Assistant Commissioner, CGST & CX, Joka Division Vs M/s. Environ Energy Corporation India Private Limited, - We find no merit in the application made by the GST department on both counts (i.e.) extraordinary delay in submitting the claim before the liquidator which is 664 days from the date the claim ought to have been filed and delay in filing this appeal before the Adjudicating Authority which is nearly four months beyond the statutory time limit, prescribed under Section 42 of IBC.

  NCLT Kolkata (31.05.2005) in Assistant Commissioner, CGST & CX, Joka Division, Kolkata South Commissionerate Vs M/s. Environ Energy Corporation India Private Limited, [I.A. (IB) No. 1472/KB/ 2023 In CP (IB) No. 1106/KB/2019] held that;

• We find no merit in the application made by the GST department on both counts (i.e.) extraordinary delay in submitting the claim before the liquidator which is 664 days from the date the claim ought to have been filed and delay in filing this appeal before the Adjudicating Authority which is nearly four months beyond the statutory time limit, prescribed under Section 42 of IBC.

Excerpts of the order;

# 3. This application has been preferred under Section 42 of the Insolvency and Bankruptcy Code, 2016 (IBC) by the Assistant Commissioner, CGST on Central Excise, Joka Division, Kolkata South Commissionerate, (hereinafter referred to as ‘Applicant / GST Department’) against M/s. Envaron Energy Corporation India Private Limited (in Liquidation) represented by its Official Liquidator Mr. Rakesh Kumar Agarwal (hereinafterreferred to as Corporate Debtor/Respondent).

# 4. Under Section 42 of the IBC, the Applicant has sought the following relief:

a) To direct the Official Liquidator to accept and consider the claim of the applicant;

b) Delay in preferring the instant applicant (if any), be condoned by this Tribunal for the interest of justice;

c) Delay of 664 days to prefer the claim before the Official Liquidator be condoned by this Tribunal for the interest of justice;

d) Accept the claim of the Applicant as mentioned in the Order-in-Originals stated in paragraph no. 2 hereinabove;

e) Such other and further order may be deemed fit and proper.

# 5. Factual Matrix:

5.1. The GST department had issued show cause notice and consequent orders in original Demanding Service Tax on the Corporate Debtor through 3 separate orders annexed as Annexures A1, A2 and A3 to the application.

5.2. The order in original dated 10.03.2017, annexed as Annexure A1 demanded a sum of Rs.5,11,56,977/- along with interest and penalty of Rs.5,11,56,977/-.

5.3. The Order in original dated 31.05.2018 issued by the GST Department, annexed as Annexure A2, demanded a sum of Rs.94,66,590/- along with interest and penalty of Rs.9,46,659/-.

5.4. The Order in original dated 03.05.2019 which is annexed as Annexure A3 has demanded a sum of Rs.1,42,49,024/- along with interest and penalty of Rs.14,24,902/-, apart from late fee of Rs.59,100/-. All these orders were served on the Corporate Debtor , claims the Applicant.

5.5. Subsequently, a show cause notice was served on the Corporate Debtor dated 28.06.2019 which is annexed as Annexure A4 demanding Rs.12,22,36,041/- along with interest, apart from proposing to levy a penalty of Rs. 22,22,36,041/-

5.6. In response to the said show cause notice, the Corporate Debtor through its Liquidator had replied by submitting the order of NCLT, Kolkata Bench 19th May of 2021 informing about the liquidation order passed and the same was attached as the response to the show cause notice dated 28.06.2019. 

5.7. The GST department claims that this response to the show cause notice was received only on 16.03.2023 and consequently, they lodged their claim in the prescribed Form B of IBBI (Liquidation Process Regulations, 2016) on 13.04.2023.

5.8. On 24.04.2023, the Applicant GST Department , received an e-mail from the liquidator of the Corporate Debtor informing that the Liquidation Process of the respondent company commenced on 19.05.2021 and the last date for filing the claim as per the public announcement made is 18th June 2021. The Official Liquidator, therefore, declined to admit the claim made by the Applicant on 13th April 2023, which is after a delay of 664 days. Consequent, to this e-mail received from the Liquidator on 24.04.2023 this application has been filed by the GST, Department on 30.08.2023 seeking the reliefs mentioned above.

