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2023 (2) TMI 376 - AT - Insolvency and BankruptcyRejection of application for replacement of Resolution Professional with one Mr. Sapan Mohan Garg though approved by the Committee of Creditors (CoC) by a voting share of 76.69% - Whether the CoC in passing a resolution to replace the Resolution Professional in the facts of the present case has committed any breach of the IBC and regulations framed thereunder? - HELD THAT:- The statutory provisions and related Regulations framed thereunder having laid down in unambiguous terms the manner and procedure for replacement of the Resolution Professional and the CoC having acted in conformity with those provisions, the CoC was well within its rights to replace the Resolution Professional with a new one of its own choice. There is no disagreement that the replacement of Resolution Professional is complete when the required decision is taken by the CoC in its meeting with requisite majority. Interference would be warranted only if the decision of the CoC was suffering from material irregularities or dehors the statutory provisions and the rules framed thereunder which is not the case - there was no violation of the statutory provisions in bringing about the replacement of the Resolution Professional by the CoC and all procedural compliances having been met, there is no room to hold the process to have been vitiated in any manner. Since the requirements laid down by IBC have been met, the Adjudicating Authority is duty bound to abide by the discipline of the statutory provisions. Whether the decision of the CoC to replace the Resolution Professional being the outcome of the wisdom of the CoC, is not subject to judicial review? - HELD THAT:- CoC had deliberated on the performance of the Resolution Professional before considering to move the resolution and putting the same to vote. Further, since the decision of the CoC to replace the Resolution Professional was taken by exercising of voting rights assigned to the creditors, it was not necessary for Adjudicating Authority to look into reasons or decide whether there were sufficient reasons for change of the Resolution Professional as the Adjudicating Authority cannot don the mantle of a supervising authority. More importantly, the relevant section 27 does not prescribe the need to assess the performance of the Resolution Professional while seeking his replacement - The statutory framework of the IBC also does not mandate that the CoC is required to adduce reasons for replacing the Resolution Professional - in the present case too, the Appellant while filing the application for replacement of the Resolution Professional has desisted from making any adverse observations on his performance and thus cannot be held to have acted in any manner contrary to law. Rejection of application of the Appellant to replace the Resolution Professional by advising the CoC to continue with the same Resolution Professional - HELD THAT:- It is well settled that the IBC does not postulate jurisdiction for the Adjudicating Authority to undertake scrutiny of the justness of the majority opinion expressed by financial creditors by way of voting. The insolvency regime introduced under the IBC has placed fetters on the power of interference by the Adjudicating Authority - the Adjudicating Authority being a creature of IBC Code and the statutory provisions therein not having invested jurisdiction and authority upon it to review the decision exercised by the CoC to replace the Resolution Professional, the rejection of the application for the replacement of the Resolution Professional is a transgression of jurisdiction and therefore deserves to be set aside. The replacement of Mr. Suresh Kumar Jain is allowed by appointing Mr. Sapan Mohan Garg as Resolution Professional, who will act in accordance with law - the impugned order is set aside - appeal allowed.
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