Inherent powers to replace a Resolution Professional upheld when CoC could not be convened and insolvency was delayed.

Where the statutory mechanism under the Insolvency and Bankruptcy Code for replacing a Resolution Professional through the Committee of Creditors could not be activated because the CoC was not being convened, the Adjudicating Authority was treated as competent to use its inherent powers to prevent delay in the corporate insolvency process and remove the Resolution Professional. The Tribunal noted repeated failure to hold the first CoC meeting and continued delay despite requests to move a replacement resolution, and it upheld the substitution order on those peculiar facts. The appeal also lacked merit because all affected applicants were not impleaded.

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Issues: Whether the Adjudicating Authority could invoke its inherent jurisdiction under the NCLT Rules to remove and replace the Resolution Professional when the Committee of Creditors could not be convened, and the Resolution Professional had delayed the Corporate Insolvency Resolution Process.

Analysis: The appeal arose from an order removing the appellant as Resolution Professional and appointing a substitute. The statutory scheme under section 27 of the Insolvency and Bankruptcy Code contemplates replacement of a Resolution Professional by the Committee of Creditors, but the record showed extraordinary delay in conducting the first CoC meeting and repeated failure to convene a meeting despite requests for moving a resolution to replace the Resolution Professional. In such a situation, the Tribunal held that the Adjudicating Authority, as the appointing authority, could not remain a spectator and could exercise inherent powers to prevent further delay in the insolvency process. The Tribunal also noted that the appellant had not impleaded all applicants whose applications were allowed by the impugned order, which reinforced the lack of merit in the appeal.

Conclusion: The challenge to the removal of the Resolution Professional failed. The Adjudicating Authority was held competent to act in the peculiar facts, and the replacement order was upheld.

Ratio Decidendi: Where the statutory mechanism for replacement of a Resolution Professional through the Committee of Creditors cannot be set in motion because the Resolution Professional himself does not convene the CoC, the Adjudicating Authority may invoke inherent powers to secure the effective and timely conduct of the insolvency process and remove the Resolution Professional.

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