# 6. Applicant’s Submission: -

6.1. The Learned Counsel for the appellant submits that they became aware of the liquidation of the company only on 16.03.2023 and immediately on becoming aware they filed the claim with the liquidator on 13.04.2023 in Form B as prescribed under the (IBBI), Liquidation Process Regulations, which is well within 30 days from the date of coming to the

know of the Liquidation. 

6.2. It is submitted that they were never informed about the commencement of Liquidation by the Corporate Debtor; therefore, this has resulted in a delay of 664 days to prefer the claim before the Liquidator

6.3. Considering that the revenue of more than 60 crores of rupees due to the National Exchequer is involved in this case, the delay in preferring this claim may be condoned under the above facts and circumstances and the Liquidator may be directed to admit the claim in the interest of revenue/nation.

# 7. Respondent’s Submission per contra: -

7.1. Learned Counsel for the Liquidator claims that the advertisement for inviting claim as per IBBI Liquidation Process Regulation, 2016 was made in Form B of Schedule II within 5 days from the date of order of liquidation by NCLT on 19.05.2021. The public announcement was made in two large English papers as well as in the vernacular newspapers. The public announcement called upon all the stakeholders to submit their claims within 30 days from the date of advertisement.

7.2. As per Regulation 17 of the IBBI (Liquidation process) Regulation an Operational Creditor like GST Department will have to submit proof of the claim to the liquidator in the prescribed form with relevant documents to prove their claim.

7.3. The Regulation also provides that in case the OperationalCreditor has submitted its claim during the CIR process the same shall be deemed to submitted under Section 38 of IBC which is the section that governs the submission of claims before the liquidator. Having not done so the Operational Creditor/GST department has lost the opportunity to submit their claim at this stage when liquidation is at the far end of the process.

# 8. Analysis and Findings:

8.1. As per the pleading and records placed in the application, we find that the Orders passed by the GST department are with reference to the demands made under the erstwhile service tax regime.

8.2. As per Section 87 of the Finance Act, 1994 (which govern the Levy and Collection of Service Tax) for Recovery of any amount due to the Central Government there is a recovery mechanism which includes attachment of the Bank Accounts/ moveable and immoveable properties etc. and the same can be done and such attached properties can be sold and dues to the Government could be recovered.

8.3. In the given case nothing has been placed on record by the GST department that such recovery proceedings have been initiated for the recovery of such huge sums to the exchequer. In the absence of any such action placed on record, we will have to infer that no such action has been taken by the GST department. Having failed to do so they should have at least submitted their claim before the Resolution Professional during CIRP of the Corporate Debtor. Nothing has been placed on record to suggest that the GST department has submitted their claims during the CIR process with the Resolution Professional.

8.4. Thus, they failed to take any action even during the CIR process. GST Department cannot claim ignorance of the commencement of CIRP of its own assessee, from whom large sums are due when such proceedings are made public at large by way of public announcement in newspapers apart from the announcement in the Insolvency Bankruptcy Board of India, website.

8.5. The regulations made under IBBI do not provide for individual communication to creditors about the CIRP process or Liquidation Process as the same would delay the entire time-bound CIRP/Liquidation process. That is why we are of the view that the law has prescribed for public announcements in large newspapers.

8.6. Therefore, the claim of the department that they were not aware of the CIRP proceedings/liquidation proceedings cannot be accepted particularly when the department interacts with the assessee on a monthly basis through several Returns.

8.7. In this case, they claim that they became aware when they received the response of the Corporate Debtor against the show cause notice dated 28.06.2019. The show cause notice dated 28.06.2019 would have been served within 10 days from the date of notice. Assuming that this was served during 1st week of July 2019, the response from the Corporate Debtor would have been received within 30 days from the receipt of show cause notice, as show cause notice mandates reply from the Corporate Debtor within 30 days from the receipt of show cause notice. If no such reply was received, GST Department can pass an ex-parte order after granting a hearing. Nothing of that sort has been done as per the records placed.

