NCLT Delhi ruled that a suspended director lacks standing to seek removal of the Resolution Professional post-Committee of Creditors approval. The decision emphasizes respect for approved processes.
NCLT Delhi on the Standing of Suspended Directors
The National Company Law Tribunal (NCLT) in Delhi recently dismissed an application filed by a suspended director seeking the removal of the Resolution Professional (RP). The tribunal asserted that the request was untenable after the Committee of Creditors (CoC) had approved a resolution plan.
In its judgment, the NCLT pointed out that statutory provisions ensure that once a resolution plan is sanctioned, any challenges from suspended directors lose their legitimacy. The tribunal imposed ₹50,000 in costs on the applicant due to non-disclosure of relevant facts and established a precedent regarding locus standi in similar disputes.
"Once the CoC has approved a resolution plan, challenges by suspended directors are unwarranted," remarked the tribunal.This ruling underscores the authority of the CoC in insolvency proceedings.
Legal representatives must be cognizant of the restrictions placed on suspended directors post-CoC approval. This ruling reinforces the finality of decisions taken by creditors during the insolvency process.
Citations
- NCLT Delhi Decision (2026) NCLT Delhi 334
