Supreme Court of India (19.08.2020) in State Bank of India vs. M/s. Metenere Limited (Civil Appeal No. 2570 of 2020) held that;
We are prima facie satisfied that the approach adopted by the National Company Law Appellate Tribunal, New Delhi (NCLAT) is not correct that merely Resolution Professional who remained in the Service of SBI and is getting pension, was disentitled to be Resolution Professional.
Facts of the case;
1. State Bank of India filed an application under Section 7, as a financial creditor of M/s. Metenere Ltd., the corporate debtor. In the said application SBI proposed an ex-employee to be appointed as the IRP. The Corporate Debtor objected to the appointment of an ex employee as the IRP, and who is currently drawing pension from the SBI. The corporate debtor raised the apprehension of unfairness and bias in dealings by the proposed IRP on the above grounds.
2. The Principal Bench of the Hon’ble NCLT agreeing with claims of the corporate debtor passed an order directing the Financial Creditor to substitute a different IRP since the NCLT was of the view that the IRP could not function fairly and without bias as an independent Umpire.
3. Aggrieved by the Order of the Hon’ble NCLT, the Financial Creditor approached the Hon’ble NCLAT seeking to have the impugned order set aside. However, the Hon’ble NCLAT refused to entertain the Appeal, stating that it does not see any merit in it. The Hon’ble NCLAT while agreeing that there was no disqualification or ineligibility towards the proposed IRP to act as an IRP, yet the NCLAT concluded that apprehensions of bias cannot be dismissed and hence, upheld the order of NCLT.
Excerpts of the order;
Heard learned counsel for the parties at length. We are prima facie satisfied that the approach adopted by the National Company Law Appellate Tribunal, New Delhi (NCLAT) is not correct that merely Resolution Professional who remained in the Service of SBI and is getting pension, was disentitled to be Resolution Professional.
However, since Mr. Tushar Mehta, learned Solicitor General as well as Mr. Krishnan Venugopal, learned senior counsel have agreed for appointment of new Resolution Professional by NCLT, let new Resolution Professional be appointed by the NCLT forthwith within a week in accordance with the provisions of the Insolvency and Bankruptcy Code, 2016.
We may observe that the change of Resolution Professional shall not reflect adversely upon the integrity of concerned Resolution Professional, who
has been replaced.
Since the impugned order does not reflect the correct approach, the same shall not be treated as a precedent.
Accordingly, the civil appeal is disposed of.
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