As per our reports, in an insolvency proceedings, the right to continue with the IRP as a Resolution Professional or to replace the IRP with some other RP is with the Committee of Creditors (CoC), as observed by the National Company Law Tribunal.
The power to replace an RP is solely & absolutely vested with the CoC, as per the Hyderabad Bench of the NCLT, which rejected an application from RP Mahender Kumar Khandelwal, who was appointed by the CoC as the IRP to manage the affairs of insolvent power finance company KSK Mahandai Power’s resolution until the appointment of an RP. RP Khandelwal had challenged the decision of the CoC by rejecting his appointment as a Resolution Professional.
After the rejection of RP Khandelwal, Sumit Binani was appointed as a Resolution Professional. KSK Mahanadi Power’s CoC voted with 89.6% in favour of Sumit Binani’s appointment as a RP to look after the resolution process. The Corporate Insolvency Resolution Process (CIRP) against KSK Mahandai Power was admitted before the NCLT, Hyderabad Bench & Mahender Kumar Khandelwal was appointed as the IRP on October 3, 2019. Khandelwal challenged the decision on the ground that it would not only cause a loss to his reputation, but will also cause delay to the resolution process for KSK Mahanadi as Sumit Binani, the new RP would take time to get to know about the affairs of the company.
It can be concluded that the absolute decision lies with the CoC to change or not to change the RP. A resolution on this can be passed by getting on 66% votes of the members of CoC in favour of KSK Mahanadi Power.
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