Liquidator replacement under the Insolvency Code upheld where it serves creditor interests and ensures effective liquidation.

A resolution professional has no vested right to continue as liquidator under the Insolvency and Bankruptcy Code, 2016, and the adjudicating authority may exercise judicial discretion to appoint another insolvency professional if replacement is in the creditors' interests and supports an effective liquidation process. The absence of a pari materia replacement mechanism in liquidation, unlike CIRP, does not bar such action, and a finding of misconduct is not essential where the decision is not based on section 34(4) grounds. The replacement was therefore legally sustainable, and the challenge failed.

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Issues: Whether the existing resolution professional could be replaced as liquidator and another insolvency professional appointed, and whether the impugned order approving such replacement was liable to be interfered with.

Analysis: The statutory scheme under the Insolvency and Bankruptcy Code, 2016 recognizes appointment of the resolution professional as liquidator on consent, but does not confer a vested or fundamental right to continue as liquidator throughout liquidation. The Code contains no pari materia provision in liquidation equivalent to the replacement mechanism available under section 27 during CIRP. The adjudicating authority may, in the exercise of judicial discretion, consider whether replacement would serve the interests of the creditors and facilitate a smooth liquidation process. The absence of an express finding of misconduct is not fatal where the replacement is not founded on the grounds stated in section 34(4), and procedural resort to a memo does not invalidate the order when no legal bar is shown and principles of natural justice are observed.

Conclusion: The replacement of the existing resolution professional as liquidator was legally sustainable, and the challenge to the impugned order failed.

Ratio Decidendi: A resolution professional has no vested right to continue as liquidator, and the adjudicating authority may replace the liquidator in the interests of an effective liquidation process even where the replacement is not grounded strictly in section 34(4), provided the decision is taken judicially and consistently with natural justice.

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