TaxTMI 
TaxTMI 
2026 (8) TMI 107
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....q.)/5/CH/2024 in C.P.(IB) No. 63/CHD/PB/2019. By that order, the Adjudicating Authority directed liquidation of M/s Macro Dairy Ventures Private Limited ("Corporate Debtor"). It also appointed Mr. Rajeesh Gupta ("Respondent No. 2") as Liquidator, choosing him independently from the IBBI panel. This was done even though the sole member of the Committee of Creditors ("CoC"), Punjab National Bank ("Respondent No. 1"), holding 100% voting share, had already recommended the Appellant for that very office. Factual Background: 2. By Order dated 30.11.2022, the Adjudicating Authority admitted the Section 7 application filed by Respondent No. 1. It declared a moratorium under Section 14 of the Code and appointed Mr. Krishan Vrind Jain as Interim Resolution Professional ("IRP") of the Corporate Debtor. 3. In the 4th CoC meeting held on 10.05.2023, the CoC resolved, with 100% voting share, to replace the IRP with Mr. Anand Sonbhadra as Resolution Professional ("RP"). The Adjudicating Authority confirmed this appointment on 20.07.2023. It is undisputed, and confirmed by the Impugned Order itself, that the Appellant was never appointed IRP or RP of the Corporate Debtor at any stage. ....
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....No. 2 independently from the IBBI panel by reference to the general guidelines dated 18.07.2023. This distinction matters for the analysis that follows. 12. Aggrieved, the Appellant filed I.A. No. 166 of 2026 under Rule 154 of the National Company Law Tribunal Rules, 2016, seeking rectification of the Impugned Order. That application was dismissed on 20.02.2026, on the ground that there was no error apparent on the face of the record capable of rectification under Rule 154. This led the Appellant to file the present Appeal. 13. By Order dated 23.03.2026, this Tribunal issued notice on the Appeal. It also restrained Respondent No. 2 from auctioning any assets of the Corporate Debtor pending disposal of the Appeal. 14. By Order dated 29.06.2026, this Tribunal recorded the submissions made in unison by counsel for the Appellant and counsel for Respondent No. 1. Both submitted that the circular relied upon by the Adjudicating Authority had "already been struck off", that the Appellant "was never appointed as the Resolution Professional", and that the Adjudicating Authority had "wrongly applied the circular to the fact situation." This Tribunal further observed, prima facie, th....
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....Kumar, Company Appeal (AT)(Ins) No. 99 of 2026 (17.04.2026). 19. Further, the IBBI communication dated 18.07.2023 was, in any event, inapplicable to the Appellant on its own terms. That communication was directed at preventing the erstwhile IRP or RP from becoming Liquidator. The Appellant held neither office at any stage; those offices were held successively by Mr. Krishan Vrind Jain and Mr. Anand Sonbhadra. The appeal thus deserves to be allowed on this short ground alone. 20. On the objection regarding AFA, it is submitted that this ground is extraneous to the Impugned Order, which does not refer to it at all. Further, Respondent No. 2 was not a party before the Adjudicating Authority and cannot use the appeal to supplement or improve upon the reasoning actually given below. In any event, it is submitted that the Appellant holds a valid AFA. 21. On the claim of substantial progress, the claim is overstated. This Tribunal's interim order dated 23.03.2026, passed barely seven weeks after the Impugned Order, restrained Respondent No. 2 from auctioning any assets. Respondent No. 2 himself admits that the auction has been kept in abeyance solely because of that order. Si....
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....p; Consultation Committee (SCC). He has convened three meetings of the SCC, the third of which, held on 04.05.2026, specifically resolved to contest the Appellant's eligibility on the AFA ground. It is submitted that Respondent No. 2 has substantially completed the liquidation process, save for the final auction, which remains in abeyance only because of this Tribunal's interim order dated 23.03.2026. 26. It is further submitted that Respondent No. 1, holding 99.91% voting share, has raised no objection to Respondent No. 2 continuing as Liquidator. It is submitted that displacing him at this stage, after nearly six months of work, would cause him financial and professional prejudice, and would jeopardise timely completion of liquidation under Regulation 44 of the Liquidation Process Regulations. 27. Reliance is placed on Mr. Nipan Bansal (supra) for the proposition that a former Resolution Professional has no vested right to appointment as Liquidator, and that an incumbent Liquidator should not be displaced mid-process where the majority financial creditor is satisfied with his work. Analysis and Findings 28. We have heard both sides and als....
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....nds applied to the Appellant, the CoC's own recommendation of a named Liquidator, arrived at unanimously and reaffirmed twice, was material that the Adjudicating Authority was required to consider before appointing someone else. An order that appoints a Liquidator without any reference to the CoC's recommendation cannot be said to have applied its mind to that recommendation at all. 33. Independently of this, we now examine whether the IBBI communication dated 18.07.2023 could, in any event, have justified passing over the CoC's choice, had the Adjudicating Authority considered and rejected it. Section 34(4) permits the Adjudicating Authority to replace a resolution professional as Liquidator only where the IBBI recommends replacement of that particular professional, for reasons recorded in writing, or where a submitted resolution plan has been rejected. 34. We note that this Appellate Tribunal, in Manish Jaju v. Committee of Creditors of Rajesh Landmark Projects Private Limited (supra), held that this power is a power to recommend replacement of a particular resolution professional, on facts specific to that professional. It cannot be converted into a general, cl....
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.... not be brushed aside merely because it surfaces for the first time in appeal. 40. Firstly, we find that the Impugned Order records no finding on this point, since it does not appear anywhere in the Adjudicating Authority's reasoning. This appeal must primarily be tested against the reasoning the Adjudicating Authority actually gave. Second, the Appellant has placed on record, as Annexure R-4 to the Rejoinder, what he asserts is a valid and subsisting AFA, and has denied that his AFA was invalid during the period in question. Third, Respondent No. 2's own annexure on this point is a printout downloaded from the IBBI website. Such records are maintained by the Insolvency Professional Agency concerned and are capable of correction or renewal. Their interpretation on a limited appellate record, without the benefit of any finding by the Adjudicating Authority, is not something we are well placed to resolve conclusively. 41. We are thus accordingly not persuaded to accept Respondent No. 2's objection as a ground to sustain the Impugned Order, since it formed no part of that order's actual reasoning. Equally, we decline to record a final finding that the Appellant&#....
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....e is the reverse. The sole Financial Creditor, holding 100% voting share, has itself recommended the Appellant, twice, and continues to support him before this Tribunal. The principle that a former professional has no vested right to appointment is not in dispute. But that principle addresses a claim made against the CoC's wishes, not a claim made in step with them. Nipan Bansal therefore offers no support for sustaining the Impugned Order. This Tribunal notes, without resting its decision on this alone, that Nipan Bansal is stated to be pending challenge before the Hon'ble Supreme Court. 45. On the claim that Respondent No. 1 has no objection to Respondent No. 2 continuing, the record points the other way. Respondent No. 1 has, through counsel, associated itself with the Appellant's case that the Adjudicating Authority wrongly applied the IBBI communication. It has filed no separate reply opposing this Appeal. It has reaffirmed its recommendation of the Appellant at every relevant stage, including the 9th and 17th CoC meetings. A bare reference to an absence of objection, recorded in the 3rd SCC meeting convened by Respondent No. 2 himself, cannot be treated as Resp....