Former director loses appeal against bank after resolution plan approval under Clean Slate Principle

The HC dismissed a Letters Patent Appeal filed by a former director seeking RBI action against HSBC Bank during CIRP proceedings. Following NCLT approval of the resolution plan, the appellant ceased to be a shareholder and board member due to the Clean Slate Principle under IBC. The court held the appellant lacked locus standi to continue the appeal as he was no longer a director, had not obtained NCLT leave to pursue the appeal, and the company's new management should address such grievances. The appeal was dismissed for lack of merit.

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Issues involved:
The judgment involves issues related to the locus standi of the appellant in seeking a mandamus directing the RBI to take action, the implications of the approval of the Resolution Plan by the NCLT, and the appellant's right to approach the court in light of the IBC provisions.

Background facts:
The appellant filed a Writ petition seeking reliefs against certain entities and had impleaded the RBI as a respondent. The RBI had promised action on a complaint, but the Writ petition was withdrawn later. The appellant then filed another petition seeking direction for the RBI to comply with the previous statement.

Subsequent events and legal proceedings:
The 2nd respondent initiated insolvency proceedings against the 4th respondent, leading to appeals and challenges up to the Supreme Court. The Resolution Plan was approved by the NCLT, resulting in the appellant ceasing to be a shareholder and director of the 4th respondent.

Order of the Single Judge:
The Single Judge held that the appellant lacked locus standi to seek a mandamus against the RBI and that the 4th respondent should have filed the subsequent petition. The RBI could not act due to pending matters before the NCLT and DRT.

Letters Patent Appeal:
The appellant challenged the Single Judge's order citing provisions of the IBC and a Supreme Court judgment. The Court found the appellant's contentions untenable, stating that he should approach the NCLT, not the High Court. The Resolution Plan approval by the NCLT rendered the appellant's appeal moot.

Court's Consideration:
The Court held that the Resolution Plan approval and change in management of the 4th respondent made the appellant's appeal baseless. The new management expressed disinterest in pursuing the litigation on behalf of the 4th respondent. The Court agreed with the Single Judge's reasons for denying relief to the appellant.

In conclusion, the Court dismissed the appeal, emphasizing that the appellant lacked standing to continue the appeal in light of the NCLT's approval of the Resolution Plan and the change in management of the 4th respondent. The new management's disinterest in the litigation further supported the dismissal of the appeal.

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