8.8. It is not the claim of the department that the Applicant received the notice dated 28.06.2019 only in 2023, and consequently they received the response from the Applicant only 16.03.2023. We see only delays and latches writ large on the part of the GST department.

8.9. The rejection letter from the liquidator through email was received on 24.04.2023, whereas this appeal has been preferred before NCLT on 30.08.2023. As per Section 42 of the IBC, the stakeholders will have to file an appeal to the Adjudicating Authority against the decision of the Liquidator within 14 days of the receipt of such decision. In this case, they claim to have received the rejection on 24.04.2023. In that case statutory time limit for preferring appeal before this Adjudicating Authority ends on 8th May 2023.

8.10. Even in preferring an appeal they have taken nearly another four months beyond the statutory limit prescribed in IBC and filed it only on 30.08.2023. This clearly demonstrates the lackadaisical approach of the GST department in pursuing such large demands from the Corporate Debtor.

8.11. In view of the above, we find no merit in the application made by the GST department on both counts (i.e.) extraordinary delay in submitting the claim before the liquidator which is 664 days from the date the claim ought to have been filed and delay in filing this appeal before the Adjudicating Authority which is nearly four months beyond the statutory time limit, prescribed under Section 42 of IBC.

8.12. The Legal Positions:

a. In The Deputy Commissioner Commercial Taxes (Audit), Raichur -Vs-Surana Industries Ltd. (In Liquidation) & Anr. in Company Appeal (AT) (Insolvency) No. 1525 of 2019 dated 07.02.2020, wherein the Hon'ble NCLAT has dismissed the application filed by the Applicant in relation to the Appeal against the order of the Liquidator and also held that liquidation process is a time bound process, and the Liquidator has to conclude his proceedings within one year. (Emphasis supplied)

b. Further, we are fortified by the decision of a Coordinate Bench. NCLT, Chennai Bench in the matter of Employees State Insurance Corporation vs. Chinnam Poorna Chandra Rao reported in [2020] ibclaw.in 180 NCLAT where it was held that the extraordinary delay […] in submission of claim by applicant, is devoid of merits. Further in interest of Justice also we could not condone the delay as sought for. If such extraordinary delay is condoned, it shall defeat the very purpose of the IBC, 2016. (Emphasis supplied)

# 9. In the view foregoing, we dismiss this application being I.A. (IB) No.1472/KB/2023 in Company Petition (IB) No. 1106/KB/2019 accordingly.

# 10. No cost upon the applicant herein.

\

# 11. Certified copies of the order, if applied for with the Registry of this Adjudicating Authority, be supplied to the parties upon compliance with all requisite formalities.

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P.G. Sales Corporation v Shri Kiran Shah, Liquidator - When the vacant possession was given to the applicant, the liquidator is no more responsible in the matter. So also, this Tribunal is not having jurisdiction to entertain the applications which fall outside the ambit of liquidation process.

NCLT Ahd-2 (17.01.2024) in P.G. Sales Corporation v Shri Kiran Shah, Liquidator [IA No. 752 of 2023 IN C.P. (IB) No. 77 of 2018 ] held that;

• When the vacant possession was given to the applicant, the liquidator is no more responsible in the matter. So also, this Tribunal is not having jurisdiction to entertain the applications which fall outside the ambit of liquidation process.

Excerpts of the order;

# 1. An application has been filed under Section 60(5)(c) and other applicable provisions of the IBC 2016, by the successful auction purchaser (P G Sales Corporation) of certain assets from the liquidator of the Corporate Debtor which is presently under liquidation vide orders of this Tribunal dated 23.09.2019. The Respondent No.1 is Mr Laxmanbhai Mohanbhai Vegad, the security guard who is stated to be staying at the premises of the corporate debtor. The Respondent No. 2 & 3 are the Police Inspector of Bortalav Police Station, Bhavnagar and Shri Kiran Shah, the liquidator of the corporate debtor respectively.

