Applicant Denied Request to Remove Resolution Professional under Insolvency Law

The Tribunal dismissed the application seeking removal and replacement of the Resolution Professional, citing the Applicant's lack of entitlement under the relevant sections of the Insolvency and Bankruptcy Code, 2016. The Tribunal emphasized that disciplinary proceedings against the Resolution Professional fall under the jurisdiction of the Insolvency and Bankruptcy Board of India (IBBI) and not the Adjudicating Authority. It clarified the IBBI's authority to handle complaints and impose penalties for misconduct, ultimately denying the Applicant's request for a change of Resolution Professional without costs.

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Issues:
1. Application seeking removal and replacement of Resolution Professional.
2. Allegations of suppression of facts and misconduct against Resolution Professional.
3. Jurisdiction of the Tribunal in disciplinary proceedings against Resolution Professional.
4. Applicability of Sections 217, 218, and 220 of the Insolvency and Bankruptcy Code, 2016.

Analysis:
1. The application was filed under Section 27 r/w. Section 60(5) of the IBC, 2016, by the Applicant seeking the removal and replacement of the Resolution Professional due to alleged suppression of facts about contempt proceedings and misconduct. The Applicant also requested reporting the conduct of the Resolution Professional to the IBBI and staying frivolous arbitration proceedings. The Tribunal noted that the Applicant was not entitled to seek replacement of the Resolution Professional under the mentioned sections of the IBC, 2016.

2. The Applicant contended that the Resolution Professional had not disclosed the contempt proceedings against him and was ineligible for the position. The Respondent argued that the RP had not committed any contempt and had valid authorization for assignment. The Tribunal observed that disciplinary proceedings against the RP fall under the jurisdiction of the IBBI and not the Adjudicating Authority. The Tribunal dismissed the application as the Applicant failed to establish grounds for the removal of the Resolution Professional.

3. The Tribunal highlighted the provisions of Sections 217, 218, and 220 of the IBC, empowering aggrieved parties to file complaints with the IBBI regarding RP misconduct. The IBBI can then direct investigations and constitute disciplinary committees to impose penalties if necessary. The Tribunal emphasized that the IBBI is the competent authority for disciplinary actions against Resolution Professionals, reinforcing that the Adjudicating Authority cannot enforce disciplinary proceedings.

4. Considering the lack of merit and sustainability of the Applicant's request for a change of RP, the Tribunal dismissed the application (IA/971/2020) without imposing any costs. The judgment clarified the legal framework governing the removal and disciplinary actions against Resolution Professionals under the Insolvency and Bankruptcy Code, 2016.

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