NCLAT (18.11.2019) in Asset Reconstruction Company (I) Limited (ARCIL) vs. Mr. Koteswara Rao Karuchola Resolution Professional of Viceroy Hotels Ltd. [Company Appeal (AT) (Insolvency) No. 633 of 2018] held that once a decision was taken by the ‘Committee of Creditors’ to call for a meeting for removal of Koteswara Rao Karuchola as an ‘Resolution Professional’, it was improper for him to include Mahal Hotel Private Limited as ‘Financial Creditor’ of the Member of the ‘Committee of Creditors’.
Excerpts of the order;
In the ‘Corporate Insolvency Resolution Process’ against Viceroy Hotels Limited, Appellant – Asset Reconstruction Company (I) Limited (ARCIL) filed application under Section 24(3) of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as the ‘I&B Code’) r/w Rule 11 of the National Company Law Tribunal Rules, 2016 praying to grant stay on the reconstituted ‘Committee of Creditors’ as notified by the ‘Resolution Professional’ vide notice dated 11th July, 2018.
# 9. From the discussions as made above, while we hold that there is a dispute as to whether Mahal Hotel Private Limited comes within the meaning of ‘Financial Creditor’ or not, we hold that after constitution of the ‘Committee of Creditors’, without its permission, the ‘Resolution Professional’ was not competent to entertain more applications after three months to include one or other person as ‘Financial Creditor’.
Further, once a decision was taken by the ‘Committee of Creditors’ to call for a meeting for removal of Mr. Koteswara Rao Karuchola as an ‘Resolution Professional’, it was improper for him to include Mahal Hotel Private Limited as ‘Financial Creditor’ of the Member of the ‘Committee of Creditors’.
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