Resolution Professional of its own cannot withhold any plan and refuse to submit same before CoC: NCLAT [Read Order]

Resolution Professional - cannot withhold - refuse - submit - CoC - Taxscan

The Principle bench of National Company Law Appellate Tribunal has held that Resolution Professional of its own cannot withhold any plan and refuse to submit the same before the Committee of Creditors (CoC).

The appellant Sharavan Kumar Vishnoi, Resolution Professional challenging the order of National Company Law Tribunal allowing the application filed by one Ms. Upma Jaiswal seeking a direction to the Resolution Professional to place the Resolution Plan submitted by the Appellant before the Committee of Creditors (CoC).

The Counsel for the Appellant submitted that according to the opinion obtained by the Resolution Professional, the plan submitted by Ms. Upma Jaiswal was not eligible as per Section 29A of the Code. It is submitted that due to the said difficulty, the Resolution Professional is unable to place the plan before the CoC for approval.

Shri Ramji Srinivasan, Counsel for the Respondent submitted that the question as to whether the plan submitted by Ms. Upma Jaiswal is to be rejected or approved is a question which need to be decided by the CoC. The Resolution Professional at best can give his opinion with regard to eligibility of the Resolution Applicant whether it conforms to Section 29A and other provisions of the Code or not. It is submitted that the Resolution Professional of its own cannot withhold any plan and refuse to submit the same before the CoC.

The Authority observed that the Resolution Professional is not to take a decision regarding the ineligibility of the Resolution Applicant. It has only to form its opinion because it is the duty of the Resolution Professional to find out as to whether the Resolution Plan is in compliance of the provisions of the Code or not the Resolution Professional can give his opinion with regard to each plan before the CoC and it is for the CoC to take a decision as to whether the plan is to be approved or not. In para 5 of the impugned order, we have noticed that the direction has been issued to the Resolution Professional to place all the Resolution Plans along with his opinion on the contravention or otherwise of the various provisions of law. The aforesaid direction clearly indicates that the Resolution Professional is free to submit his opinion with regard to contravention or otherwise of the various provisions of law. The aforesaid observations take care of the duties and responsibilities of the Resolution Professional. The Resolution Professional can give his opinion with regard to each Resolution Applicants and further steps are to be taken for the CoC as per the direction issued by the Adjudicating Authority.

The Coram of Sri Justice Ashok Bhushan] Chairperson, Dr. Alok Srivastava, Member (Technical) and Shreesha Merla, Member (Technical) while dismissing the appeal has held that “we are of the view that, various issues regarding ineligibility or eligibility need not be gone into in this Appeal. It is only after the CoC’s decision if any question arises regarding eligibility that can be gone into before the Adjudicating Authority in accordance with the law”.

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