Supreme Court emphasizes integrity in appointing Resolution Professional under Insolvency & Bankruptcy framework

The Supreme Court directed the appointment of a new Resolution Professional by the National Company Law Tribunal within a week, emphasizing that the replacement should not cast doubt on the integrity of the professional being replaced. The Court clarified that the change should not reflect negatively on the professionalism or conduct of the individual being substituted. The impugned order was found to be incorrect and should not set a precedent for future cases. The civil appeal was disposed of, providing clarity on the correct procedure for appointing Resolution Professionals under the Insolvency and Bankruptcy framework.

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Issues Involved:
Appointment of Resolution Professional under the Insolvency and Bankruptcy Code, 2016.

Analysis:
The Supreme Court, comprising Hon'ble Mr. Justice Arun Mishra, Hon'ble Mr. Justice B.R. Gavai, and Hon'ble Mr. Justice Krishna Murari, addressed the issue of the appointment of a Resolution Professional under the Insolvency and Bankruptcy Code, 2016. The Court expressed dissatisfaction with the approach taken by the National Company Law Appellate Tribunal (NCLAT) in disqualifying a Resolution Professional solely based on their association with a particular entity and receiving pension benefits. The Court noted that the NCLAT's approach was not correct. However, considering the agreement of both parties' counsels, the Court directed the appointment of a new Resolution Professional by the National Company Law Tribunal (NCLT) within a week, in accordance with the provisions of the Insolvency and Bankruptcy Code, 2016.

The Supreme Court emphasized that the replacement of the Resolution Professional should not cast any doubt on the integrity of the professional being replaced. The Court clarified that the change in Resolution Professional should not be viewed as reflecting negatively on the professionalism or conduct of the individual being substituted. Additionally, the Court ruled that the impugned order, which was found to be incorrect in its approach, should not be considered as setting a precedent for future cases. Consequently, the civil appeal was disposed of by the Supreme Court, providing clarity on the correct procedure for appointing Resolution Professionals under the Insolvency and Bankruptcy framework.

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