NCLAT Upholds Successor RP's Authority to Convene Creditors Meeting

NCLAT Dismisses Appeals by Removed Resolution Professional

The National Company Law Appellate Tribunal (NCLAT) has dismissed appeals filed by a Resolution Professional (RP) who had been replaced during a corporate insolvency resolution process. The tribunal held that the erstwhile RP possessed no vested rights in the proceedings, and accordingly, lacked locus to challenge subsequent actions taken under the Insolvency and Bankruptcy Code (IBC), 2016.

The dispute arose when the successor RP, appointed after the removal of the original professional, proceeded to convene a meeting of financial creditors to consider resolution plans. The former RP challenged this move before the NCLAT, claiming entitlement to continue in office. However, the tribunal reaffirmed settled jurisprudence that an RP functions as a public servant under regulatory oversight, and their appointment is subject to performance and procedural compliance.

No Resolution Professional acquires any vested right in continuation of his office,

the NCLAT observed, citing Section 27(1) and 29(2) of the IBC.

The tribunal concluded that once the successor RP was validly appointed under Regulation 30 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, they were fully empowered to perform all functions of the RP, including convening meetings of creditors. The appeals were dismissed, reinforcing the statutory framework’s emphasis on time-bound resolution and administrative continuity.

For insolvency practitioners and creditors, this ruling clarifies that challenges by displaced RPs at advanced stages of the process are unlikely to succeed absent demonstrable procedural illegality. Timeliness and adherence to regulatory mandates remain paramount in preserving legitimacy within the IBC ecosystem.