Appeal Dismissed: CoC Decision to Replace Resolution Professional Upheld Under I&B Code Section 27

The Appellate Tribunal dismissed the appeal against the replacement of the Resolution Professional, ruling that the CoC's decision to replace the Appellant was valid under Section 27 of the I&B Code. The Tribunal held that the Resolution Professional was not entitled to a hearing before the CoC's decision to replace them. Previous judgments were cited to support the decision, emphasizing that natural justice principles do not automatically apply in such cases. The appeal lacked merit and was therefore dismissed.

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Issues:
Replacement of Resolution Professional without opportunity of hearing.

Analysis:
The appeal was filed against the order passed by the Adjudicating Authority replacing the Appellant with a new Resolution Professional, based on an application by the Financial Creditor. The main issue raised was the lack of opportunity for the Appellant to be heard before the replacement. The Resolution Professional argued that natural justice principles should have been followed, as per Section 27 of the I&B Code, which allows for the replacement of a Resolution Professional by the Committee of Creditors (CoC).

The Respondent contended that Section 27 does not require an opportunity for the Resolution Professional to be heard before the replacement decision is made by the CoC. They argued that the replacement process is completed when the CoC passes a resolution with a 66% majority and communicates the new Resolution Professional's name to the Adjudicating Authority for approval.

The Appellate Tribunal analyzed Section 27 of the I&B Code, which outlines the procedure for replacing a Resolution Professional. It was noted that the CoC can decide to replace the Resolution Professional with a new one by a 66% majority vote. In this case, the CoC had unanimously decided to replace the Appellant. The Tribunal emphasized that the scheme of Section 27 does not mandate an opportunity for the Resolution Professional to be heard before the replacement decision is finalized.

The Tribunal referred to previous judgments to support its decision. It cited cases where it was held that the CoC's decision to replace a Resolution Professional with a majority vote is final and does not require reasons to be recorded. The Tribunal also highlighted that the principles of natural justice are not automatically applicable in the context of Section 27, as the statute itself does not provide for a hearing for the Resolution Professional before replacement.

In conclusion, the Tribunal dismissed the appeal, stating that the Adjudicating Authority's decision to allow the replacement of the Resolution Professional was in line with the provisions of Section 27 of the I&B Code. The Tribunal held that the Resolution Professional was not entitled to a hearing before the replacement decision by the CoC. The appeal was found to lack merit and was consequently dismissed.

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