# 2. It is submitted by applicant that the Respondent No.3 had sold the assets of the corporate debtor from time to time and pursuant to an e-auction dated 12.03.2023, showed willingness to buy the assets of the property of certain land and building on Lease Rights of Land (2526.88 sq metres with Industrial Shed admeasuring 839.38 sq meters) situated at Plot No.36, C.S No.6095, Kumbharwada, Madhia Road, Bhavnagar. The Reserve Price was Rs.166.93/- lakhs with EMD of Rs.16.69/- lakhs. Applicant was the successful bidder under e-auction held on 13.04.2023 for sale of the assets on “as is where is basis” and “no recourse basis” as per the terms and conditions of the e-auction process document. The assets were purchased at a cost of Rs.1,73,93,000/- plus GST and a sale confirmation letter dated 17.05.2023 was given by the respondent to the applicant. Vide letter dated 21.06.2023 the Respondent No.3 also handed over the vacant and peaceful possession of land and industrial sheds (property) to the successful purchaser (applicant) who has received it on same date and also stated to have received to “complete satisfaction and without any qualification/observation”.

# 3. It is submitted that a security guard (respondent No.1) appointed originally by the suspended management and continued by the security agency appointed by the respondent No.3 (on humanitarian grounds) has refused to leave the premises claiming an unfettered right to live on the premises since he has been staying there for many years. The Respondent No.1 is stated to have approached the local court with a view to enforce tenancy rights on industrial premises. The applicant enclosed a copy of the Civil Suit No.782/2020 wherein the Respondent No. 1(versus Pankajbhai Haribhai Varia and another 2

defendants) had sought a permanent injunction against eviction from rented premises. Later on he has withdrawn the petition with right to file fresh suit. The applicant also filed a letter with the Police Inspector (Respondent No.2) stating that the property bought by them on handing over of possession on 21.06.2023 from liquidator and when it was taken up for demolition of dilapidated shed, Respondent No.1, who was watchman, and his sons harassed them to stop the work.

# 4. Respondent No.1 has refuted all allegations made against him and stated that he has been staying in the premises in a small room where he has been staying with his family (and has been working as security guard) for last 39 years and the corporate debtor/suspended management used to deduct the rent amount of the room situated at disputed premises. As he has been in peaceful, continuous, uninterrupted and unobstructed possession of room, he is entitled to own the premises on the basis of “The Doctrine of Adverse Possession” and the principles laid down by Hon'ble Supreme Court in various matters. He has also stated that the property that has been sold by the liquidator has been a disputed premises of title and ownership since long and a civil suit before the Civil Judge Bhavnagar in Civil Suit No.73 of 2009 wherein status quo was granted against the transfer of disputed land/property of the said application was allowed by learned Civil Judge, Bhavnagar vide order dated 11.01.2011. Accordingly, there was a concealment of material facts and the Tribunal has been misguided on the sale of property done by liquidator as per the respondent. Further, he has clarified that it was in another civil suit  No.782 of 2020 preferred against the SBI and Mr Kiran Shah (liquidator and R-3) who were threatening to take over his premises, was withdrawn with the condition if in the future any sort of threat would be given or the premises of Respondent No.1 would be vacated without following due process of the law, then the Respondent no.1 would have liberty to approach the Civil Judge Bhagvnagar.

# 5. The liquidator has stated that the SBI as financial creditor of the corporate debtor had while taking action under SARFESI Act 2002, had appointed a security agency for protecting the assets in question and the agency has continued the engagement/employment of Respondent No.1 as security guard for the purpose. He had on sensing something wrong with the arrangement changed the security agency, but the Respondent No.1 was not inclined to leave the factory premises of the corporate debtor on the contrary claimed tenancy rights on the assets. Further in the year 2020 when the civil suit was filed before the

Hon'ble Civil Court at Bhavnagar claiming tenancy rights, he had contested the application and filed objection under Order VII Rule 11 in the matter and further had preferred  Special Civil Application before the Hon'ble Civil Court directing the court commission which was stayed by the Hon'ble High Court of Gujarat with a direction to the Addl. Civil Judge, Bhavnagar, to hear the application filed by the liquidator as expeditiously as possible in the interest of justice. Accordingly orders were reserved and on filing withdrawal pursis by the R-1, the same was dismissed as withdrawn. The liquidator has further on 21.06.2023 addressed a letter to the Police Inspector, Bortadev Police Station, Bhavnagar in the matter for assistance for vacation of Respondent No.1 from the premises.

