TaxTMI 
TaxTMI 
2026 (4) TMI 1444
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.... Per: Barun Mitra, Member (Technical) The present appeal filed under Section 61 of the Insolvency and Bankruptcy Code 2016 ('IBC' in short) by the Appellants arises out of the Order dated 02.03.2026 (hereinafter referred as 'Impugned Order') passed by the Adjudicating Authority (National Company Law Tribunal, New Delhi, Bench - II) in I.A No. 917 of 2026 & IA No. 931 of 2026 in CP (IB) No. 1718(PB) of 2018. By the impugned order, the Adjudicating Authority has disposed of both IAs by directing the replacement of the current Resolution Professional ("RP" in short) with a RP selected by them. Aggrieved by the impugned order, the present appeal has been preferred. 2. Coming to the brief facts of the case, two IAs, namely IA Nos. 917 and 931 of 2026 have been filed in CP(IB) No. 1718(PB) of 2018 in respect of CIRP of the Corporate Debtor-Three C Projects Pvt Ltd. In its 52nd meeting held on 11.02.2026, the CoC had approved the replacement of the existing RP with the proposed RP, Shri Krit Narayan Mishra following which IA No. 917 of 2026 was filed. IA No. 917 of 2026 had been preferred by the Authorised Representative of the Financial Creditors in class comprising Homebuyers- a....
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....decision of the CoC has the support of 66% vote share and the proposed RP whose consent for this purpose is not undergoing any disciplinary proceedings. It was submitted that when the CoC in the instant case had followed the requirements set out by Section 27 of the IBC and had resolved with 100% voting-share to appoint Shri Krit Narayan Mishra with his prior consent as the new RP, in place of the current RP, the Adjudicating Authority could not have appointed another person as the new RP disregarding the choice of the CoC. When all the condition precedents laid down by Section 27 of the IBC for appointment of a particular insolvency professional as the replacement RP had been complied with, the Adjudicating Authority could not have looked beyond these statutory conditionalities and imposed its wisdom on the insolvency professional to be appointed as the new RP. In support of their contention, reliance was placed on the judgement of this Tribunal in Venus India Asset-Finance Pvt. Ltd. Vs Suresh Kumar Jain, RP in CA(AT)(Ins) No. 1395 of 2022 to contend that the decision to replace the existing RP with another RP lies within the domain of the CoC and the Adjudicating Authority does n....
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....he fact that the RP had engaged a legal counsel to defend his interests in IA No. 931 before the Adjudicating Authority. It was pointed out that the new RP had acted in connivance with a group of home-buyer/ allottees to whom he extended certain assurances prior to his appointment which were contrary to the statutory framework of the IBC and the Code of Conduct for the Insolvency Professionals. This conduct of the proposed RP was not in alignment with the principles of neutrality and transparency. In such circumstances, the Adjudicating Authority had rightly undertaken to scrutinise the conduct of the proposed RP and on finding sufficient grounds that the proposed RP had displayed "extraordinary interest" in his own appointment decided to reverse the appointment. The Adjudicating Authority was also well within its rights not to agree to the choice of the CoC in the appointment of the replacement RP to safeguard the integrity of the process of appointment of RP. 5. We have duly considered the arguments advanced by the Learned Counsel for the parties and perused the records carefully. 6. The short question that requires to be answered is whether the decision of the Adjudicating....
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....posed RP on the proper implementation of the resolution process. This expectation of the CoC from the proposed RP was a legitimate expectation and the positive assurance given in response by the proposed RP did not violate any parameters of the IBC. Further seeking of legal opinion by the CoC from the proposed RP prior to his appointment on issues arising out of CIRP was nothing unusual as the proposed RP was a qualified lawyer as well as a trained insolvency professional. Moreover, the RP while giving his legal opinion had made it clear that his opinion was given in an independent professional capacity and not intended to influence his appointment as RP. Seeking of legal representation by the proposed RP was also perfectly justified in IA No 931 of 2026, since he was impleaded in the said legal proceeding and the proposed RP was therefore well within his rights to be represented through a legal counsel. The apprehensions of "extraordinary interest" as returned in the findings by the Adjudicating Authority of being detrimental to the CIRP was without proper substantiation and the Adjudicating Authority had also failed to refer to a single provision of law which had been violated by....
