Saturday 5 December 2020

Anshuman Chaturvedi, RP vs. IDBI Bank Ltd & ors - Appointment of Liquidator

NCLT Ahmedabad (09.02.2018) in Anshuman Chaturvedi, RP vs. IDBI Bank Ltd & ors [IA 45 of 2018 in C.P. (I.B) No. 19/7/NCLT/AHM/2017 ] held that; In view of section 34(4) of IB Code resolution professional can be replaced only in case resolution plan submitted by the Resolution professional under section 30 of IB Code was rejected for the reason of non-compliance of requirements of sub section 2 of section 30 or if the Board recommends replacement of RP to the Adjudicating Authority.

Author’s comments; Provisions for appointment of Liquidator under section 34 stands amended w.e.f. 06.06.2018, to read as under;-

# Section 34. Appointment of liquidator and fee to be paid. -

(1) Where the Adjudicating Authority passes an order for liquidation of the corporate debtor under section 33, the resolution professional appointed for the corporate insolvency resolution process under Chapter II shall, subject to submission of a written consent by the resolution professional to the Adjudicatory Authority in specified form, shall act as the liquidator for the purposes of liquidation unless replaced by the Adjudicating Authority under sub-section (4).

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(4) The Adjudicating Authority shall by order replace the resolution professional, if–

  • (a) the resolution plan submitted by the resolution professional under section 30 was rejected for failure to meet the requirements mentioned in sub-section (2) of section 30; or

  • (b) the Board recommends the replacement of a resolution professional to the Adjudicating Authority for reasons to be recorded 1[in writing; or]

  • (c) the resolution professional fails to submit written consent under sub-section (1).


Excerpts of the order;

This application is filed by resolution professional seeking order of liquidation under section 33(2) of the Code. 

This authority on the basis of petition filed by IDBI Bank Ltd. (Financial Creditor) under section 7 of the Code, commenced the CIRP by appointing IRP. 


COC in its third (adjourned) meeting held on 10.01.2018 resolved that it is not possible to have a resolution plan in respect of corporate debtor and as the CIRP period is over resolved to go for liquidation and further resolved to replace the Resolution professional Mr. Anshuman Chaturvedi and appoint Mr. Abhishek Nagori as liquidator. 


Further in the third meeting of COC held on 05.01.2018 the resolution Professional Mr. Anshuman Chaturvedi submitted his unwillingness to be appointed as liquidator in case of Corporate Debtor. 


Further the period of 180 days provided for arriving at resolution plan has also been over. This authority vide its order dated 22.12.2017 rejected the request for extension of time vide IA 393/2017 filed by RP


Considering all the above said facts this Adjudicating Authority is of a considered view that there shall be an order of liquidation in respect of the Corporate Debtor Asian Natural Resources (India) Ltd. 


Coming to the replacement of RP Mr. Anshuman Chaturvedi the COC recommended the name of Mr. Abhishek Nagori on the ground that Mr. Anshuman Chaturvedi is unwilling to continue as Liquidator. 


In view of section 34(4) of IB Code resolution professional can be replaced only in case resolution plan submitted by the Resolution professional under section 30 of IB Code was rejected for the reason of non-compliance of requirements of sub section 2 of section 30 or if the Board recommends replacement of RP to the Adjudicating Authority. 


No doubt section 34(4)(a) and (b) of the IB Code visualises two situations 

  • (1) That arise out of rejection of Resolution plan 

  • (2) recommendation of the IBBI for replacement of Resolution professional. 


In the case on hand the resolution professional is not willing to continue as liquidator. In this situation the IBBI can recommend the name of the liquidator under section 34(4)(b) of IB Code. 

IBBI by its letter dated 01.01.2018 addressed to the Hon'ble president of NCLT, New Delhi approved a panel of Insolvency Professionals for appointment as IRP or Liquidator.  The Registrar of NCLT vide its letter dated 03.01.2018 asked this Bench to follow the panel drawn by IBBI to appoint IRP/ Liquidator. 


Hence, in view of the above said letters and in view of section 34 (4)(b) of IB Code this Authority hereby appoint Mr. Abhishek Nagori whose name is there in the list of panel approved by IBBI for Ahmedabad Bench. 


This Adjudicating Authority hereby appoint Mr. Abhishek Nagori as 'Liquidator under section 34(7) of the Code. The Liquidator shall send an intimation to the Registrar of Companies with which the Corporate Debtor is registered


It appears from record that Mr. Abhishek Nagori already gave his written communication in Form-2 before the COC, a copy which is enclosed with the application. 


Registry is directed to give intimation to the Liquidator about his appointment and to file Original Form-2 before the Registry of this Authority. 


The liquidator is directed to issue a public announcement stating that the corporate debtor is in liquidation. The liquidator shall act as per section 35 of Insolvency and Bankruptcy Code, 2016, subject to directions of this Authority. 


This application is disposed of accordingly.


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Disclaimer:

The sole purpose of this post is to create awareness on the "IBC - Case Law" and to provide synopsis of the concerned case law, must not be used as a guide for taking or recommending any action or decision. A reader must refer to the full citation of the order & do one's own research and seek professional advice if he intends to take any action or decision in the matters covered in this post.