S. Viswanathan Vs Canara Bank (NCLAT Chennai)
Summary: The NCLAT Chennai Bench disposed of two appeals filed by Mr. S. Viswanathan, former Resolution Professional of Maylari Agro Products Ltd., challenging orders of the NCLT Bengaluru dated 30 November 2021 concerning his replacement and the rejection of his application for reconfirmation. The Tribunal held that a Resolution Professional has no vested right to continue in office and that the Committee of Creditors‘ decision to replace an RP falls within its commercial wisdom, subject to compliance with the Insolvency and Bankruptcy Code, 2016 and applicable regulations. At the same time, it recognised that an RP must function independently and cannot be compelled to act according to the whims of a dominant financial creditor.
The dispute arose following commencement of the Corporate Insolvency Resolution Process on 8 March 2021. Canara Bank held 84.6% voting rights in the CoC, while Karnataka Bank held 15.4%. The appellant claimed that the first CoC meeting on 9 April 2021 unanimously approved his continuation as RP at ₹3 lakh per month, but Canara Bank subsequently disputed the minutes, withdrew its consent and sought his replacement. At the second CoC meeting held on 21 October 2021, Canara Bank voted for replacement while Karnataka Bank opposed it. The NCLT subsequently appointed Ms. Shirley Mathew as the new RP.