# 6. Heard both the learned Counsels.

Conclusion:

# 7. There is no dispute regarding sale of assets of Corporate Debtor and purchased of it by the applicant. This application is not filed by the liquidator but it is filed by the purchaser, who has purchased the property. In paragraph no. F of the application, the applicant has clearly mentioned that the vacant and peaceful possession of the assets of Corporate Debtor was handed over to him by Respondent No.3 – Liquidator. This statement is also supported by the letter dated 21.06.2023 at Annexure D wherein also it is clearly mentioned that liquidator is handing over vacant and peaceful possession of the land and industrial shares of Corporate Debtor situated at Plot No. 36 CS No. 6095 Kubarwala, Madya Road, Bhavnagar, Gujarat. The applicant further verified the property and confirmed that he has obtained the vacant and peaceful possession of the land. Thus, it is crystal clear that at that time of confirming sale, the vacant possession of the premises were handed over to the applicant. As the vacant possession is handed over, it means that it was not occupied by any person at that time. After taking vacant possession from the liquidator it was duty of the purchaser to protect his properties. Therefore, now this cause will not fall within the ambit of liquidation process. Moreover, Respondent No. 1 also tried to initiate Civil Proceedings with respect to same property. When the vacant possession was given to the applicant, the liquidator is no more responsible in the matter. So also, this Tribunal is not having jurisdiction to entertain the applications which fall outside the ambit of liquidation process. In view of these  observations, the application itself is not maintainable. 

# 8. Hence, we are passing the following order:

ORDER

The application IA No. 752 of 2023 in C.P.(IB) No. 77 of 2018 is rejected.

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Mr. C. Bala Mouli, Liquidator, Gupta Global Resources Private Limited - Accordingly, we have no hesitation to hold that the Liquidator may proceed to consider assigning the Avoidance Applications to third party in consultation with the Stakeholder’s consultation committee.

 NCLT Mumbai-1 (17.01.2024) in Mr. C. Bala Mouli, Liquidator, Gupta Global Resources Private Limited  [I.A. 4918 OF 2023 in C.P.(IB) No. 1239/MB/2017] held that;

• We find that the Liquidator, subject to concurrence of Stakeholder’s committee, is vested with the power and authority to assign the asset considered to be Not readily realisable asset.

• Accordingly, we have no hesitation to hold that the Liquidator may proceed to consider assigning the Avoidance Applications to third party in consultation with the Stakeholder’s consultation committee. 

• In so far as prosecution of such pending application by such assignee is concerned, we are of considered view that the applications already filed by the person competent to do so, can be prosecuted by the assignees subsequently. 

Excerpts of the order;

# 1. This Application IA 4918/2023 is filed by Mr. C Bala Mouli, the Liquidator (“Applicant”) in the Liquidation proceedings of Gupta Global Resources Private Limited ("Corporate Debtor") seeking permission of this Tribunal in terms of Regulation 37A of Insolvency And Bankruptcy Board Of India (Liquidation Process) Regulations, 2016 to sell interest in the Avoidance Applications pending adjudication before this Tribunal. 

# 2. The National Company Law Tribunal, Mumbai Bench, vide its order dated 28 August, 2018, ordered for commencement of liquidation process of Gupta Global Resources Private Limited (hereinafter referred to as "Corporate Debtor") and appointed the Applicant as the Liquidator. 

# 3. The Applicant reported in the 21 Progress Report that all the assets of the Corporate Debtor have been duly realised and distribution thereof is pending in view of one pending litigation w.r.t. determining the priorities for distribution among the secured creditors 

# 4. Apart from the above, the Liquidator had also identified avoidance Transactions in the Corporate Debtor and had filed applications before the Hon'ble Bench u/s 43, 45, 49 and 66 of the Code. These applications are pending before this Tribunal for final adjudication. 

