NCLT Endorses Dr. Subhash Chandra's Motion To Substitute Insolvency RP

The National Company Law Tribunal (NCLT), New Delhi, has directed the replacement of the Resolution Professional (RP) in the proceedings of Dr. Subhash Chandra, founder of Zee TV.

Dr. Chandra was represented by Trust Legal through Partners, Ritwika Nanda and Petal Chandhok and Associate, Shruti Gupta. The arguments on behalf of Dr. Chandra were led by Arguing Counsel Vaibhav Gaggar. Dr. Chandra was also personally present during the course of the entire proceedings.

Indiabulls Housing Finance Limited was represented by Chambers of Jaitley and Bakshi.

The order has been passed in an Application filed by Dr. Chandra before the NCLT seeking the replacement of the Resolution Professional appointed by the NCLT vide the order dated 22 April, 2024. [Indiabulls Housing Finance Ltd. Vs Dr. Subhash Chandra [CP(IB)97/2022]

It was urged by the Personal Guarantor that he is unable to repose faith in the competence of the Resolution Professional in an issue running into thousands of crores.

It was also cited that the Resolution Professional ought to be in a position to guide and aid the Personal Guarantor in the process and not be a mere post office. It was also urged that the Resolution Professional already being in an adversarial position and is unable to understand his fundamental role and responsibility.

During the course of the proceedings, the Tribunal was also apprised that the first meeting was called by Resolution Professional at Lodhi Hotel and the Resolution Professional was accompanied by a lawyer, which was admitted by the Resolution Professional.

After hearing the parties, the Tribunal held that while discharging functions in terms of provisions of Section 105 of IBC, 2016 read with Reg. 17, the role of the Resolution Professional is only to extend the service as a consultant to the PG while in terms of Section 105 read with Reg. 17 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for PersonalGuarantor to Corporate Debtors), Regulations 2019, the roles assigned to Resolution Professional to himself is that of the consultant and repayment plan has to be prepared only by the debtor, it is difficult for the Tribunal to appreciate that the Resolution professional whose presence itself is recognised and acknowledged as that of a consultant can have the services of another lawyer, while discharging the function as a consultant only.

In view of the aforementioned, the Tribunal directed the change of the Resolution Professional and further directed that the Resolution Professional would discharge his functions in terms of the order dated 22 April, 2024 afresh.