Tribunal Upholds Decision to Replace Resolution Professional with Liquidator

The Tribunal upheld the Adjudicating Authority's decision to replace the appellant as the Resolution Professional and appoint Mr. T.S.N. Raja as the Liquidator. It was held that the Adjudicating Authority has the jurisdiction to remove the Resolution Professional if unsatisfied with performance, constituting non-compliance with Section 30(2) of the Insolvency and Bankruptcy Code. The appeal was dismissed, and no further interference was warranted.

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Issues Involved:
1. Jurisdiction of the Adjudicating Authority to replace the Resolution Professional.
2. Compliance with Sections 33 and 34 of the Insolvency and Bankruptcy Code, 2016.
3. Satisfaction of the Adjudicating Authority with the Resolution Professional's performance.
4. Procedures for appointing and replacing a Resolution Professional and Liquidator.

Issue-wise Detailed Analysis:

1. Jurisdiction of the Adjudicating Authority to Replace the Resolution Professional:
The appellant contended that the Adjudicating Authority exceeded its jurisdiction by replacing him as the Resolution Professional and not appointing him as the Liquidator. The appellant argued that as per Section 34(1) of the Insolvency and Bankruptcy Code, 2016 (I&B Code), the Adjudicating Authority is required to appoint the Resolution Professional as the Liquidator unless there are specific reasons for replacement under Section 34(4). The Tribunal, however, held that the Adjudicating Authority is empowered to remove the Resolution Professional if it is not satisfied with his performance, which amounts to non-compliance with Section 30(2) of the I&B Code.

2. Compliance with Sections 33 and 34 of the Insolvency and Bankruptcy Code, 2016:
The Tribunal discussed the relevant provisions for appointing and removing a Resolution Professional or Liquidator. Section 22 allows the Committee of Creditors (CoC) to appoint or replace the interim Resolution Professional. Section 27 provides the CoC with the power to replace the Resolution Professional if necessary. Section 34(1) states that the Resolution Professional shall act as the Liquidator unless replaced by the Adjudicating Authority under Section 34(4), which allows replacement if the resolution plan fails to meet the requirements of Section 30(2) or if the Board recommends replacement.

3. Satisfaction of the Adjudicating Authority with the Resolution Professional's Performance:
The Adjudicating Authority observed that the existing Resolution Professional did not assist to its satisfaction during various hearings. The Tribunal noted that the Resolution Professional scheduled the last CoC meeting close to the end of the CIRP period and filed for liquidation late. The Financial Creditor (State Bank of India) with 100% voting power expressed dissatisfaction with the Resolution Professional's assistance and supported the appointment of Mr. T.S.N. Raja as the Liquidator, who had been effectively performing his duties since his appointment.

4. Procedures for Appointing and Replacing a Resolution Professional and Liquidator:
The Tribunal elaborated on the procedures for appointing and replacing a Resolution Professional and Liquidator as per the I&B Code. The CoC can replace the interim Resolution Professional by a majority vote (Section 22). The Adjudicating Authority can replace the Resolution Professional if the resolution plan is rejected for not meeting Section 30(2) requirements or if the Board recommends replacement (Section 34(4)). The Tribunal concluded that the Adjudicating Authority acted within its jurisdiction by replacing the Resolution Professional due to dissatisfaction with his performance.

Conclusion:
The Tribunal upheld the Adjudicating Authority's decision to replace the appellant as the Resolution Professional and appoint Mr. T.S.N. Raja as the Liquidator. It emphasized that the Adjudicating Authority has the jurisdiction to remove the Resolution Professional if not satisfied with his functioning, which constitutes non-compliance with Section 30(2) of the I&B Code. The appeal was dismissed, and no interference was deemed necessary.

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