# 5. In terms of Regulation 37A(1) of the Liquidation Regulations, such assets, being not readily realisable, can be assigned or transferred through a transparent process, in consultation with stakeholders' consultation committee for a consideration to any person who is eligible to submit resolution plan during CIRP. 

# 6. Accordingly, a meeting of stakeholder consultation committee was convened on 4 July, 2023, wherein, it was suggested by the stakeholders to explore the option for assignment of avoidance transaction proceedings. While exploring the option to assign the avoidance transaction proceedings, the Liquidator has received positive response from a legal firm, viz. Legal Pay, based in New Delhi, which is largely engaged in playing in NRRA's and Legal Recoveries, which expressed interest for acquiring assets underlying avoidance transaction applications and submitted their proposal. 

# 7. The said proposal was placed before the stakeholder committee on 21 July, 2023 and thereafter or 31 July, 2023. In the said meeting, the stakeholders proposed to convene E-voting for the purpose of taking views of the members of the Committee. Accordingly, the Liquidator made arrangements to convene E-voting on 30 August, 2023. However, in the meantime, one of the members of the Committee viz. IDBI Bank, raised some apprehensions about the legality of an assignee to carry out the recovery process under the IBC Code 2016 in view of order passed by NCLT Delhi Bench in the matter of Ritu Tandon (Applicant/Operational Creditor) Versus M/s Rain Automotive India Private Limited. In view of these legal developments, the proposal of the Assignment of Avoidance transactions to the legal firm was dropped and the E-voting scheduled on 30th August 2023 was cancelled. 

# 8. Given that assets underlying the avoidance transaction applications are the only assets pending realisation, hence, in order to expedite the realisation process, and maximise value of the liquidation estate, the Liquidator intends to seek necessary directions from the Bench to sell the assets underlying avoidance transaction applications. Hence, the present application. 

# 9. Heard the learned Counsel and perused the material available on record. 

# 10. Regulations 37A of Liquidation Process Regulations reads as under – 

• 1) A liquidator may assign or transfer a not readily realisable asset through a transparent process, in consultation with the stakeholders’ consultation committee in accordance with regulation 31A, for a consideration to any person, who is eligible to submit a resolution plan for insolvency resolution of the corporate debtor. 

• Explanation.—For the purposes of this sub-regulation, “not readily realisable asset” means any asset included in the liquidation estate which could not be sold through available options and includes contingent or disputed assets and assets underlying proceedings for preferential, undervalued, extortionate credit and fraudulent transactions referred to in sections 43 to 51 and section 66 of the Code 

# 11. From a bare perusal of the above provisions, we find that the Liquidator, subject to concurrence of Stakeholder’s committee, is vested with the power and authority to assign the asset considered to be Not readily realisable asset. Further, Regulation 38 of Liquidation Process Regulation also contemplate distribution of such assets amongst the stakeholders. Accordingly, we have no hesitation to hold that the Liquidator may proceed to consider assigning the Avoidance Applications to third party in consultation with the Stakeholder’s consultation committee. In so far as prosecution of such pending application by such assignee is concerned, we are of considered view that the applications already filed by the person competent to do so, can be prosecuted by the assignees subsequently. 

# 12. In view of the above, IA 4918/2023 is allowed and disposed of accordingly. 

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State Bank of India Vs. Mr. Ramakant Gupta - In our view wisdom or right for change of liquidator is not available to SCC in the Liquidation process,

NCLT Ahmedabad-1 (17.01.2024) in State Bank of India Vs. Mr. Ramakant Gupta  [IA/26 (AHM) 2024 in CP (IB)/559(AHM) 2019] held that;

• The consultation committee, after recording the reasons, may by a majority vote of not less sixty-six per cent., propose to replace the liquidator and shall file an application.

• In the Liquidation process, the SCC has to record specific reason for replacement of the Liquidator.

