NCLAT has dismissed appeals by a removed resolution professional (RP), affirming that successor RPs have full authority to convene creditors’ meetings under the Insolvency and Bankruptcy Code, 2016, without vested rights existing in the predecessor.
NCLAT Dismisses RP’s Appeal, Upholds Successor’s Authority
The National Company Law Appellate Tribunal (NCLAT) has dismissed appeals filed by a removed Resolution Professional (RP) challenging the authority of the successor RP to convene a meeting of creditors under the Insolvency and Bankruptcy Code, 2016 (IBC). The ruling clarifies the transitional powers in RP appointments and reinforces the statutory primacy of the Committee of Creditors (CoC).
The former RP, appointed during the initial phase of the corporate insolvency resolution process (CIRP), was replaced following a CoC resolution under Regulation 30 of the CIRP Regulations. He contended that he retained authority to conduct meetings already notified. NCLAT rejected the claim, observing that the RP acts as a statutory fiduciary and holds no vested rights. Upon replacement, all powers vest in the successor RP under Regulation 33.
The Resolution Professional is not an independent adjudicator but a facilitator accountable to the CoC; his authority ceases upon replacement unless extended by regulation.
The Tribunal emphasized the time-bound nature of CIRP and held that continuity in process must not be derailed by personal claims of statutory office. This decision strengthens procedural certainty in CIRP transitions and reminds legal teams to ensure immediate transfer of records and access upon RP change. Practitioners must align internal compliance with the CoC’s binding decisions and update stakeholders promptly upon any change in RP.
Citations
- Insolvency and Bankruptcy Code, 2016
- CIRP Regulations, Regulations 30, 33
