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TaxTMI 
TaxTMI 
2024 (11) TMI 481
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....hi Mehta and Mr. Abhishek Sinha, Advocates for R-1 JUDGMENT ASHOK BHUSHAN, J. This Appeal has been filed by Personal Guarantor of the Corporate Debtor challenging order dated 10.09.2024 passed by National Company Law Tribunal, New Delhi, Court-III in IA No.1904 of 2024 in IB - 775(ND)/2022. The Adjudicating Authority while passing order on application under Section 98 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the "IBC") has partly allowed application - IA No.1904 of 2024 filed by the Financial Creditor for replacement of Resolution Professional ("RP") - Mr. Prabhat Ranjan Singh. Prayer (B) made in the application was rejected. The Appellant aggrieved by the said order has come up in this Appeal. 2. ....
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.... counsel of Usha India Ltd. and Petitioner in the execution petition bearing Ex. P. 32/2014 titled as Technology Development Board Vs. Mis Usha India Ltd. & Anr. before the Hon'ble High Court of Delhi. The Copy of the Order passed by the Hon'ble High Court of Delhi wherein Mr. Prabhat Ranjan Singh appeared as a counsel of Usha India Ltd in which the Petitioner is the director is attached herewith as ANNEXURE- R/3. 7. It is further respectfully submitted that Mr. Prabhat Ranjan Singh as Counsel of Usha India Ltd. also wrote a letter dated 20.12.2017 to the Retd. Justice Y.K. Singhal, Sole Arbitrator, New Delhi wherein Mr. Prabhat Ranjan Singh informed the Ld. Arbitrator that the Technology Development Board (Financial Credit....
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....e that RP is not an independent or a biased. The RP, who was proposed by the Appellant and appointed by the NCLT is fully eligible in terms of Regulation 4 of IBBI (Insolvency Resolution Process for Personal Guarantors of Corporate Debtors) Regulations, 2019. The RP is not an associate of the guarantor, nor related party. Hence, no eligibility is attached to Respondent No.2. It is submitted that RP has only extended legal services to the Personal Guarantor and there is no material to indicate that RP has given advice, direction or instruction to Personal Guarantor, who is accustomed to act accordingly. 5. Learned Counsel for the Respondent No.1 refuting the submissions of the Appellant submits that the RP, has been representing the Corpo....
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....der dated 25.01.2017. Thus, if the Resolution Professional was having some professional engagement earlier, the same can be the reason of the RP being biased and having influence of the Personal Guarantor in the Personal Insolvency Resolution Process. Hence, in our considered view it can be a valid and reasonable ground to change or to replace the RP in the present matter." 6. The order impugned has been passed by the Adjudicating Authority under Section 98 of the IBC. Section 98 entitles both, debtor and creditor to apply to the Adjudicating Authority for replacement of RP appointed under Section 97. Section 98 of the IBC is as follows: "98. Replacement of resolution professional. - (1) Where the debtor or the creditor is of th....
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....tment of the nominated resolution professional and recommend a new resolution professional. (7) On the basis of the communication of the Board under sub-section (3) or subsection (6), the Adjudicating Authority shall pass an order appointing a new resolution professional. (8) The Adjudicating Authority may give directions to the resolution professional replaced under sub-section (7) - (a) to share all information with the new resolution professional in respect of the insolvency resolution process; and (b) to co-operate with the new resolution professional in such matters as may be required" 7. Application - IA No.1904 of 2024 was filed by the Financial Creditor under Section 98 for replacement of the R....
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.... by debtor or creditor seeking replacement of the RP. The submission of the learned Counsel for the Appellant that Section 94 gives a vested right to the debtor to initiate insolvency resolution process either personally or through RP, hence, the said vested right cannot be taken away. Section 94, sub-section (1) of the IBC is as follows: "94. Application by debtor to initiate insolvency resolution process. - (1) A debtor who commits a default may apply, either personally or through a resolution professional, to the Adjudicating Authority for initiating the insolvency resolution process, by submitting an application." 9. Section 94, sub-section (1) is a provision, which permits a debtor to initiate insolvency resolution process.....