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2022 (6) TMI 588 - Tri - Insolvency and BankruptcyDissolution of Committee of Creditors consisting of the Respondent No. 1, who is a related party - Validity of initiated CIRP proceedings - removal of Respondent No. 2 from the position of RP - imposition of cost for fraudulent and malicious on Respondent No. 1 and Respondent No. 2 as per the provisions of Section 65 and 70(2) - whether 1st Respondent is a related party to the Corporate Debtor? - HELD THAT:- The 1st Respondent, sole member of the CoC of the Corporate Debtor and Ms. Deepthi Vinod Bansal, who is 49% shareholder of the Corporate Debtor were uncle and niece. Thus, 1st Respondent and sole member of the CoC of the Corporate Debtor fall under the expression of 'related party of the corporate debtor' in 1st proviso of Section 21(2) and the 1st Respondent herein is prevented to be a part of the CoC. Whether the Resolution Professional has done his due diligence in constituting the CoC? - HELD THAT:- It is the duty of the Resolution Professional to collect and peruse the information regarding Corporate Debtor and claimants before constituting CoC - Clause 6 and 7 of the declaration part of the form clearly require the declaration from the Financial Creditor who submitted the claim before RP that it is not covered under section 5(24) and it is the due diligence of the RP to confirm the said declaration. The CoC is constituted with the Financial Creditor who is a related party to the Corporate Debtor and the survival of the said CoC is restricted by the express provision of the code. In addition, it appears that there is negligence on the part of Resolution Professional in identifying the related party in the CoC. The 2nd Respondent, Resolution Professional of the Corporate Debtor is hereby directed to remove the 1st Respondent herein from the Committee of Creditors (CoC) of the Corporate Debtor viz. Mega Foods Products Madras Pvt. Ltd. as the 1st Respondent is related party to the Corporate Debtor - Application allowed in part.
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