Resolution professional replacement must follow statutory Committee of Creditors procedure; bypassing Section 27 and fairness requirements invalidates the order.

Replacement of a resolution professional under the Insolvency and Bankruptcy Code must follow the statutory mechanism in Section 27, including placement of the proposal before the Committee of Creditors and decision by the requisite voting share; an order bypassing that process could not be sustained. An application under Section 60(5) was treated as maintainable on the facts to raise the grievance, but the resulting order still had to comply with the Code's procedural scheme and principles of procedural fairness. Because the Committee of Creditors was not first moved and the resolution professional was not heard through the prescribed route, the replacement direction was set aside in its present form and the matter remitted for consideration through the statutory process.

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Issues: (i) Whether an order replacing a resolution professional could be sustained when the statutory procedure under Section 27 of the Insolvency and Bankruptcy Code, 2016 was not first placed before and considered by the Committee of Creditors. (ii) Whether the application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 was maintainable to seek such replacement and whether the impugned order could stand in the absence of prior hearing and procedural compliance.

Issue (i): Whether an order replacing a resolution professional could be sustained when the statutory procedure under Section 27 of the Insolvency and Bankruptcy Code, 2016 was not first placed before and considered by the Committee of Creditors.

Analysis: Replacement of a resolution professional appointed under Section 22 is governed by Section 27, which contemplates a decision of the Committee of Creditors by the requisite voting share and forwarding of the proposed name through the prescribed statutory route. The omission to place the replacement proposal before the Committee of Creditors amounted to a procedural defect. The Tribunal could have directed that the agenda be formulated and placed before the Committee of Creditors, but the replacement could not validly be ordered without adherence to the statutory mechanism.

Conclusion: The replacement order, insofar as it bypassed the Section 27 procedure, could not be sustained.

Issue (ii): Whether the application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 was maintainable to seek such replacement and whether the impugned order could stand in the absence of prior hearing and procedural compliance.

Analysis: A party aggrieved by inaction or obstruction in the corporate insolvency resolution process is not rendered remedy-less merely because the Code does not expressly provide a forum for the grievance in that situation. An application under Section 60(5) was treated as maintainable in the peculiar facts, but the exercise had to respect the statutory scheme and the civil consequences flowing from replacement of the resolution professional. Since the resolution professional was not heard through the statutory process and the Committee of Creditors was not first moved on the issue, the impugned order suffered from procedural infirmity.

Conclusion: The application was maintainable, but the impugned order could not stand as passed and required the matter to be placed before the Committee of Creditors in the manner directed.

Final Conclusion: The impugned replacement direction was set aside in its present form, and the matter was sent back for consideration through the statutory process before the Committee of Creditors, with consequential partial relief to the appellant.

Ratio Decidendi: Replacement of a resolution professional must be processed in accordance with the statutory mechanism under Section 27, and any order having civil consequences cannot bypass the Committee of Creditors procedure or deny procedural fairness.

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