2017 (10) TMI 1065

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....other orders as this Hon'ble Tribunal may deem fit and proper in the facts and circumstances of the case." 2. Background of the case is that the Corporate Debtor viz. M/s. Raj Oil Mills has submitted a Petition on 23.06.2017 seeking invocation of the provisions of section 10 of the I&B Code to declare itself insolvent. An order was pronounced on 10.07.2017 vide TCP No.1132/I&BP/NCLT/MB/MAH/2017 wherein the Petition was admitted and by appointing an IRP viz. Mr. U.V.G. Nayak, it was ordered to commence the Corporate Insolvency Resolution Process. Consequence thereupon the IRP called a meeting of Committee of Creditors on 09.08.2017. A commencement report was placed on record. Thereafter, an Application (MA No.355/2017) was moved by the IRP seeking direction to remove the dead-lock arose due to unclear verdict of the Committee of Creditors in favour of one of the Insolvency Professional. On due consideration of the facts and the percentage of voting for and against the said agenda, this Bench has decided the said M.A. (355/2017) vide order dated 24.08.2017 in following manner :- "6. Heard the submissions of the Learned Representatives present on behalf of the IRP and ....

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....costs 3 To replace the existing IRP and appoint Mr. Rajendra M. Ganatra, CFA/Insolvency Professional, as the Resolution Professional and to fix the remuneration and expenses which shall constitute Corporate Insolvency Resolution Process costs 4 To fix a limit up to which the Resolution Professional, without the permission of the Committee of Creditors, is entitled to initiate a debit transaction with the financial institution/banks maintaining accounts of the Corporate Debtor 5 To take note and approve further expenses/costs incurred on or by the IRP from 9.8.2017 to date, i.e. 7.9.2017." 4. The Result of the voting has also been informed in this "compliance report". Presently we are not concerned about rest of the agenda but confine ourselves to the main issue of appointment of RP/Insolvency Professional which is raked up in this Miscellaneous Application, now under consideration. It is informed that the continuation and appointment of Mr. U.V.G. Nayak was voted in favour by 31.70 share of voting, however, the appointment of Mr. Rajendra M. Ganatra was voted in favour by 61.84 of the voting share. It is clarified that the Financial Creditor M/s. Edelweiss ARC ....

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....e committee may decide by a majority of 75% of voting share of the Financial Creditors to appoint the IRP as the Resolution Professional or propose the name of another insolvency professional to be appointed as the Resolution Professional. In this explanatory Clause it is said :- "Clause 22 provides that one of the main functions of the committee of creditors is that appointment of the resolution professional. Clause 22 provides that at the first meeting of the committee of creditors, the committee may decide, by a majority of 75 per cent of voting share of the financial creditors to appoint the interim resolution professional as the resolution professional or propose the name of another insolvency professional to be appointed as the resolution professional. Where the committee of Creditors decides to not appoint the interim resolution professional as the resolution professional, it has to file an application with the adjudicating authority for the appointment of the proposed resolution professional. The adjudicating authority shall, upon receipt of a confirmation from the Insolvency and Bankruptcy Board of India, appoint the proposed insolvency resolution professional as ....

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....n an interesting situation had arisen, which might have not been apprehended while formulating the clause of 75 per cent of voting share of the Financial Creditor under section 22(1) of The Code. The situation is that on two occasions when the Meetings of the Committee of Creditors were held with the Agenda to approve the continuance of the existing IRP or to replace by appointing a new Insolvency Professional, the largest Financial Creditor among the list of the Financial Creditors were two in number viz. Edelweiss ARC and IFCI Factors having 53.52 per cent and 8.32 per cent i.e. in total 61.84 per cent. Admittedly, the total of the percentage of the two largest Creditors had not reached to the threshold limit of 75 per cent. To resolve this stalemate, this Application is before us and to decide the same we have examined the objects and reasons of introduction of this new Code, (reproduced above) and noticed that the Committee has approved that the Committee of Creditors are likely to be most incentivised to select the person who is best suited for the task. It has also been observed in the said Report of the Committee that the Financial Creditor often choose a person who is famil....