TaxTMI 
TaxTMI 
2025 (12) TMI 231
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....impugned order dated 07.07.2025, as it has been passed by the NCLT, Chennai Bench - II in IA(IBC)/917/CHE/2025 as rendered in CP(IB)/188/CHE/2023 is bad in the eyes of law for the following reasons: - (i) That the impugned order suffers from the vices of being in violation of the Principles of Natural Justice because, since the impugned order is having a civil consequence, the Appellant was required to be mandatorily heard, which has not been done prior to passing of the order. (ii) That the action taken by virtue of the impugned order dated 07.07.2025, is in violation of adoption of the procedure prescribed under Section 27 of the I & B Code, 2016. 2. Brief facts are that M/s. MQ Network Private Limited, the Corporate Debtor, that was placed under the CIRP Process, and consequent to which the Appellant, who appears in person, was appointed as a Resolution Professional. In the impugned order, the direction has been issued to replace the Appellant, from functioning as the Resolution Professional, owing to the fact that the financial creditor sought his replacement as Resolution Professional on the ground that his attitude and aptitude were found to be non-cooper....
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....hich was convened by him. On the other hand, the argument of the Appellant, i.e., the Resolution Professional, is that the directions issued by the Learned NCLT on the basis of the email communication of the Financial Creditor pertaining to the conduct of the Resolution Professional directing to replace the Resolution Professional, was in violation of the provisions contained under Section 27 of the I & B Code. Section 27 of the I & B Code is extracted hereunder: - "27. Replacement of resolution professional by committee of creditors (1) Where, at any time during the corporate insolvency resolution process, the committee of creditors is of the opinion that a resolution professional appointed under section 22 is required to be replaced, it may replace him with another resolution professional in the manner provided under this section. ^1[(2) The committee of creditors may, at a meeting, by a vote of sixty-six per cent. of voting shares, resolve to replace the resolution professional appointed under section 22 with another resolution professional, subject to a written consent from the proposed resolution professional in the specified form.]. (3) The....
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....the 2nd CoC meeting. One of the questions which will emerge for consideration would be that, whether the Appellant, when he himself has avoided to place the communication of 22.04.2025 proposing replacement of RP in the Agenda for the 2nd CoC meeting, thus circumventing provisions of Section 27 of the Code, can now take an advantage of the non-compliance of the said provisions contained under Section 27 of the I & B Code, 2016, to challenge the impugned order, which has been passed by the Tribunal. Apparently, the answer would be that since being the Resolution Professional, the Appellant was expected to act fairly and was also supposed to place the Agenda before the CoC, even when it contains a prayer for his replacement in the light of the provisions contained under Section 27(2) of the I & B Code, 2016. Having not done so, the Appellant may not have the liberty to argue that, the removal of his or a direction contained in the impugned order for replacement of the Resolution Professional was in violation of Section 27 of the I & B Code, 2016. 5. The fact remains that the Agenda formulated for the 2nd CoC meeting, did not include the issue flagged by the Respondent/Financial Cr....
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....for replacement of the Resolution Professional, which has to be resorted to in the light of the provisions contained under Section 27 of the I & B Code, 2016. But then we cannot be oblivious of the fact that, in all the earlier communications made by the Respondent, they were consistently requesting the 2nd CoC meeting be conducted to consider their proposal for replacement of RP under the provisions contained under Section 27 of the I & B Code, 2016 and that there was persistent inaction on the part of the Appellant as he was trying to take an advantage of his own inaction so as to continue to function as Resolution Professional. The filing of an application under Section 60(5) of the I & B Code, 2016, would be tenable as the statute does not contain any such contingency that, where the Financial Creditor intends to replace the Resolution Professional, owing to his misconduct or misbehaviour which disrupts the CIRP process, the motion for replacement could be placed in any other manner except for Section 27 of the I & B Code, 2016. In view of the above, the process of replacement of the Resolution Professional, at the request of the Financial Creditor, could only be possible by mo....