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....l forward the name to the IBBI for its confirmation. Section 27(5) when read alongwith Section 16 of the IBC envisages that the RP proposed by the CoC should not have any disciplinary proceeding pending against him. 11. Having gone through Section 27 of the IBC, it is quite clear that as long as the decision of the CoC to propose the replacement of the current RP enjoys more than 66% vote-share and the new RP's written consent has been obtained, the name of the proposed RP is to be forwarded by the Adjudicating Authority to the IBBI for confirmation and appointment provided no disciplinary proceeding should be pending against the RP. It is also more than crystal clear that the statutory scheme does not envisage any manoeuvring room for the Adjudicating Authority to change the name of the RP proposed by the CoC with its own nominee. We also notice that the Appellant has adverted our attention to the judgement of this Tribunal in Venus India Asset-Finance judgement supra wherein it has held that "....when the CoC contemplates change of Resolution Professional, the Adjudicating Authority in terms of the statutory construct has to merely look into two basic check boxes which is whet....
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.... a new RP. It is also the case of the Respondent that the letter dated 05.01.2026 from the proposed RP clearly shows that the consent which had been given by him was conditional consent. It was also alleged that since the CoC had proposed to provide the RP performance-based bonus, this showed that the RP was being engaged for other extraneous reasons. 15. To arrive at our findings on this ground of objection raised by the Adjudicating Authority, we may retrace the steps taken by the CoC prior to suggesting the name of the new RP. We begin with the letter from CoC to the proposed RP dated 30.12.2025 and the reply from the proposed RP thereto dated 05.01.2026. When we see the letter dated 30.12.2025 addressed to the proposed RP as placed at page 216 of the Appeal Paper Book ("APB" in short) we notice that achievement of certain milestones and policies were expected from the proposed RP as extracted below: ".....1.1.1. One Lift in Tower 9,10, 12A, 14 to be installed within 45 days of your appointment. One lift for Tower 7, 8 and 11 within 150 days after placement of order. 1.1.2. WTP, Road, drains, sewer line, Civil work of STP, External fire services work to be c....
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....akeholders, receipt of statutory and administrative approvals, and absence of force majeure or other circumstances beyond the reasonable control of the Resolution Professional. Where deviations or extensions become necessary, the same shall be placed before the CoC for deliberation, and any modification of timelines or scope shall be undertaken only with the approval of the CoC, in accordance with law. My appointment, if approved, shall take effect only upon approval of the CoC by the requisite voting share and confirmation/ approval by the Hon'ble NCLT as per the provisions of the Code and the rules & regulations framed thereunder. Upon appointment, I shall function in an independent and transparent manner, discharging statutory and fiduciary duties in the interest of the Corporate Debtor and all the stakeholders, in strict compliance of the Code and all other laws for the time being in force." 18. When we look at the above reply of the proposed RP in his consent letter, we find that the proposed RP had merely conveyed his positive disposition to measure up to the CoC's expectations subject to the rigours of the IBC. Moreover, when the assurances and commitments gi....
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....t that the opinion was not tendered suo-moto by the proposed RP but had been requested by one of the Tower Representatives who was a part of the CoC and that too on the aspect of implementation of "Pool and Build" scheme and raising of interim finance. In any case, since the proposed RP was a qualified lawyer, he was competent to give his opinion on issues connected to the CIRP of the Corporate Debtor. 21. In order to return our observations on this aspect, we would like to see the response tendered by the proposed RP when the said advice was solicited from him by the Tower Representative. The said reply has been placed on record by the Appellant by way of an additional affidavit, the relevant parts of which reply is as extracted below: "From Krit Narayan Mishra <[email protected]> Date Mon 2/9/2026 1:50 PM To subrata roy <[email protected]> Dear Sir. It is with reference to your question and request for independent legal opinion in trailing mail. This legal opinion is issued strictly in response to specific legal queries raised and is based solely on the interpretation of the Insolvency and Bankruptcy Code, 20....
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....el by the proposed RP to defend his interest was the normal course of action that would have been adopted by any party if arrayed in a litigation. The Adjudicating Authority cannot be seen to question the conduct of the proposed RP on this score as it would tantamount to denying a party the legitimate right of legal representation which would be contrary to the principles of natural justice and right to fair hearing and representation. 24. We are therefore of the considered view that we do not find any specific finding returned by the Adjudicating Authority as to how the proposed RP had violated any provision of IBC or had by his conduct shown extraordinary interest in the CIRP proceedings or acted in a manner whereby he had sought to interfere in the insolvency proceedings in a non-transparent manner which had the potential of being detrimental to the CIRP or the stakeholders in the CIRP process. We do not find sufficient and substantive ground to have been made out which demonstrates that the proposed RP had acted in a manner which offended the Code of Conduct of Insolvency Professionals or acted in subversion of the IBC framework or its objectives. 25. Having said that, we....