Supreme Court:<\/strong> The 3-Judge Bench of Arun Mishra, B.R. Gavai and Krishna Murari, JJ., set aside the NCLAT\u2019s Order with regard to the appointment of Resolution Professional.<\/p>\n Whether an ex-employee of the \u2018Financial Creditor\u2019 having rendered services in the past, should not be permitted to act as \u2018Interim Resolution Professional\u2019 at the instance of such \u2018Financial Creditor\u2019, regard being had to the nature of duties to be performed by the \u2018Interim Resolution Professional\u2019 and the \u2018Resolution Professional\u2019?<\/p>\n<\/blockquote>\n<\/div>\n<\/div>\n<\/div>\n State Bank of India (Financial Creditor) had filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 with regard to initiation of Corporate Insolvency Resolution Process before the National Company Law Tribunal, Delhi.<\/p>\n NCLT on noting the objection regarding the proposed \u2018Interim Resolution Professional\u2019 \u2014 Shailesh Verma directed the Financial Creditor to perform it\u2019s statutorily mandatory obligation by substituting\u00a0the name of the \u2018Resolution Professional\u2019 to act as an \u2018Interim Resolution Professional\u2019 in place of Shailesh Verma as it was of the view that Shailesh Verma having worked with the State Bank of India for 39 years before his retirement in 2016, there was an apprehension of bias and was unlikely to act fairly\u00a0and could not be expected to act as an Independent Umpire.<\/p>\n Aggrieved with the above position, Financial Creditor preferred the appeal before NCLAT on the ground that the proposed \u2018Interim Resolution Professional\u2019 Shailesh Verma fulfils the requirement for appointment as \u2018Interim Resolution Professional\u2019\/ \u2018Resolution Professional\u2019 under the \u2018I&B Code\u2019 and admittedly bears no disqualification.<\/p>\n NCLAT opined\u00a0that the apprehension of bias expressed by the ‘Corporate Debtor’ qua the appointment of Shailesh Verma as proposed \u2018Interim Resolution Professional\u2019 at the instance of the Appellant — \u2018Financial Creditor\u2019 cannot be dismissed offhand and the Adjudicating Authority was perfectly justified in seeking his substitution.<\/span><\/em><\/p>\n ——————————————————————————-<\/p>\n In the above background, Bench observed at the outset that, NCLAT\u2019s approach was not correct that merely Resolution Professional who remained in the service of SBI and is getting pension was disentitled to be Resolution Professional.<\/p>\n Solicitor General, Tushar Mehta as well as Senior Counsel, Krishnan Venugopal agreed for the appointment of new Resolution Professional by NCLT.<\/p>\n Hence, the Bench held that new Resolution Professional be appointed by the NCLT in accordance with the provisions of the Insolvency and Bankruptcy Code, 2016.<\/p>\n While concluding the order, Court stated that the change of Resolution Professional shall not reflect adversely upon the integrity of Resolution Professional concerned, who has been replaced.<\/p>\n Since the impugned order does not reflect the correct approach, the same shall not be treated as a precedent.[State Bank of India v. Metenere,\u00a0 2020 SCC OnLine SC 837<\/b><\/a>, decided on 19-08-2020]<\/p>\n\n
Question for Consideration<\/span><\/h4>\n<\/blockquote>\n
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NCLT\u2019s position<\/span><\/h4>\n
NCLAT’s position<\/span><\/h4>\n
Supreme Court’s position<\/span><\/h3>\n
\nAlso Read:<\/span><\/h3>\n