NCLAT held that once the Erstwhile Resolution Professional was replaced, they lacked standing to challenge decisions made by the New Resolution Professional during the CIRP.
The National Company Law Appellate Tribunal (NCLAT), Principal Bench comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra & Arun Baroka (Technical Members) was hearing an Appelaof Erthwhile resolution Professional and held that once the Erstwhile Resolution Professional was replaced by the New Resolution Professional, who continued with the Corporate Insolvency Resolution Process (CIRP), the former had no grounds to contest the latter's decisions.
The National Company Law Appellate Tribunal (NCLAT) heard Shri Partha Sarathy Sarkar, who appeared in person as the Appellant in this case. The appeal was lodged against the order dated 15th January 2024, issued by the Adjudicating Authority in response to I.A. No.463/JPR/2023.
Initially, the Appellant, acting as the Erstwhile Resolution Professional, filed I.A. No.436/JPR/2023 against UTI officials, seeking to summon R-3 and procure documents. Subsequently, the Appellant was replaced by another Resolution Professional, who informed the Adjudicating Authority of their decision not to pursue I.A. No.463/JPR/2023 any further. Consequently, the Adjudicating Authority disposed of the application as infructuous.
Challenging this order, the Erstwhile Resolution Professional, now the Appellant, argued that the application should have been deliberated on its merits.
However, the NCLAT reasoned that once the Erstwhile Resolution Professional was replaced by the New Resolution Professional, who continued with the Corporate Insolvency Resolution Process (CIRP), the former had no grounds to contest the latter's decisions. Therefore, the NCLAT concluded that the impugned order, disposing of the application as infructuous, should not be interfered with at the Appellant's behest.
Furthermore, the Appellant contended that the Adjudicating Authority should have examined the facts of the application. Nevertheless, the NCLAT disagreed, stating that since the Adjudicating Authority had already disposed of the application after considering the New Resolution Professional's statement, delving into the application's facts was unnecessary. Consequently, the NCLAT found the Appellant's arguments lacking in substance.
Consequently, the NCLAT dismissed the appeal.
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