Deepak Gupta(HUF) & Indu Mittal vs Anuj Kumar Tiwari

Rajasekhar V.K. Member(Judicial)

The Court convened through videoconferencing.

Through this application the members of the Committee of Creditors ‘CoC’ of Sparkspell Homes Private Limited is seeking replacement of present Resolution Professional by proposing to appoint another person as RP.

The facts, in brief, are that, that the Corporate Debtor in the present case, was admitted into CIRP by the order of this Adjudicating Authority dated 28.08.2019 and Mr. Mohit Maheshwari was appointed as IRP. He was later replaced by Mr. Sudhir Shukla as RP vide order of this Adjudicating Authority dated 23.10.2019. Then again an application was filed by CoC for replacement of RP which was allowed by this Adjudicating Authority vide order dated 31.08.2020, and Mr. Anuj Kumar Tiwari was appointed as the RP.

It is further submitted that after the commencement of CIRP, the then RP was unable to perform the duties cast upon him. So, the CoC passed a resolution to replace him with Mr. Anuj Kumar Tiwari. Mr Tiwari conducted the 8th CoC meting dated 29.10.2020 in which several resolutions were passed. This included filing of application before this Adjudicating Authority to report the fraudulent and the undervalued transaction entered into by the Corporate debtor to defraud the creditors. Another resolution was to appoint valuers for valuation of assets and to perform other task related to CIRP of the corporate debtor to complete the process in a timely manner.

It is further stated that even after regular follow ups and sending various mails to RP, the RP does not perform his duties and has deliberately withheld all of the information from CoC, thus acting in a biased manner. When no response was received from the RP, the CoC decided to convene the 9th COC meeting on. 23.11.2020.

Ld counsel for the CoC has further placed some instances of biased and illegal acts of RP as the CoC requested RP to record the proceedings of 9th CoC meeting. To this, the RP expressed his inability to do which was scheduled to be convened through audio visual on the pretext of cost involved. The minutes of the meetings circulated by RP was also lacking many aspects. Therefore, the CoC decided to replace the RP. The CoC also requested RP vide its email dated 05.12.2020 to convene the meeting for passing resolution foe liquidation of Corporate Debtor since the CIRP period is going to expire on 21.12.2020, and also to consider replacement of RP. However, the RP has not considered it and has filed frivolous applications against the claims of both the CoC members.

It is in these circumstances that this application is filed for replacement of the present RP with Mr. Sukhdev Madnani, another resolution Professional as RP or liquidator.

The learned counsel for the RP stated that this was the third RP appointed by CoC in this matter. I is submitted that the applicants misused their position as sole creditors of CoC and the entire CIRP was run by both the applicants upon their own whims and fancies. They had put exaggerated claims and application in this regard has also been filed. It is further submitted that the allegations have been made merely because their claims were challenged and claims of homebuyers were entertained by RP as from the beginning of the CIRP, the intention of the applicants was not resolution but liquidation of the corporate debtor.

We have considered the submissions made by both sides and material on record.

It is also found that the original IRP was not appointed as RP and some other insolvency professional was appointed as RP at the instance of CoC, then he was again replaced by CoC. Now, this application, for the third replacement of the RP has been filed which is not the intent of the Code. If there is any misconduct on the part of the RP, then it is the duty of the CoC members to bring the same to the notice of the IBBI for initiating such action against the insolvency professional as may be deemed necessary in this regard. The regular churning of the RP that we have witnessed in the present case may not be the answer. Thus, for this reason alone, this application is liable to be dismissed.

This approach of the members of CoC indicates that such member wants the RP who should function to take care of his interest at the cost of other stakeholders. The office of the RP is an independent institution who is tasked with the responsibility to work in a neutral and a fair manner. Hence, the approach of the CoC in the present case seems to be to keep the sword of Damocles hanging over the head of the RP in case the RP failed to do its bidding. While the RP is duty bound to carry out the directions of the CoC, the question that arises in the present case is what has transpired that has required replacement of the RP on multiple occasions. This may need a probe by the IBBI.

In the result, this IA No.357/2020 stands dismissed and disposed of in terms indicated above.

If there is any misconduct on the part of the IBBI, then it is the IBBI that is tasked with the duty to act in this regard. Therefore, the Registry is directed to send a copy of this application to the IBBI to see if any action is called for, since it is the IBBI that is the disciplinary authority for insolvency professionals.

Urgent certified copies of his order, if applied for, are supplied to the parties upon compliance of all requisite formalities.