Tag Archives: CIRP

CIRP, IBC, NCLT

IBBI INSOLVENCY RESOLUTION PROCESS FOR CORPORATE PERSONS) REGULATIONS, 2016 07-08-2020 4A. CHOICE OF AUTHORISED REPRESENTATIVE 16A. AUTHORISED REPRESENTATIVE   39. APPROVAL OF RESOLUTION PLAN.

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IBBI INSOLVENCY RESOLUTION PROCESS FOR CORPORATE PERSONS) REGULATIONS, 2016 07-08-2020

4A. CHOICE OF AUTHORISED REPRESENTATIVE. 
Inserted 4A (2) (aa) having their addresses, as registered with the Board, in the State or Union Territory, as the case may be, which has the highest number of creditors in the class as per their addresses in the records of the corporate debtor: Provided that where such State or Union Territory does not have adequate number of insolvency professionals, the insolvency professionals having addresses in a nearby State or Union Territory, as the case may be, shall be considered;”.
IBBI INSOLVENCY RESOLUTION PROCESS FOR CORPORATE PERSONS) REGULATIONS, 2016 07-08-2020

16A. AUTHORISED REPRESENTATIVE.
substituted, “(9) The authorised representative shall circulate the agenda to creditors in a class, and may seek their preliminary views on any item in the agenda to enable him to effectively participate in the meeting of the committee: Provided that creditors shall have a time window of at least twelve hours to submit their preliminary views, and the said window opens at least twenty-four hours after the authorised representative seeks preliminary views: Provided further that such preliminary views shall not be considered as voting
instructions by the creditors.”.
IBBI INSOLVENCY RESOLUTION PROCESS FOR CORPORATE PERSONS) REGULATIONS, 2016 07-08-2020

39. APPROVAL OF RESOLUTION PLAN.
substituted, “(3) The committee shall- (a) evaluate the resolution plans received under sub-regulation (2) as per evaluation matrix;
(b) record its deliberations on the feasibility and viability of each resolution plan; and (c) vote on all such resolution plans simultaneously. (3A) Where only one resolution plan is put to vote, it shall be considered approved if it receives requisite votes. (3B) Where two or more resolution plans are put to vote simultaneously, the resolution plan, which receives the highest votes, but not less than requisite votes, shall be considered as approved: Provided that where two or more resolution plans receive equal votes, but not less than requisite votes, the committee shall approve any one of them, as per the tie-breaker formula announced before voting: Provided further that where none of the resolution plans receives requisite votes, the committee shall again vote on the resolution plan that received the highest votes, subject to the timelines under the Code.
CIRP, DISCLOSURE, IBC

NCLAT directs SBI to substitute IRP Shailesh Verma who was an Ex-employee of Bank for 39 years before he retired in 2016

NCLAT directs SBI to substitute IRP Shailesh Verma who was an Ex-employee of Bank for 39 years before he retired in 2016

The National Company Law Appellate Tribunal ( NCLAT ) has upheld the order directing State Bank of India ( SBI ) to the substitution of a financial creditor’s ex-employee as the proposed interim resolution professional in a CIRP initiated by the financial creditor, on the ground of apprehension of bias. The appellant, State Bank of India has initiated insolvency proceedings against the Corporate debtor, M/s. Metenere Limited, by moving an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 before the Principal Bench of the National Company Law Tribunal (NCLT).

The National Company Law Appellate Tribunal ( NCLAT ) has upheld the order directing State Bank of India ( SBI ) to the substitution of a financial creditor’s ex-employee as the proposed interim resolution professional in a CIRP initiated by the financial creditor, on the ground of apprehension of bias. The appellant, State Bank of India has initiated insolvency proceedings against the Corporate debtor, M/s. Metenere Limited, by moving an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 before the Principal Bench of the National Company Law Tribunal (NCLT). Before the NCLT, the Corporate debtor objected to the SBI’s proposal to appoint one Shailesh Verma as an Interim Resolution Professional. It added that Verma had worked with the SBI for 39 years before he retired in 2016 and there was thus an apprehension of bias. In view of this submission, NCLT ordered SBI to substitute Verma’s name. Aggrieved by the order, SBI moved an appeal before the NCLAT. SBI contended that Mr. Verma fulfilled the requirements for appointment as Interim Resolution Professional under Insolvency and Bankruptcy Code, 2016 (IBC). It was further contended that IBC and its regulations bore no disqualification to an ex-employee of a Financial Creditor from being appointed as Interim Resolution Professional. SBI further asserted that a Resolution Professional had no adjudicatory power and only acted as a facilitator in the Corporate Insolvency Resolution Process. The three-member bench headed by Acting Chairperson, Justice Bansi Lal Bhat, while referring to the Regulation 3(1) under Insolvency and Bankruptcy Board of India Regulations, 2016 and upholding the order of NCLT observed that the sole question arising for determination in this appeal is whether an ex-employee of the ‘Financial Creditor’ having rendered services in the past, should not be permitted to act as ‘Interim Resolution Professional’ at the instance of such ‘Financial Creditor’, regard being had to the nature of duties to be performed by the ‘Interim Resolution Professional’ and the ‘Resolution Professional’. However, the bench noted the fact that Verma was neither disqualified or ineligible, the Adjudicating Authority was perfectly justified in seeking his substitution to ensure that the corporate insolvency resolution process was conducted in a fair and unbiased manner. “In the given set of circumstances, we are of the considered opinion that the apprehension of bias expressed by the ‘Corporate Debtor’ qua the appointment of Mr. Shailesh Verma as proposed Interim Resolution Professional’ at the instance of the Appellant- ‘Financial Creditor’ cannot be dismissed offhand and the Adjudicating Authority was perfectly justified in seeking substitution of Mr. Shailesh Verma to ensure that the ‘Corporate Insolvency Resolution Process’ was conducted in a fair and unbiased manner,” the bench said while confirming the order of the NCLT. “It goes without saying that the Appellant- ‘Financial Creditor’ should not have been aggrieved of the impugned order as the same did not cause any prejudice to it.”, the NCLAT remarked as it dismissed the appeal.

 

Source taxscan.in