TaxTMI 
TaxTMI 
2025 (8) TMI 1409
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....titioner is an Insolvency Professional and is aggrieved by an order passed by the National Company Law Tribunal ('NCLT' / 'Tribunal') / R1 on 04.06.2025 as under that order, the NCLT has proceeded to appoint one Mr.Thangamuthu Viswanathan as the Interim Resolution Professional (IRP) of R2 instead of the petitioner. 2. Mr.Varun Srinivasan, who appears for the petitioner states that the petitioner was enrolled as a member of the Insolvency Professional Agency of Institute of Cost Accountants of India ('Agency'). He is also registered as a Resolution Professional (RP) with the Insolvency and Bankruptcy Board of India ('IBBI' / 'Board') / R3 and has a valid Authorization for Assignment (AFA) issued by the Agency valid till 30.06.2026. 3. ....
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....nder Sections 7 and 10 of the Code, there is no provision that enables the NCLT to deviate from such recommendation. The legal issue that arises is thus whether the NCLT is vested with the requisite discretion to override the recommendation of the applicant under Section 7 and 9 in appointing an RP of its choice. 8. We had requested Ms.Indumathi Ravi, who accepted notice for the NCLT, to obtain instructions in regard to the legal issue as framed above. 9. After hearing the parties, an order had come to be passed on 07.07.2025 expressing our prima facie view in the following terms:- "The petitioner relies on Sections 10(3)(b) and 16(2) of the Insolvency and Bankruptcy Code, 2016 (in short 'Code') reading thus: ....
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........ 2. A combined reading of Sections 10(3)(b) and 16(2) of the Code indicate that in case of applications filed by Financial Creditor (FC) or Corporate Debtor (CD) seeking ownership, it is incumbent on the National Company Law Tribunal (in short 'Tribunal') to appoint an Interim Resolution Professional (IRP) as suggested by the FC or CD as the case may be. 3. To be noted that even Section 16(3) which grants some leeway for the Tribunal to appoint RP as per its discretion, would stand triggered only in the event that the Operational Creditor (OC) does not give a proposal for appointment of a specific IRP. Therefore, it appears prima facie that in all the three cases (FC, OC and CD), suggestions for appointment of IRP by t....
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....g the recommendation of the Petitioner as IRP is that R2 had changed the recommendation of the IRP multiple times. Hence the NCLT thought it fit to itself appoint an IRP from the IBBI recommended list in the larger interests of the stakeholders. One thing is clear, apart from the aforesaid justification, there is no other statutory backing in the NCLT rejecting the recommendation of R2. 12. The statutory scheme in this regard appears clear enough. Section 7 deals with initiation of CIRP by a financial creditor and Section 7(3)(b) states that the financial creditor shall, along with application furnish '.... the name of the resolution professional proposed to act as interim resolution professional...'. Thus, it is mandatory for the FC to ....
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.... the resolution professional, as proposed respectively in the application under section 7 or section 10, shall be appointed as the interim resolution professional, if no disciplinary proceedings are pending against him. (3) Where the application for corporate insolvency resolution process is made by an operational creditor and- (a) no proposal for an interim resolution professional is made, the Adjudicating Authority shall make a reference to the Board for the recommendation of an insolvency professional who may act as an interim resolution professional; (b) a proposal for an interim resolution professional is made under sub-section (4) of section 9, the resolution professional as proposed, shall be appointed as t....
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....of the committee of creditors. (2) The committee of creditors, may, in the first meeting, by a majority vote of not less than sixty-six per cent. of the voting share of the financial creditors, either resolve to appoint the interim resolution professional as a resolution professional or to replace the interim resolution professional by another resolution professional. (3) Where the committee of creditors resolves under sub-section (2)- (a) to continue the interim resolution professional as resolution professional, subject to a written consent from the interim resolution professional in the specified form it shall communicate its decision to the interim resolution professional, the corporate debtor and the Adjudica....