2022 (4) TMI 309 - AT - Insolvency and Bankruptcy

Tribunal Upholds Resolution Professional's Facilitative Role in Insolvency Process

Sharavan Kumar Vishnoi Versus Upma Jaiswal & Ors. And Kumari Durga Memorial Sansthan Versus Shravan Kumar Vishnoi & Ors.

Sharavan Kumar Vishnoi Versus Upma Jaiswal & Ors. And Kumari Durga Memorial Sansthan Versus Shravan Kumar Vishnoi & Ors. - TMI Issues:1. Whether the Adjudicating Authority's direction to the Resolution Professional was appropriate.2. Whether the Resolution Professional can withhold a resolution plan from the Committee of Creditors.3. The role and responsibilities of the Resolution Professional in the corporate insolvency resolution process.Analysis:Issue 1: Adjudicating Authority's DirectionThe Adjudicating Authority directed the Resolution Professional to place all Resolution Plans before the Committee of Creditors (CoC) along with his opinion on compliance with various provisions of law. The Appellant challenged this order, arguing that the plan submitted by Ms. Upma Jaiswal was not eligible under Section 29A of the Code. However, the Authority's direction was based on the principle that the Resolution Professional is a facilitator, not a gatekeeper, and the CoC should make the final decision. The Tribunal upheld the Authority's direction, emphasizing that the Resolution Professional's role is to provide opinions on compliance, leaving the decision to the CoC.Issue 2: Withholding of Resolution PlanThe Resolution Professional contended that they were unable to place Ms. Upma Jaiswal's plan before the CoC due to eligibility concerns. The Respondent argued that the Resolution Professional cannot unilaterally withhold a plan and must present all plans to the CoC for consideration. The Tribunal clarified that the Resolution Professional's duty is to ensure completeness and compliance of plans, providing opinions to the CoC for approval. The Resolution Professional's role is not to decide plan eligibility, but to facilitate the CoC's decision-making process.Issue 3: Role and Responsibilities of Resolution ProfessionalReferring to the Supreme Court judgment, the Tribunal highlighted that the Resolution Professional's duty is to confirm plan compliance with legal provisions and conduct due diligence. The Resolution Professional must present complete plans to the CoC, appending due diligence reports. The Tribunal emphasized that the Resolution Professional's duty is not to decide plan eligibility but to assist the CoC in making informed decisions. Any disputes regarding eligibility should be addressed post-CoC decision before the Adjudicating Authority.In conclusion, the Tribunal dismissed both Appeals, emphasizing the Resolution Professional's role as a facilitator in the insolvency resolution process. The Resolution Professional's responsibility is to provide opinions on plan compliance, leaving the final decision to the CoC. Any disputes on plan eligibility should be addressed post-CoC decision in accordance with the law.