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Manish Kumar Jha
Partner JSA |Seasoned Legal Pro | Expert in Corporate, Insolvency, & Trademark Law | Arbitration Specialist | Mentor, Speaker, & Legal Strategist| Part-Time Canine and Human Behavior Specialist
Manish Jha is an Experienced Partner at J. Sagar Associates with a strong background in the legal services industry.
He possesses expertise in Legal Writing, Corporate Law, Intellectual Property, Civil Litigation, and Microsoft Excel.
Manish holds an International Post Graduate Diploma in General Insurance from the Institute Of Insurance And Risk Management.
His educational background includes LLB in Law from Campus Law Centre and Faculty of Law at Delhi University.
Highlights
𝐖𝐡𝐞𝐭𝐡𝐞𝐫 𝐚 𝐜𝐫𝐞𝐝𝐢𝐭𝐨𝐫 𝐡𝐚𝐬 𝐭𝐡𝐞 𝐫𝐢𝐠𝐡𝐭 𝐭𝐨 𝐫𝐞𝐩𝐥𝐚𝐜𝐞 𝐚 𝐬𝐮𝐬𝐩𝐞𝐧𝐝𝐞𝐝 𝐑𝐞𝐬𝐨𝐥𝐮𝐭𝐢𝐨𝐧 𝐏𝐫𝐨𝐟𝐞𝐬𝐬𝐢𝐨𝐧𝐚𝐥 (𝐑𝐏) 𝐮𝐧𝐝𝐞𝐫 𝐒𝐞𝐜𝐭𝐢𝐨𝐧 98 𝐨𝐟 𝐭𝐡𝐞 𝐈𝐧𝐬𝐨𝐥𝐯𝐞𝐧𝐜𝐲 𝐚𝐧𝐝 𝐁𝐚𝐧𝐤𝐫𝐮𝐩𝐭𝐜𝐲 𝐂𝐨𝐝𝐞 (𝐈𝐁𝐂)? I had the privilege of arguing on behalf of the #StateBankofIndia in the case of Company Appeal (AT) (Insolvency) No. 1624 of 2024 before the NCLAT, New Delhi. The core issue was whether a creditor could replace a suspended Resolution Professional (RP) under Section 98 of the IBC. We successfully defended the replacement of the suspended RP, and the appeal was dismissed.
𝐁𝐫𝐢𝐞𝐟 𝐅𝐚𝐜𝐭𝐬: The appellant, Sandeep Kumar Bhatt, had been appointed as the RP for insolvency proceedings initiated by SBI against the personal guarantor, Shantanu Jagdish Prakash, one of the promoters of Educomp Solutions Ltd.
However, following an order by the IBBI suspending the appellant for two years due to disciplinary proceedings, SBI exercised its right to replace the RP, which was allowed by the NCLT, New Delhi.
𝐀𝐫𝐠𝐮𝐦𝐞𝐧𝐭𝐬: I argued on behalf of SBI that once the RP has been suspended by the IBBI, they cannot continue in any capacity under the IBC, including for existing assignments. Further, under Section 98, the creditor has the right to seek a replacement when there are valid reasons, such as disciplinary action against the RP.
The appellant, however, contended that the CoC (Committee of Creditors) had the discretion to retain the RP despite the suspension and that SBI, as the sole financial creditor, could not unilaterally request a replacement.
𝐑𝐮𝐥𝐢𝐧𝐠: The NCLAT upheld our argument, ruling that the replacement of the RP was justified and per the provisions of Section 98 of the IBC. The Tribunal emphasized that SBI, having initiated the insolvency process, acted within its rights by seeking a replacement in light of the RP’s suspension.
𝐂𝐨𝐦𝐦𝐞𝐧𝐭: It seems to be a standard practice of IBBI, while passing suspension orders, to allow suspended RPs to continue with existing assignments, subject to the CoC's consent. However, I believe this practice is untenable for several reasons:
𝑭𝒊𝒓𝒔𝒕, to function as an RP, one must have valid registration with the IBBI. Once that registration is suspended, there should be no question of the RP continuing with any assignment. The suspension effectively eclipses the RP's ability to act.
𝑺𝒆𝒄𝒐𝒏𝒅, the suspension arises from disciplinary proceedings, which typically involve allegations of irregularities or breaches of IBC laws. Allowing an RP under such a cloud to continue undermines the integrity of the insolvency process.
I firmly believe the IBBI should reconsider issuing such orders, as it risks weakening the credibility of the entire insolvency framework.
#LegalVictory #IBC #InsolvencyLaw #NCLAT #CorporateLaw #RPReplacement #ManishJha #LegalSuccess
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