• In our view wisdom or right for change of liquidator is not available to SCC in the Liquidation process,

• The applicant bank had stated only single reason to replace the present Liquidator that the Liquidator is not on the panel of the State Bank of India. In our view; it cannot be a valid and reasonable reason to change or to replace the Liquidator.

Excerpts of the order;

# 1. The present application is filed under Section 60(5) of the Insolvency Bankruptcy Code, 2016 and Bankruptcy Board of India (Liquidation Process) Regulations, 2016, read with Rule 11 and 32 of National Company Law Tribunal Rules, 2016 seeking the following reliefs: 

• 1) Your Lordship may be pleased to allow the Present Application; 

• 2) Your Lordship may be pleased to replace Mr. Ramakant Gupta by Mr. Sachin Bhattbhatt as Liquidator. 

• 3) Your Lordship may be pleased to grant any other relief as may deem fit in the interest of justice. 

# 2. FACTS OF THE CASE ARE AS FOLLOWS: 

I. The Corporate Debtor, a company incorporated on June 17, 2011, and duly registered under the Companies Act, 1956, engaging in Construction and Civil Engineering business. An application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC) was filed on 09.04.2019 by Applicant – (State Bank of India or bank) against Corporate Debtor i.e. M/s Sujyot Infrastructure Private Limited in Company Petition (IB) No. 559 of 2019 which was allowed and Corporate Insolvency Resolution Process was commenced against the Corporate Debtor vide order dated 22.12.2021 of this Tribunal. 

II. It is submitted by the Counsel for Applicant that on 17.06.2022 an Interlocutory Application No. 558 of 2022 was filed by Resolution Professional (RP) of the Corporate Debtor for initiation of liquidation process of the corporate debtor. This Tribunal vide its order dated 30.10.2023 passed an order of initiation of liquidation process of the Corporate Debtor. It is pertinent to note that while passing the order of liquidation, this Tribunal as per IBBI Circular No. Liq-12011/214/2023-IBB1/840 dated 18/07/2023 appointed the present respondent- Mr. Ramakant Gupta as a Liquidator to carry out the liquidation process of Corporate Debtor.

III. It is stated that the present application has been preferred by the applicant for replacement of the liquidator appointed vide order dated 30.10.2023. 

IV. It was submitted that the Resolution ProfessionalMr. Parag Sheth was to be appointed as the "Liquidator". However, this Tribunal as per the Circular dated 18.07.2023 appointed the present respondent- Mr. Ramakant Gupta as "Liquidator". The applicant has now noticed that the present respondent is not empanelled with the applicant as a Liquidator and hence the applicant requested to replace the liquidator- Mr. Ramakant Gupta with Mr. Sachin Bhattbhatt who is empanelled with the applicant bank. 

V. The counsel for applicant submitted that such submission of the bank is not in any manner indicating that the bank is leveling any allegations or incompetency on part of the present liquidatorMr. Ramakant Gupta. 

VI. It is stated that such agenda for replacement of liquidator was discussed in the Second Meeting of Stakeholder consultation Committee dated 20.12.2023 whereby it was resolved to replace Mr. Ramakant Gupta the present respondent as liquidator and to appoint Mr. Sachin Bhattbhatt as a Liquidator in place of Mr. Ramakant Gupta hence this application. 

VII. It is stated that the proposed liquidator has also given written consent dated 21.12.2023 to act as a liquidator in the present matter. 

# 3. We have heard the Counsel for the Applicant and perused the documents on record. We have observed the following : 

a. The State Bank of India has preferred the present application on behalf of SCC for replacement of the present liquidator who is Respondent herein only with the reason that the present Liquidator is not on the panel of the State Bank of India. 

b. The SCC in its 2nd Meeting considered the said proposal and the relevant Resolution is provided hereinbelow: 

• “RESOLVED THAT the members of the Stakeholders consultation committee hereby approve the replacement of present liquidator i.e., Mr. Ramakant Gupta having Registration no. IBBI/IPA-001/IP-P-02673/20222023/ 14105 with newly nominated liquidator i.e. Mr. Sachin Bhattbhatt having Registration no. IBBI/IPA-003/IPN000138/2017-2018/11514.” 

