NCLAT directs appointment of IRP working as Liquidator of Principal Borrower

NCLAT directs appointment of IRP working as Liquidator of Principal Borrower

The Interim Resolution Professional to be IRP/RP of the Corporate Guarantor

The National Company Law Appellate Tribunal (NCLAT) directed the National Company Law Tribunal (NCLT) Hyderabad bench to appoint an Interim Resolution Professional (IRP) to work as Liquidator of Principal Borrower. He would be the Interim Resolution Professional (IRP)/ Resolution Professional (RP) of the Corporate Guarantor on the application made by the Appellant – Bank.

The Principal Bench of the NCLAT comprising of Justice A.I.S. Cheema and V.P. Singh dealt with this matter titled State Bank of India v M/s Athena Energy Ventures Pvt Ltd.

The factual background of this matter is that the NCLAT through its order dated 24 November 2020 had held that there could be simultaneous Corporate Insolvency Resolution Processes (CIRPs) against the Principal Borrower as well as the Corporate Debtor. The NCLT as per that order appointed the same IRP/RP i.e. C. Bala Mouli in the proceeding against Athena Energy Ventures Pvt Ltd – Corporate Guarantor, who has been appointed in the proceeding against M/s Athena Chhattisgarh Power Ltd – Principal Borrower. However, C. Bala Mouli filed an application before the NCLT stating that he would not be able to function as a Resolution Professional because of his old age.

In the meantime, the Principle Borrower went into liquidation and appointed Kumar Raajan as a Liquidator as per the Committee of Creditors (CoC) meeting dated 24 December 2020. Therefore, the Appellant – State Bank of India, submitted that in such a situation C. Bala Mouli cannot be the Resolution Professional for M/s Athena Energy Ventures Pvt Ltd – Corporate Guarantor who is the Respondent and M/s Athena Chhattisgarh Power Ltd – Principal Borrower. The Respondent – Corporate Guarantor did not raise any objection with regard to the appointment of the RP appointed as Liquidator of M/s Athena Chhattisgarh Power Ltd – the Principal Borrower to be the RP of the Respondent itself.

The bench stated that the object of the direction to request the NCLT to appoint the same IRP/RP as has been appointed in the CIRP proceeding against M/s Athena Chhattisgarh Power Ltd – Principal Borrower, was to ensure that there should be the convenience of making corresponding revisions when a particular claim amount is recovered. The bench further observed that the Resolution Professional who is working as a Liquidator of the Principal Borrower should be appointed as Resolution Professional for the Corporate Guarantor when it has been stated that the Principal Borrower is under Liquidation and the CIRP against the Corporate Guarantor is pending.

The Application was disposed of with a direction to the NCLT to immediately pass orders on the application filed by IRP – C. Bala Mouli and may appoint IRP working as Liquidator of M/s Athena Chhattisgarh Power Ltd – Principal Borrower to be Interim Resolution Professional (IRP)/Resolution Professional (RP) of M/s Athena Energy Ventures Pvt Ltd – Corporate Guarantor.