TaxTMI 
TaxTMI 
2026 (8) TMI 425
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....e both appeals are being disposed of by passing this common judgment. 2. The factual matrix of the aforesaid appeals is in terms that a group of homebuyers file an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (Code) being Company Petition No. 134 of 2021 against the Corporate Debtor (CD) namely Swastik Homebuild Pvt. Ltd. and vide order dated 19.12.2024, the petition was admitted and the Corporate Insolvency Resolution Process (CIRP) was initiated against the CD and Respondent No. 1 i.e. Shri Suman Kumar Verma was appointed the Interim Resolution Professional (IRP). 3. On making public announcement on 23.12.2024, the creditors were requested to submit their claims on or before 06.01.2025. 4. It is further reflected that appellant no. 1 Catalyst trusteeship Ltd. (Catalyst) is registered as a Debenture Trustee under SEBI (Debenture Trustee) Regulations, 1993 and is a Debenture Trustee of the debenture holder SWAMIH Investment Fund-I (SWAMIH) which was acting through its investment manager, SBI Ventures Ltd. 5. It is clarified in the appeal that SWAMIH is a special window fund announced by the Government of India to provide priority debt financin....
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.... and therefore the appellants have lost complete trust in the IRP and in the absence of trust the entire object of the resolution of the CD and balancing the interest of the stakeholders has been defeated. 11. It is further submitted that Appellant No. 1 had filed a complaint on 9th April 2025 before the Insolvency and Bankruptcy Board of India against the IRP for his misconduct. While disposing of the said complaint, the IBBI acknowledged the existence of a deadlock among the members of the CoC and it has advised the IRP to take appropriate steps to address the deadlock existing among the CoC members by approaching the Learned Adjudicating Authority. 12. It is further submitted that the impugned order is a non-speaking order, devoid of any reason, as it fails to consider and deal with material averments made by the appellants. Elaborating further it is submitted that the IRP has conducted the CIRP in an improper and prejudicial way as vide email dated 28/1/2025, 29/1/2025, 31/01/2025, 04/02/2025, and 07/02/2025, the IRP was requested to convene the CoC meeting, however, he failed to act on the repeated requests of the Appellants while it was his mandatory duty under Regulati....
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....ndency of IA number 786 of 2025 regarding the CIRP cost and part payment of Rs. 4 lakh by appellant No.1 and unresolved queries regarding the CIRP cost. 16. Learned Counsel for the Appellant has relied on the following judicial precedents: (i) M/s. Conquerent Control Systems Pvt. Ltd. vs. M/s. Ansal Crown Infrabuild Pvt. Ltd. [CP(IB) No. 783 (ND)/2022, before the Hon'ble NCLT, New Delhi. (ii) Suman Kumar Verma vs. Anil Rai, IA (IBC/226/ALD/2026) before the Hon'ble NCLT, Allahabad. (iii) Suman Kumar Verma vs. Countertops, IA (IBC) 5132 (MB) 2025 before the Hon'ble NCLT, Mumbai. (iv) Dushyant Dave, Erstwhile Resolution Professional M/s. Altius Digital Pvt. Ltd. vs. Gospell Digital Technology Co. Ltd. and Ors., CA (AT) (Ins) No. 656 of 2024 before the Hon'ble NCLAT, New Delhi. (v) Anil Kumar vs. Allahabad Bank & Ors., CA (AT) (Ins) No. 786 of 2020 before the Hon'ble NCLAT, New Delhi. (vi) Anoop Kumar Srivastava vs. Neerav Bhatnagar, CA (AT) (Ins) No. 823 of 2023 before the Hon'ble NCLAT, Principal Bench, New Delhi. 17. Per contra Ld. Counsel for the Respondent-IRP submits that there is no illegality in the orders passed by th....
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.....2025. 22. It is also submitted that as claimed by the appellant the claim of M/s Genesis Infratech Pvt. Ltd. is admitted by the Respondent is not true as the same has been rejected. 23. It is also submitted that the IRP/RP has strictly acted within the IBC framework adhering to the provisions contained under the Code and Regulations and no modification of any contact has been done by the Respondent. 24. It is also submitted that Ld. Adjudicating Authority vide order dated 05.05.2025 has already directed that the Resolution passed by the CoC shall not be put into effect till the final decision is passed in IA No. 434 of 2025 and thus the powers contemplated in the Code was never exercised by the Respondent. 25. It is also submitted that there is no deadlock in the insolvency process and the conduct of the appellants is always of non-cooperation and except few resolutions they have never approved necessary resolutions for publication of EOI, appointment of valuers, transaction auditor, accountant, security guard and financial auditor etc. and moreover the CIRP cost amounting to Rs. 20 lakhs till 18.03.2026 also remains unpaid and the same was not paid even after the orde....