c. It is essential to emphasize that in accordance with the statutory mandate outlined in Regulation 31A of the IBBI (Liquidation Process) Regulations, 2016, a mandatory Written Consent Form, as stipulated in Form AA of Schedule II, is a prerequisite for the proposed liquidator's appointment. In addition to the requisite 66% voting percentage to pass the resolution, this form must be submitted before the Adjudicating Authority for the purpose of replacing the liquidator. It is noteworthy that such written consent has been attached in the present application. 

d. Moreover, during its 2nd Meeting, the SCC had approved the agenda of replacement of the Liquidator with 100% voting without giving any reasons for the replacement of the Liquidator. 

e. The provisions provided for replacement of Resolution Professional are contained in Section 27 of the IBC, 2016 and are reproduced below: 

• “Section 27. Replacement of resolution professional by committee of creditors. 

• (1) Where, at any time during the corporate insolvency resolution process, the committee of creditors is of the opinion that a resolution professional appointed under section 22 is required to be replaced; it may replace him with another resolution professional in the manner provided under this section. 

• (2) The committee of creditors may, at a meeting, by a vote of sixty-six per cent. of voting shares, resolve to replace the resolution professional appointed under section 22 with another resolution professional, subject to a written consent from the proposed resolution professional in the specified form. 

• (3) The committee of creditors shall forward the name of the insolvency professional proposed by them to the Adjudicating Authority. 

• (4) The Adjudicating Authority shall forward the name of the proposed resolution professional to the Board for its confirmation and a resolution professional shall be appointed in the same manner as laid down in section 16. 

• (5) where any disciplinary proceeding are pending against the proposed resolution professional under subsection (3), the resolution professional appointed under section 22 shall continue till the appointment of another professional under the section.” 

f. The IBBI (Liquidation) Regulation 31A.(11) specifically states that the Liquidator can be replaced by the SCC after recording the reasons in the minutes of the SCC. The relevant portion of the IBBI Liquidation Regulation are reproduced hereunder: 

• “31A. (11) The consultation committee, after recording the reasons, may by a majority vote of not less sixty-six per cent., propose to replace the liquidator and shall file an application, after obtaining the written consent of the proposed liquidator in Form AA of the Schedule II, before the Adjudicating Authority for replacement of the liquidator : Provided that where a liquidator is proposed to be replaced, he shall- 

• (a) continue to work till his replacement; and 

• (b) be suitably remunerated for work performed till his replacement.” 

g. It is noticed that there exist a marked difference for change of Resolution Professional and change of Liquidator. During CIRP the COC has the wisdom to replace the RP if there is majority of more than 66% without assigning any specific reason for such replacement as such option is available as a matter of right. In the Liquidation process, the SCC has to record specific reason for replacement of the Liquidator. 

h. Nowhere in the instant application, the Applicant had recorded any reason, neither the applicant is leveling any allegations nor incompetency on part of the liquidator who is performing his duties in the manner it should be performed. The relevant portion of para 4 of the application is reproduced hereunder: 

• “The applicant humbly submits that such submission of the applicant is not in any manner indicating that the applicant is levelling any allegations or incompetency on part of the liquidator. The applicant is submitting for replacement of the liquidator only because there is large money involved in the present matter and therefore with a commercial wisdom it is humbly submitted by the applicant that the liquidator i.e. the present respondent Mr. Ramkant Gupta be replaced by Mr. Sachin Bhattbhatt as a Liquidator.” 

# 4. In our view wisdom or right for change of liquidator is not available to SCC in the Liquidation process, recording the above we reject the present application as we hold no cognizant reason for replacement of the Liquidator are provided in the present application. The applicant bank had stated only single reason to replace the present Liquidator that the Liquidator is not on the panel of the State Bank of India. In our view; it cannot be a valid and reasonable reason to change or to replace the Liquidator. 

# 5. The Liquidator is directed to complete the liquidation process expeditiously as per law. 

# 6. Accordingly, with these observations the present application is dismissed and is disposed off. No order to cost.

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