TaxTMI 
TaxTMI 
2023 (1) TMI 393
X X X X Extracts X X X X
X X X X Extracts X X X X
....er dated 28.11.2022 passed by the Learned Adjudicating Authority, National Company Law Tribunal, Mumbai Bench, Mumbai (hereinafter referred to as 'Adjudicating Authority') in I.A. No.2621/2021 in CP(IB) No.494/MB/2019. By the said order dated 28.11.2022 the Adjudicating Authority, on three Interlocutory Applications filed which include IA No.2621/2021, directed the appellant who was Resolution Professional (hereinafter referred to as 'RP') of a Corporate Debtor namely Shree Ram Urban Infrastructure Ltd to be removed and was directed to hand over all records/documents to the newly appointed RP. On the same day i.e. 28.11.2022 one Mr. Sapan Mohan Garg was appointed as RP in place of appellant. 2. The impugned order was passed on 28.11.2022 and immediately on the next day i.e. 29.11.2022 the present appeal under Section 61 of the IBC was presented before this Tribunal. On the same day a scrutiny was done by the Registry and defects were intimated to the appellant's counsel and on the same day it was returned. Subsequently on 30.11.2022 the present appeal was presented for its filing and on the same date i.e. on 30.11.2022 it was mentioned before the Tribunal for its listing even wi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fter referred to as CoC) Meeting was held on 19.04.2021 i.e. after about one year and six months from the date of initiation of CIRP. Thereafter second CoC Meeting was held almost after two months from the date of first CoC Meeting for the purposes of raising interim finance to the tune of Rs.32 crores for functioning of the CD. It is reflected from the impugned order that the appellant did not try to raise finance. It further appears that during moratorium period even without consultation with the Members of the CoC the appellant as RP filed an IA seeking to execute conveyance of deed on behalf of the CD. It also appears that as CIRP cast the appellant had received Rs.17 lakhs for the period between 06.11.2019 and 05.04.2021. Before the Adjudicating Authority a stand was taken by the applicant of IA No.2621/2021 who is respondent herein namely SREI Equipment Finance Ltd the appellant vide email dated 29.09.2021 requested to fix date for Meeting since 4th Meeting of CoC was cancelled. Again the applicant namely SREI Equipment Finance Ltd, respondent herein vide email dated 03.10.2021 requested the appellant/RP to conduct the CoC Meeting under the agenda for replacement of RP. Ho....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt/RP refused to comply with the direction of the Adjudicating Authority. It is further reflected from the impugned order itself that the applicant India Bull has taken a stand that an extraordinary situation has occurred wherein even through a vast majority of financial creditors (entitled to be Members of CoC) desire to replace the appellant as RP, however, absence of reconstitution COC was making it impossible to pass requisite resolution. Accordingly the applicant Indiabull Housing had filed application for replacement of RP/appellant under Rule 11 of NCLT Rules read with Section 27 of the IBC. 8. The Adjudicating Authority in the impugned order has dealt with all the three petitions i.e. IA No.2621/2021, 1304/2022 and 3537/2022 in deciding the matter for replacement of the appellant/RP and directed for his replacement with one Mr. Mr. Sapan Mohan Garg. However, the appellant has preferred the present appeal only in respect of IA NO.2621/2021 which was filed by SREI Equipment Finance Ltd ignoring to implead those persons as respondents. It creates a situation to draw an adverse inference against the appellant. 9. Mr. U.K. Chaudhury, learned senior counsel appearing on beh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ofessional'. In fact, Section 27 speaks of 'Replacement' of 'Resolution Professional' by the 'Committee of Creditors'. 25. In reality, Section 60(5) deals with 'Question of Priority' or 'Question of fact' relating to the I&B Code. When there is an express Provision namely Section 27 of the Code, which unerringly deals with 'Replacement of Resolution Professional by the Committee of Creditors', then, the same is to be followed/adhered to by the 'Litigant'/'Stakeholders' and others connected with the I&B Code. In this regard, this 'Tribunal' is not accepting the submission made on behalf of the 'Appellant'/'Applicant' that the 'Appellant'/'Applicant' is entitled to file an 'Application under Section 27 read with 60(b) of the Code, because of the fact that Section 27 of Code does not speak of 'any person' other than the 'Replacement' of 'Resolution Professional' by the 'Committee of Creditors'. Suffice, it for this 'Tribunal' to point out that the ingredients of Section 27(1) of the Code are 'self-explanatory' and admits of no exception. 26. Section 27 of the I&B Code deals with complaints against 'Insolvency Professional Agency' or its 'Member' or 'Information Utili....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... replacement of RC can be done by the CoC but in a situation which arose in the present case the Learned Adjudicating Authority has rightly exercised its inherent jurisdiction and passed the impugned order which requires no interference. 12. Besides hearing the learned counsel for the parties we have examined the material available on record particularly the impugned order. It is reflected from the impugned order that the CIRP was initiated long back in 2019, however, for more than one and half years, no step was taken by the Appellant/RP for revival of the CD or even for generating funds. There is no order of any 'Stay' regarding the convening of the said 'Meeting' placed before us. The CoC Meeting was delayed for such a long time. This conduct is sufficient to draw an adverse inference against the appellant as it has been noticed that though the applicant/respondent No.1 had intimated the RP for convening Meeting for removal of the RP, the appellant did not respond to the request of the applicant nor did he convene any 'Meeting', compelling the applicant to approach the Adjudicating Authority for passing order for replacing of the RP. It is true that Section 27 empowers CoC fo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ution Process ("CIRP") of Shree Ram Urban infrastructure Limited ("Corporate Debtor"). 