In a recent case, the National Company Law Appellate Tribunal ( NCLAT ) directed the National Company Law Tribunal ( NCLT ) to decide after considering the reply since the Resolution Professional ( RP ) failed to examine the issue of reconstitution of the Committee of Creditors ( CoC ).
SREI Equipment Finance Ltd, the appellant filed an appeal against the order passed by the Adjudicating Authority (National Company Law Tribunal, New Delhi, Court – V), by which order Adjudicating Authority issued certain directions and applications were directed to be listed on 11.03.2024.
The application was filed by the Punjab National Bank ( PNB ), where it was pleaded to Pass appropriate directions to the Resolution professional to conduct a Transaction Audit of the books of the Corporate Debtor in compliance with the order dated 01.12.2021 & 04.04.2022 appointing Mr Amit Khandelwal as an independent auditor.
Sh. Krishnendu Datta, Sr. Advocate appearing for the Appellant challenging the order submitted that the Adjudicating Authority has directed the Resolution Professional ( RP ) to examine the issue afresh and submitted its view on the next date of hearing which indicates that there was some material to examine the issue of reconstitution of the Committee of Creditors ( CoC ), whereas, there is no material or reason to issue any such direction.
It was submitted that the Resolution Plan has already been approved by the CoC in June 2022 and is pending before the Adjudicating Authority. Sh. Arvind Nayyar appearing for PNB refuting the submissions of the Appellant submitted that an earlier RP was replaced and the new RP was appointed who had appeared before the Adjudicating Authority on 29.01.2024 whose statement was noted. It was submitted that in the application, PNB has been praying for direction for the reconstitution of the CoC and the issue was very much alive.
Counsel for the ex-Directors submitted that the question of reconstitution of the CoC arises on account of order of IBBI, where reconstitution of the CoC by the earlier RP was frond of.
The subsequent order indicates that Applicant was directed to issue Notice to all Members of the CoC alongwith the copy of the application for filing the Reply and appearance.
The subsequent order indicated that earlier directions have been followed by fresh direction of issuing Notice and filing Reply which indicates that all issues in I.A. 3151/2022 was open to be decided and considered by the Adjudicating Authority after hearing all the parties including the Appellant, who was Member of the CoC.
The three-member bench of Justice Ashok Bhushan, Chairperson, Barun Mitra, Member (Technical) and Arun Baroka, Member (Technical) viewed that since the Adjudicating Authority in subsequent order makes it clear that the application may be decided afresh after hearing both the parties and considering the Reply, there is no reason to keep the appeal pending.
It was noted that in order, the Adjudicating Authority had directed the RP to examine the issue afresh and submit its view on the next date of hearing. Counsel for the RP submitted that he has not received the relevant documents by Appellant and erstwhile RP. The bench held that Adjudicating Authority shall decide the application after considering the Reply of the parties in accordance with law.
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