creditors (CoC) - Maintainability of the application under section 22(2) or 27(2) of the Code.

Analysis:
The case involved an application filed by a CoC member seeking the replacement of the Resolution Professional (RP) in a Corporate Insolvency Resolution Process (CIRP). The applicant's voting share decreased from 100% to 24.07% due to a new claim by another financial creditor. The applicant alleged financial crisis, improper expenses management by the RP, and challenged the integrity of the RP. The applicant sought the replacement of the RP with a new RP and questioned the admission of the new financial creditor's claim. The RP, on the other hand, defended the application's maintainability, stating that no resolution was passed for his replacement as required under the Insolvency and Bankruptcy Code. The RP denied the allegations of improper claim admission and defended the reconstitution of the CoC.

The Tribunal considered whether the application for RP replacement was maintainable without a resolution passed by the CoC as per the provisions of the Code. It was noted that the applicant had not moved any resolution for the RP's replacement as required by the law. The Tribunal observed that without proof of passing a resolution for RP replacement, the application could not be entertained. The Tribunal highlighted that the CoC had been reconstituted, with the applicant holding only 25.07% voting share, while another financial creditor held 74.93%. The Tribunal emphasized that the allegations of fraud and improper claim admission were not relevant in an application for RP replacement under the Code. The Tribunal concluded that since the application lacked a resolution for RP replacement, it was not maintainable and dismissed it, granting the liberty to file a fresh application in accordance with the Code and Regulations.

In conclusion, the Tribunal dismissed the application for RP replacement due to the absence of a resolution by the CoC, emphasizing the importance of following the legal procedures outlined in the Insolvency and Bankruptcy Code. The decision highlighted the need for proper documentation and compliance with statutory requirements when seeking changes in the RP during the CIRP.

---