TaxTMI 
TaxTMI 
2023 (12) TMI 255
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....inancial Creditor for replacement of the Appellant by new Resolution Professional namely- Mr. Prawincharan Prafulcharan Dwary on the basis of the Resolution dated 06.10.2023 passed by the CoC for replacement of the Appellant. 2. Brief facts of the case necessary to be noticed for deciding these Appeals are:- 2.1. CIRP against the Corporate Debtor- 'Parenteral Drugs India Ltd.' was initiated by order dated 09.02.2023. The Adjudicating Authority appointed the Appellant as IRP. After the order dated 09.02.2023, publication in the newspaper was made by the IRP on 13.02.2023. Appellant thereafter sent intimation to the Financial Creditors- State Bank of India, Punjab National Bank and IBBI. IRP received claims from SBI and PNB on 24.02.2023 and 28.02.2023 respectively. CoC was constituted by the IRP on 03.03.2023. Notice and agenda for convening first CoC meeting was issued on 03.03.2023. IRP even without any meeting of the CoC visited the plants of the Corporate Debtor on 12.02.2023 and entered into MoU dated 13.02.2023 with a new investor. On 16.02.2023, IRP visited another plant situated at Baddi in Himachal Pradesh. An IA No.1874 of 2023 was filed by the State Bank of India se....
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....ed for further consideration. On 27.09.2023, Adjudicating Authority passed following order on IA No.1874 of 2023 & IA No.2860 of 2023:- "ORDER Adv. Amir Arsiwala appeared for the Resolution Professional. Mr. Kairav Trived, Resolution Professional present. Adv. Rohan Agarwal a/w Adv. Shriraj Khambete i/b Saraf & Partners appeared for the SBI, PNB and CoC. IA No. 4081/2023- The present IA is filed for urgent hearing. Since, matter has already been fixed for hearing, the present IA No. 4081/2023 becomes infructuous. IA 1874/2023 IA 2461/2023 IA 2860/2023 IA 2591/2023 IA 2591/2023 CONT.A 7/2023 in C.P. (IB)/690(MB)2020 This Bench directs CoC of Corporate Debtor to hold meeting within one week and CoC shall consider the following items- a) Replacement of the Resolution Professional and if such Resolution is proposed, then name the proposed IRP. b) The fees and costs claimed by the incumbent RP. Personal presence of the bank was sought however, they are not present and they are represented by the Counsel. List this matter along with all IAs' on 26.10.2023 for hearing/further co....
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....nsel for the Respondents refuting the submissions of the Appellant submits that the Appellant has been removed by the resolution passed by the CoC with 100% vote which is in accordance with the provisions of IBC. It is submitted that the Appellant has no right to challenge the order of the Adjudicating Authority dated 17.10.2023 which order gives effect to the resolution dated 06.10.2023 of the CoC. It is submitted that the Appellant was only an IRP and had no right to challenge the resolution of the CoC passed on 06.10.2023. The Appeal filed by the Appellant is not maintainable nor Appellant has any cause of action to challenge the impugned order. It is submitted that the first meeting of the CoC was conducted on 13.03.2023 which was not concluded by the Appellant despite several requests by the CoC. Appellant has not completed the first CoC meeting and SBI filed IA No.1874 of 2023 and IA No.2860 of 2023 seeking direction against the Appellant for holding the meeting of the CoC with specific agenda for replacement of IRP. It is submitted that the Appellant did not convene the meeting of the CoC. It is submitted that the Appellant filed an Appeal against the order dated 12.05.2023 ....
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....as the resolution professional of Parenteral Drugs India Limited under Section 22 of the Insolvency and Bankruptcy Code, 2016, on the minimum fees as specified by the IBBI and as Der Section 34B of the Insolvency and Bankruptcy Code, 2016", OR "Resolved to replace the current resolution professional Mr. Kairav Anil Trivedi, with Mr. Prawincharan Prafulcharan Dwary (Reg No.:IBBI/IPA-002/IP-N00331/2017-18/10937) as the resolution professional of Parenteral Drugs India Limited under Section 27 of the Insolvency and Bankruptcy Code, 2016, on the minimum fees as specified by the IBBI and as per Section 34B of the Insolvency and Bankruptcy Code, 2016" 9. Learned Counsel has also brought on record the result of e-voting at Page 91 of the Appeal which indicate that Resolution was assented by 100% vote of the CoC and there was no dissenting vote. In view of the resolution of the CoC passed on 06.10.2023, Appellant lost its right to continue as IRP/RP. The Appellant challenging the order contends that the CoC is not clear as to whether Resolution is passed under Section 22 or Section 27. Sections 22 and 27 which are relevant for the present case are as follows:- "22. App....
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....l under sub-section (3), the resolution professional appointed under section 22 shall continue till the appointment of another resolution professional under this section." 10. From the facts which have been brought on the record, it is clear that the appointment of the Appellant as IRP was never confirmed by the CoC nor any material has been brought on record to indicate that the appointment of IRP was confirmed by the CoC by majority of not less than 66% of the vote. When Appellant's appointment as IRP has not been confirmed, the Appellant could have been replaced by the CoC under Section 22. The mere fact that in the Resolution which was placed before e-voting as extracted above, there was alternate resolution both under Sections 22 and 27 cannot be read to mean that there is any infirmity in the resolution passed for replacement with 100% vote. The submission of the Appellant that Appellant has not been heard before passing of the order and there is violation of principle of natural justice also cannot be accepted. When we look into paragraph 1 of the order, the Adjudicating Authority itself recorded that both the counsel for the Appellant and the IRP were present. The argume....
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....n by the Adjudicating Authority before approving the proposal of new Resolution Professional. Section 27 requires the CoC to forward the name of proposed Resolution Professional to the Adjudicating Authority and the Adjudicating Authority is required to forward the name of the proposed Resolution Professional to the Board for its confirmation. The scheme of Section 27 does not indicate that Resolution Profession is to be made party and is to be issued notice before taking decision to appoint another Resolution Professional. Looking to the purpose and object of the I&B Code, where timeline is the essential factor to be taken into consideration at all stages, there is no warrant to permit a Lis to be raised by the Resolution Professional challenging his replacement by the CoC. The decision taken by the CoC is a decision by vote of 66% and when the decision is by votes of a collective body, the decision is not easily assailable and replacement is complete as per Scheme of Section 27 when the resolution is passed with requisite 66% voting share." 12. The above judgment fully supports the submissions of the Counsel for the Respondents. When the Resolution has been passed by the CoC i....
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.... As noted in the facts of the present case, the application IA No. 1874 of 2023 was filed on 02.05.2023 on which orders were passed on 12.05.2023 and 27.09.2023 directing the IRP to convene the meeting of the CoC with agenda of replacement. The meeting of the CoC was held on 06.10.2023 and the assignment as claimed by the Appellant was only on 12.10.2023 which thus have no effect on the proceedings undertaken under the order of the Adjudicating Authority and the meeting convened on 06.10.2023. 15. Learned Counsel for the Appellant has also placed reliance on the judgment of the Hon'ble Supreme Court in "Economic Transport Organization, Delhi vs. Charan Spinion Mills Private Limited and Anr.-(2010) 4 SCC 114" where following has been laid down in paragraphs 23 and 35:- "23. An assignment' on the other hand, refers to a transfer of a right by an instrument for consideration. When there is an absolute assignment, the assignor is left with no title or interest in the property or right, which is the subject matter of the assignment... 35. The principles relation to subrogation can therefore be summarized thus: ................... (iii) Where th....