CoC has absolute power regarding selection of IRP, RP: NCLT–Financial Express

Clipped from: https://www.financialexpress.com

Khandelwal had challenged the decision of the CoC rejecting his appointment as RP in the matter. KSK Mahanadi Power’s CoC voted 89.6% in favour of Sumit Binani’s appointment as the RP to manage the resolution process.

An interim resolution professional (IRP) cannot seek natural progression to a resolution professional (RP) in an insolvency matter; the prerogative to continue with the IRP as RP or to replace the IRP with another RP lies with the committee of creditors (CoC), the National Company Law Tribunal (NCLT) has observed.

“The power to replace an RP is solely and absolutely vested with the CoC,” the Hyderabad bench of the NCLT has said, rejecting an application from Mahender Kumar Khandelwal, who was appointed by the CoC as the IRP to manage the affairs of insolvent KSK Mahandai Power’s resolution till an RP was appointed.

Khandelwal had challenged the decision of the CoC rejecting his appointment as RP in the matter. KSK Mahanadi Power’s CoC voted 89.6% in favour of Sumit Binani’s appointment as the RP to manage the resolution process.

“The adjudicating authority does not find any infirmity with the decision,” the NCLT said.

On Power Finance Corporation’s application, the corporate insolvency resolution process (CIRP) against KSK Mahandai Power was admitted and Khandelwal was appointed the IRP on October 3.

Kahndelwal challenged the decision on the ground that it would not only cause a loss to his reputation, but will also delay the resolution process for KSK Mahanadi as the new RP would take time to get acquainted with the affairs of the company.

The CoC, however, said it was the prerogative of the CoC to change or not to change. A resolution on this can be passed requiring only 66% of the CoC members’ vote in favour.

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