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....r of the Learned Adjudicating Authority are patently false. No modification of any contract was carried out by the IRP and the matter was only placed before the CoC. And after approval of the same it was resolved that the terms of the agreement dated 7/12/2020, executed between the corporate debtor and Catalyst Trusteeship Ltd., which are not suitable for the resolution plan, be kept in abeyance and not to be enforced. 31. It is further submitted that there is no deadlock in the CIRP proceedings. The allegations which have been leveled by the appellant against the IRP are not correct. Moreover, the judicial precedents relied on by Ld. Counsel for the appellant in favor of his case are not applicable to the facts and circumstances of this case. 32. Ld. Counsel for the Respondent No. 2 has also relied on the following case laws: (i) Indian Bulls Housing Finance Ltd. vs. Sandeep Chandna & Ors., [CA (AT) (Ins) No. 619 of 2021]. (iii) Bikram Bhadur vs. CoC of Beoworld Pvt. Ltd.& Ors. [(2025) ibclaw.in 944 NCLAT] (iv) Katra Realtors Pvt. Ltd. vs. Mr. Rajesh Ramnani, RP & Anr. [(2024) ibclaw.in 136 NCLAT] (v) Subrata Roy & Ors. vs. Rajiv Mohan & O....
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.... India (IBBI) to investigate the role of Appellant in the present CIRP proceedings and take further necessary action as per existing provisions of IBC and relevant regulations". 35. This appellate tribunal again in Anil Kumar Ex Interim Resolution Professional (IRP) Of M/ s. KSL & Industries Limited v. Allahabad Bank & Ors., CA (AT) (Ins) No. 786 of 2020 has held as under: "3. The Learned Adjudicating Authority after hearing the parties passed the following orders: - "11. Under such circumstances, when there is a conflict and no consensus is reached by the majority of voting share to appoint the IRP/ RP so proposed by the Applicant, it is expedient to appoint an independent IRP/ RP to break any kind of stalemate between the Financial Creditors. Moreover, the very object of IB Code is to complete the CIRP in the time bound manner and if the dispute with regard to the IRP will continue, in that event, the very object of the IB Code will get frustrated. The IB Code prescribes timelines for various activities of the CIRP. It is mandatory to complete a CIRP within 180 days, extendable by a one-time extension of up to 90 days [M/s. Surendra Trading Company v. M/s. Ju....
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..../RP invoked thereunder part m Rule 11 and rightly have passed the Impugned order. (vii) Further, from the perusal of the Status Report submitted by the Respondent No. 2- M/s LSL & Industries Ltd., through Mr. Kiran Shah on 29.06.2021, which has been discussed in detail, it reveals that substantial progress in the CIRP proceedings had been made. (viii) Taking all these circumstances and also the fact that the Appellant has only argued on one question of law which was formulated by this Tribunal under this Order dated by 17.09.2020, is only about the exercise of power of Rule 11 of NCLT by the Learned Adjudicating Authority in the facts of this case. (ix) We are of the considered that the Learned Adjudicating Authority have rightly exercise this power and there is no merit in the Appeal and is accordingly dismissed. (x) It appears from the perusal of the record that this Instant Appeal was filed on 03.09.2020 before this Tribunal and Notices were issued on 17.09.2020 and being disposed off by Judgement dated 20.07.2021". 36. In Anoop Kumar Srivastava v. Neerav Bhatnagar, CA (AT) (Insolvency) No. 823 of 2023 this appellate tribunal again opined a....
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....tion and direct for replacement of present IRP. The copy of this order be placed before the Adjudicating Authority. The Adjudicating Authority to immediately appoint a new IRP in accordance with the statutory provisions of IBC and regulations framed thereunder. No costs". 37. The Hon'ble Supreme Court in Glas Trust Company vs. Byju Raveendran & Ors. [(2025) 3 SCC 625] held as under: "68. Rule 11 of the NCLT Rules, 2016 and Rule 11 of the NCLAT Rules, 2016, which preserve the inherent powers of NCLT and NCLAT, respectively, mirror Section 151 CPC and read as follows: "11. Inherent powers. -Nothing in these Rules shall be deemed to limit or otherwise affect the inherent powers of the Appellate Tribunal to make such orders or give such directions as may be necessary for meeting the ends of justice or to prevent abuse of the process of the Appellate Tribunal." 69. In a consistent line of precedent, this Court has held that "inherent powers" may be exercised in cases where there is no express provision under the legal framework. However, such powers cannot be exercised in contravention of, conflict with or in ignorance of express provisions of law. We m....
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....ty's residuary powers under Section 60(5)(c) of the IBC, NCLT's inherent powers under Rule 11 of the NCLT Rules, 2016 or even the powers of this Court under Article 142 of the Constitution must be closely scrutinised for broader compliance with the insolvency framework and its underlying objective. The adjudicating mechanisms which have been specifically created by the statute, have a narrowly defined role in the process and must be circumspect in granting reliefs that may run counter to the timeliness and predictability that is central to IBC. Any judicial creation of a procedural or substantive remedy that is not envisaged by the statute would not only violate the principle of separation of powers, but also run the risk of altering the delicate coordination that is designed by IBC framework and have grave implications on the outcome of CIRP, the economy of the country and the lives of the workers and other allied parties who are statutorily bound by the impact of a resolution or liquidation of a corporate debtor." 38. This Appellate Tribunal, in Indian Bulls Housing Finance Limited vs. Sandeep Chandna & Ors.[Company Appeal (AT) (Ins.) No. 619 of 2021] opined as under: ....
