Vinay Rai Vs Technology Development Board (NCLAT Delhi)
NCLAT Delhi held that provisions of section 98 of the IBC enables Financial Creditor to apply for replacement of Resolution Professional. Notably, filing of application by resolution professional is immaterial.
Facts- This Appeal has been filed by Personal Guarantor of the Corporate Debtor challenging order dated 10.09.2024 passed by National Company Law Tribunal, New Delhi. The Adjudicating Authority while passing order on application under Section 98 of the Insolvency and Bankruptcy Code, 2016 has partly allowed application filed by the Financial Creditor for replacement of Resolution Professional (“RP”) – Mr. Prabhat Ranjan Singh. Prayer (B) made in the application was rejected. The Appellant aggrieved by the said order has come up in this Appeal.
Conclusion- Held that Section 94, sub-section (1) is a provision, which permits a debtor to initiate insolvency resolution process. Thus, the debtor is fully entitled to initiate the insolvency resolution process, either personally or through RP. The Appellant, thus, was fully entitled to initiate the insolvency resolution process through RP, as was done in the present case. But, the stage under Section 98 sub-section (1) is subsequent to appointment of RP under Section 97. Hence, Prabhat Ranjan Singh, was appointed by the Adjudicating Authority by order dated 06.12.2023 as per Section 97 of the IBC. The fact that application was filed by the Appellant through RP under Section 94, does not give any indefensible right to the Appellant to claim that said RP cannot be replaced. Under the scheme of the IBC, replacement of RP is at a different stage, which comes subsequent to appointment of RP under Section 97. Hence, the fact that application was filed by the Appellant through RP is immaterial for the purpose of Section 98(1). Thus held that Adjudicating Authority did not commit any error in allowing the application filed by the Financial Creditor for replacement of the RP.
