NCLAT upheld the discretion of the Adjudicating Authority in appointing a Resolution Professional under Section 95 of the Insolvency and Bankruptcy Code.
The National Company Law Appellate Tribunal (NCLAT), Principal Bench reviewed an appeal and held that the Adjudicating Authority has the discretion to appoint a Resolution Professional from the IBBI list, provided no disciplinary proceedings are pending against them, and there is no requirement to forward the name for nomination by the IBBI Board.
The National Company Law Appellate Tribunal (NCLAT) heard the appeal filed by the Appellant against the order passed by the Learned Adjudicating Authority (National Company Law Tribunal, Allahabad Bench, Prayagraj), which appointed the Resolution Professional (RP) under Section 95 of the Insolvency and Bankruptcy Code, 2016. The Appellant challenged the order, arguing that the initially nominated RP was unavailable and had demitted the office. Subsequently, another RP was recommended by the Creditor. The Appellant, a Personal Guarantor, also filed an application for the appointment of a different RP, which was rejected by the Adjudicating Authority in favor of the Creditor's application.
The Appellant contended that the Adjudicating Authority had failed to properly exercise its power to appoint an RP under Section 95 of the Insolvency and Bankruptcy Code. In response, the Adjudicating Authority observed that the RP proposed by the Creditor, Mr. Pratap Mukherjee, was eligible for appointment. The Authority noted that Mr. Mukherjee’s authorization to act as an Insolvency Professional was valid until 20.10.2024, and upon verifying his credentials and confirming that no disciplinary proceedings were pending against him, the Adjudicating Authority appointed him as the new RP in place of Mr. Alok Kumar Bose.
The Appellant further argued that the Adjudicating Authority should have forwarded the name of the RP for nomination by the IBBI Board. However, the NCLAT found no merit in this argument, as the relevant rules empowered the Adjudicating Authority to select an RP from the IBBI list, provided no disciplinary proceedings were pending against the individual. The NCLAT concluded that there was no substantial error in the order of the Adjudicating Authority and dismissed the appeal.
Mohit Chaudhary, Prakhar Mithal and Raghav Dikshit, Advocates represented the Appellant.
The Respondent was not represented by any counsel.
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