TaxTMI 
TaxTMI 
TaxTMI 
2025 (5) TMI 2002
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.... has appointed the Resolution Professional Mr. Balakrishna Venkatachalam (herein Respondent No.2), who has been recommended by Respondent No.1 (Financial Creditor). According to the Appellant, this appointment happens to be in contradiction to the provisions contained under the I &B Code, 2016. 3. In Company Appeal (AT) (CH) (Ins) No. 181/2025, Mr. Sudarshan Maiya V Karnataka Bank Ltd. & Another, the challenge has been given by the Appellant as against the impugned order of 28.01.2025 which has been passed by the Learned NCLT Bengaluru in C.P. (IB) No.05/BB/2025, wherein, almost an akin question has been raised pertaining to the appointment of the Resolution Professional, for carrying out the proceedings of CIRP under Section 95 of the I & B Code, 2016, who has been appointed on the recommendations made by the Respondent No.1, which the Appellant alleges to be, in contradiction to the provisions contained under the I&B Code, 2016. 4. In Company Appeal (AT) (CH) (Ins) No. 182/2025 Mrs. Sunanda Maiya V Karnataka Bank Ltd. & Another, the challenge given herein by the Appellant is as against the Impugned Order dated 28.01.2025 as it was passed in C.P.(IB) No.04/BB/2025, whereby the R....
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....s nominated by the Board under sub-section (4). (6) A resolution professional appointed by the Adjudicating Authority under sub-section (5) shall be provided a copy of the application for insolvency resolution process". 6. Primarily, on reading of the provisions contained under Section 97 of the I & B Code, 2016, on the face of it, if the same is taken into consideration, it contemplates that if an application is filed under Section 94 or 95 of the I & B Code, 2016, through a Resolution Professional (RP), the Learned Adjudicating Authority under Section 97(1) shall direct the IBBI Board, within 7 days from the date of filing of the application, to confirm that there is no disciplinary proceedings pending against the said RP and that the Board shall thereafter, within 7 days of the receipt of directions under Sub-section (1) of Section 97 of I&B Code, 2016, communicate to the Learned Adjudicating Authority confirming the appointment of RP or rejecting the same and nominating another RP for the said insolvency resolution process. Further, if the said application under Section 94 or 95 has been filed by the debtor or the creditor himself, as the case may be and not by a RP, Learned....
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....herein or the opposite party to the Company Petition as the case may be, get an opportunity or a cause to question, any irregularity, which has chanced in between the proceedings which are held under Section 95 to 100 of the I & B Code, 2016, since all the decisions, which are required to be taken prior to Section 100 are ministerial and procedural in nature. Hence, it cannot be said that the anomaly as raised by the Appellants would grant a cause of action to them to prefer an Appeal against the nomination of the Resolution Professional, because Section 97 of the I&B Code, 2016, would be only an enabling provision, and not substantive provision, which could give a right of challenge to the appellants under Section 61 of the I&B Code, 2016. 9. The Appellant contends that, any anomaly in the appointment of the Resolution Professional under Section 97 of the I & B Code, 2016, itself could be an appropriate stage to raise an objection and the Appellants, in the status of being the Personal Guarantor can question the process of appointment of the Resolution Professional, for the purposes of nipping the problems at its bud. But that may not be an argument, which could be accepted by th....
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....o judicial determination takes place until the adjudicating authority decides under Section 100 whether to accept or reject the application. The report of the resolution professional is only recommendatory in nature and 86.7. The adjudicatory authority must observe the principles of natural justice when it exercises jurisdiction under Section 100 for the purpose of determining whether to accept or reject the application; 86.8. The purpose of the interim moratorium under Section 96 is to protect the debtor from further legal proceedings; and 86.9. The provisions of Section 95 to Section 100 IBC are not unconstitutional as they do not violate Article 14 and Article 21 of the Constitution." 10. In para 86.2 in particular, the Hon'ble Apex Court has observed that appointment of the Resolution Professional under Section 97 of the I & B Code, 2016, is only intended to facilitate for the purposes of collating the facts and materials which has to assimilated for examination of the Application preferred under Section 95 of the I & B Code, 2016, in order to justify the initiation of the IRP proceedings under Section 95, as against the Personal Guarantor. The stages under Section 95 an....