2. Further, you have failed to adhere to the timelines as stipulated under the IBC The CIRP against the Corporate Debtor was initiated on 6th November 2019, thereafter you convened the 1st meeting of the Committee of Creditors ("CoC) on 19th April 2021 e, after 1 year and 6 months after initiation of CIRP. 3. Thereafter, you have taken charge as interim Resolution Professional of Corporate Debtor. We have to state that as per Section 21 read with Regulation 17 of the Code, CoC has to be constituted within 30 days from the date of initiation of CIRP by the RP and subsequent thereto RP to call for meeting of 1st CoC within 7 days. However, in complete disregard to the statutory provision you have constituted the CoC only on 7th October 2020 and you convened the 1st meeting of the CoC on 19th April 2021 Le, after a delay of 1 year and 6 months from the date of initiation of CIRP. The application for appointing Alt was filed sometime in January 2021. 4. Further on our repeated requests to hold the 1st CoC meeting, you have by emails stated that you are unable convene CoC du....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ver you have conveniently failed to serve a copy of the same upon us, who you have made a Respondent in the IA. Your entire conduct during the CIRP of the Corporate Debtor has been of some ignorance and high handedness. c. We further say that during the 2nd Meeting of the CoC held on 11th June 2021, the members of CoC had resolved to raise Interim finance to the tune of Rs. 32 Crores. However, till date you have failed to raise the said interim finance and you have till date kept the CoC in dark. d. You have further alleged that SHEI Equipment Finance Limited has made Indiabulls Housing Finance as a party Respondent in the Interlocutory Application No. 2205 of 2021 filed by us. We say that it was you who had admitted India Bulls Finance Limited as the Financial Creditor of the Corporate Debtor and thereafter removed them without intimating the COC. In fact, we were not even aware that you had removed Indiabulls from the CoC. Had you intimated us or made us a party to your application before the NCLT, we would have no reason or occasion to make indiabulls a party to our application, e. Further we as members of CoC are unaware as to who is looking after the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tantiation, there are several communications with you and the erstwhile promoter to demonstrate the same. You have further filed an affidavit consenting to sale of property of Corporate Debtor to a third party in the guise of receiving money for the benefit of the Corporate Debtor is an abhorrent assumption on your account 7. Further, we requested you to convene the Meeting of the CoC urgently to discuss the issues pertaining to Kalpataru, India Buls and other issues before the hearing of the Application of the Kalpatans on 20th September 2021. However, you failed to call for the meeting before the hearing of Kalpataru, therebycausing great prejudice to the members of the Coc. 8. After the 4th Meeting of CoC was concluded by you on 29th September 2021, you for the first-time shared copy of the supplementary affidavit filed by you in Application for CIRP Costs. Further, during the meeting of the CoC you have placed blame on members of CoC and specifically SREI for inactions. However, it is in fact your inactions for almost 2 years that has led to this situation. Further you abruptly without providing opportunity to the CoC members to present their views and concern....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t monies by mentioning that SREI is not making payments in spite of the ratification of CIRP costs by CoC which casts responsibility on other CoC members to contribute but you failed to mention other Financial Creditors on this matter. Further, CoC has already consented on the raising of inter in finance but it was your inability to do so. You have also cited that order dated 31st May 2021. NCLT order which bars him to do anything except for calling the CoC meeting. It was the dereliction of RP's duty that he did not file IA on time so as to get the favorable order and is now placing blame on SREL for this unfortunate situation. 12. Secondly, you have alleged that SREI Equipment Finance Limited is a defaulter during the CoC and in the said email and has also suggested that it has defaulted in making payments towards the CIRP Expenses. Kindly note that we have already paid an amount of Rs. 17,50,000 towards the CIRP costs of the Corporate Debtor. Further, we would like to date here that such unprofessional, unethical conduct on your part has led the CIRP of Corporate Debtor to this situation. It is apparent from your conduct that you are hand in glove with the promoters....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ancies. Till date we have not been introduced to your team of professionals. You have unilaterally decided what is best for the Corporate Debtor, Financial Creditors and Home Buyers without first approaching us for our view. Further on hare perusal of the minutes of the meetings of the CoC, it is clearly evident that the gross incompetence on your part as being placed on SRES specifically. Further we have never objected to engaging Senior Advocates, however, you have taken contrary stands on moratorium before the Hon'ble NCLT, which speaks volumes of your gross negligence, high handedness and complete failure on your part. 16. In view thereof, we request your good self to correct the minutes of the meeting as envisaged under the small under reply We further request you to put our objections to the minutes of the meeting on record. We further request you to call for a meeting of the CoC forthwith with an agenda to replace the current Resolution Professional with another Resolution Professional We will share the scan copy of the above letter tomorrow. Sumit Sharma Vice President Srel Equipment Finance Limited 3831647360 (Emphasis Suppl....