NCLT Replaces Resolution Professional In Subhash Chandra's Personal Insolvency Case
NCLT Replaces Resolution Professional In Subhash Chandra's Personal Insolvency Case
The National Company Law Tribunal (NCLT), New Delhi bench, comprising Justice Ashok Kumar Bhardwaj and Subrata Kumar Dash, has appointed a new Resolution Professional (RP) to oversee the insolvency proceedings involving Subhash Chandra, the Chairman Emeritus of Zee Entertainment Enterprises Limited (ZEEL).
Chandra, acting as the personal guarantor for specific outstanding debts, expressed significant apprehensions regarding Saraogi's handling of the proceedings. Allegations emerged regarding an unsanctioned meeting between Chandra and Saraogi at the Lodhi Hotel in Delhi, where Saraogi was accompanied by a legal representative. During this encounter, Chandra contended that Saraogi hinted at potential bankruptcy repercussions, raising doubts about Saraogi's understanding of his duties within the insolvency framework.
Despite the RP and his counsel denying the allegations, the NCLT confirmed that both the RP and his counsel indeed met with the Personal Guarantor (PG). It emphasized that under the Insolvency and Bankruptcy Code (IBC) and associated regulations, there was no provision permitting the RP to be accompanied by a lawyer while performing their duties, especially during the phase when the PG was expected to formulate a repayment plan.
Additionally, the NCLT pointed out that the RP's conduct, including conducting meetings at a luxurious hotel, appeared incongruent with their designated role, which primarily entails facilitating the insolvency resolution process.
The NCLT clarified that the RP's specific duty is to provide guidance to the PG, while the formulation of the repayment plan falls under the debtor's purview. Any delegation of authority for the RP to act on behalf of the debtor must be explicitly specified. Dismissing arguments to the contrary, the NCLT asserted that such authorization would have been necessary for the RP to involve a lawyer in the proceedings.
As a result, the NCLT appointed Nandan Sharma as the new RP and deemed it appropriate to replace the former RP, Raj Kamal Saraogi.
