Axis Bank Limited Vs. Mr. Nimit Kalsi - Replacement of RP after 270 days.

NCLT Mumbai (19.03.2020) in Axis Bank Limited Vs. Mr. Nimit Kalsi [M.A. No. 156 of 2020 in C.P. No. 4513 of 2018] held that; 

• The CoC directed the respondent RP to put the agenda for e-voting. However, until the date of filing of present application, the respondent RP has neither circulated minutes of the said meeting nor has conducted any e-voting for the agenda of change of RP. Therefore, 83.51% financial creditors decided suo-moto to file the present application by circulating emails  of the voting in favour of change of RP.

• Therefore, it was by an order dated 29.11.2019 of this Bench that the members of CoC have taken up for discussion the issue regarding removal of the respondent from the post of RP and therefore, the contention of the respondent that the CoC does not exist after expiry of 270 days is irrelevant.

Excerpts of the order;

# 1. This is a Miscellaneous Application filed by Axis Bank Limited, (hereinafter called as “the applicant”) against Mr. Nimit Kalsi (hereinafter called as the “respondent”) who is the Resolution Professional (hereinafter called as the “RP”) of a company named D. Thakkar Constructions Private Limited (hereinafter called as the “corporate debtor”) for his replacement from the said post and instead appoint Mr. Ram Ratan Kanongoo.

# 8. Vide an order dated 29.11.2019 of this tribunal while deciding the MA/3386/2019 which was filed by one of the employees of the corporate debtor, this bench directed the CoC to take call on the entire pending project and to see if the RP was in violation in pursuing the pending projects and the CoC was granted liberty to submit a comprehensive report as to their willingness to continue with the present RP or to seek any alternative. Accordingly, the CoC members decided to replace the present RP with Mr. Ram Ratan Kanoongo having his registration no. IBBI/IPA 001/IPP00070/ 2016-2017/10156. The CoC directed the respondent RP to put the agenda for e-voting. However, until the date of filing of present application, the respondent RP has neither circulated minutes of the said meeting nor has conducted any e-voting for the agenda of change of RP. Therefore, 83.51% financial creditors decided suo-moto to file the present application by circulating emails  of the voting in favour of change of RP.

# 9. Mr. Ram Ratan Kanoongo has furnished his written communication in the prescribed Form AA along with the requisite information to act as RP in replacement of Mr. Nimit Kalsi.

# 13. Mr. Nimit Kalsi states that he was had not been marked in the email approving the change of RP. This action of not marking the RP in the email clearly shows the malafide intent of the Applicant Bank. Also, that the CIRP had expired on 23.12.2019 therefore a COC meeting could not be convened on 31.12.2019 and that it was merely a lenders’ meeting. On the other hand, the CoC under its commercial wisdom has decided to remove him and replace with another RP.

FINDINGS

We have heard both the parties and upon perusal of all the documents submitted by them, it is undisputed that the CoC in its commercial wisdom has unanimously taken decision to replace the current Resolution Professional with new Resolution Professional Mr. Ram Ratan Kanoongo. But there are certain objections raised by the current RP i.e. Mr. Nimit Kalsi, the respondent herein seeking that the change of RP should not be done. He has raised issues which are mentioned above in this order. The main point this Bench finds that the CoC has with a majority of 83.51% has decided to replace the respondent from the post of RP and appoint another RP.

Here, we need to take into consideration the several grave allegations raised by the CoC against the respondent RP. The applicant has submitted that the respondent is found to be in violation of the provisions of the Code and have time and again delayed the proceedings and submitted false documents. The CoC has also alleged that the respondent has always been circulating minutes of the CoC meetings only after 14-15 days which is contrary to the CIRP Regulations and also the respondent was found to the recording minutes of the meetings on his whims as the decisions recorded in the minutes were not voted and were only at the stage of discussion. Also, despite repeated requests, the respondent delayed in submitting his monthly expenditure and was submitted only in the 7th meeting of the CoC. The CoC contended that there were several other occasions where the conduct of the respondent was not satisfactory and even upon several chances being given to him, he continued to perform his duties in a manner violative of provisions of the Code. Therefore, the CoC not being satisfied with the respondent, is not willing to continue with him. Therefore, it was by an order dated 29.11.2019 of this Bench that the members of CoC have taken up for discussion the issue regarding removal of the respondent from the post of RP and therefore, the contention of the respondent that the CoC does not exist after expiry of 270 days is irrelevant. We have heard the respondent on other issues also and given him ample opportunity to satisfy this Bench, but we find the respondent is raising these contentions merely to delay the proceeding and nothing else. The respondent also raised an issue wherein he stated that the CoC has violated orders of this Bench dated 

We are of the opinion that it is the commercial wisdom of the CoC to decide as to who will be the RP and therefore, if it has decided, we are to allow the change of RP. In view of the same, this Miscellaneous Application is allowed and we hereby direct that the present RP Mr. Nimit

Kalsi be replaced with Mr. Ram Ratan Kanoongo.

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