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....tment of Resolution Professional- (1) The first meeting of the committee of creditors shall be held within seven days of the constitution of the committee of creditors. (2) The committee of creditors, may, in the first meeting, by a majority vote of not less than seventy-five 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 Adjudicating Authority; or (b) to replace the interim resolution professional, it shall file an application before the Adjudicating Authority for the appointment of the proposed resolution professional along with a written consent from the proposed resolution professional in the specified form. ....
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....CoC to proceed in accordance with law. We hold that there is no provision under the Code which empowers one of the Members of the CoC to approach this Tribunal seeking replacement of the IRP or RP when the same is rejected by a majority of Members of the CoC". 39. This Appellate Tribunal, in Bikram Bhadur v. CoC of Beoworld Pvt. Ltd. and Ors., (2025) ibclaw.in 944 NCLAT again held as under: "5. Under Section 27, it is the CoC which is empowered to replace the Resolution Professional with requisite majority. The CoC which is existing as on date and functioning has passed the resolution for change of the RP which has been approved the impugned order. The mere fact that appellant is aggrieved by the constitution of the CoC and made a challenge which is pending consideration in this Tribunal cannot be a ground to oppose the appointment of the RP who has the approval under Section 27." 40. This Appellate Tribunal, in Subrata Roy and Ors. v. Rajiv Mohan and Ors., (2026) ibclaw.in 539 NCLAT opined as under: "26. When the statutory provisions are unambiguous and fully empowers the CoC to replace the RP by following the prescribed procedure and parameters laid down u....
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.... the Code also entrusts the IRP with the duty to maintain an updated list of claims. Therefore, depending upon the nature and the quantity of the debt, it is the duty of the IRP or RP, or as the case may be, to maintain up-to-date list of claims. It is on the basis of this updated list of creditors the CoC is required to be constituted. Any creditor who is aggrieved by the act of the IRP may approach the Learned Adjudicating Authority by filing appropriate proceedings and thus the only fact that the claim of the creditors has not been admitted in full may not be the sole ground to remove the IRP. 43. We also notice that the learned tribunal in the impugned order has also stated that the IRP had received further claims of three operational creditors and 70 homebuyers and till 8-3-2025, total claim of two financial creditors, four operational creditors and 137 homebuyers have been filed. Further claims of 67 homebuyers out of 70 claimants were admitted after due verification. Accordingly, the CoC was reconstituted on 8th March 2025 and updated claims were filed to the IBBI and also to the Adjudicating Authority through IA No. 424 of 2025. The list was also shared with the creditor....
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....ns of the terms of the contract are also leveled against the IRP. The IRP claimed that by virtue of power granted under Section 20(2) of the Code, the IRP is empowered to enter into a contract on behalf of the CD and may also modify contracts entered into by the CD prior to the initiation of the insolvency process date, in order to keep the CD as a going concern. 48. We notice that the issue of modification of the contract agreement dated 7th December 2022, executed between CD and the appellant, was discussed in the 3rd CoC meeting and it was resolved that the terms of its contract dated 7 December 2020, which are not suitable for the resolution plan, be kept in abeyance. It is also reflected that IA No. 434 of 2025 was filed by the appellant and it was directed by the Adjudicating Authority, while passing the order dated 5 May 2025, that the aforesaid resolution shall not be put into effect till the final decision of the application pending before the Adjudicating Authority. Thus, this resolution was not acted upon and therefore we find substance in the submissions of the Ld. Counsel for the IRP that the aforesaid resolution of the CoC was never acted upon. We therefore find th....
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....ulation 17: Constitution of Committee. (3) Where the appointment of resolution professional is delayed, the interim resolution professional shall perform the functions of the resolution professional from the fortieth day of the insolvency commencement date till a resolution professional is appointed under Section 22. 53. The Regulation 17(3) of the CIRP Regulations 2016 would clearly suggest that where the appointment of the resolution professional is delayed, the IRP shall perform the function of the RP from the 40th day of the insolvency commencement date till a RP is appointed under Section 22 of the Code. It is claimed by the respondent that the IRP was acting as the RP under this Regulation and the aforesaid contention of the Respondent is also fortified by the resolution passed in the fourth CoC meeting held on 5th May 2025 at resolution No. 3. 54. Respondent IRP, in its written submissions, has also stated that the Home Buyers have insisted on him to convene a meeting of the COC by sending an email dated 18th March 2026. The IRP, under Regulation 18 of the CIRP Regulations 2016, was bound to convene the meeting if it is requisitioned by 33% members of the COC.....