# In the matter of Sarish Mittal and another vs. National Company Law Tribunal and Another

> HC judgment dated 2024-08-22. Citation: TCN-2024-HC-00045. The case involves two writ petitions (CWP Nos. 19562 of 2022 and 8750 of 2023) filed by Sarish…

- **Court:** HC
- **Order date:** 22 Aug 2024
- **Citation:** TCN-2024-HC-00045
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/high-courts-new-delhi/sarish-mittal-and-another-vs-national-company-law-tribunal-and-another-87ed5e13

## Summary

### Background

The case involves two writ petitions (CWP Nos. 19562 of 2022 and 8750 of 2023) filed by Sarish Mittal and another, challenging the actions and orders related to the Corporate Insolvency Resolution Process (CIRP) of M/s KSM Yarns Limited. The petitioners, being the suspended directors of KSM Yarns, raised concerns regarding the appointment and conduct of the Resolution Professional (RP), Nipan Bansal, and the decisions made by the National Company Law Tribunal (NCLT) and the Insolvency and Bankruptcy Board of India (IBBI). The CIRP was initiated due to the company's financial distress, with Nipan Bansal appointed as the Interim Resolution Professional/Resolution Professional (IRP/RP) on 20.12.2019. The petitioners alleged malpractices, misrepresentations, and fraud in

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## Facts

M/s KSM Yarns Limited was undergoing Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (IBC). Sarish Mittal and another, the suspended directors of KSM Yarns Limited, filed two writ petitions (CWP Nos. 19562 of 2022 and 8750 of 2023) challenging the CIRP proceedings. Nipan Bansal was appointed as the Interim Resolution Professional/Resolution Professional (IRP/RP) on 20.12.2019. The petitioners alleged that Nipan Bansal's appointment as RP was invalid because he did not secure the required 66% of votes in the Committee of Creditors (CoC). They claimed that he only secured 65.89% of votes initially, and a post-facto approval was obtained from Punjab National Bank. The petitioners raised allegations of malafide,

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## Issues and analysis

### Issue 1: Whether the appointment of respondent No. 2 as RP was valid under the statutory provisions of the …

**Ratio:** Section 22(2) of the IBC requires a 66% majority vote for the appointment of a Resolution

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**Reasoning:** The court noted the petitioners' argument that the RP initially failed to secure the

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**Interpretation:** The court interpreted Section 22(2) strictly regarding the voting threshold but

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**Application:** The court did not definitively rule on the validity of the RP's appointment but

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## Parties

- **Judges:** Lisa…; Amarjot B…
- **Appellants:** Sarish M…
- **Respondents:** KSM Yarns L…
- **Other parties:** Kohi…

## Timeline

- **2019-12-17 — CIRP Init…**: M/s KSM Yarns Limited…
- **2019-12-20 — RP Appoin…**: Nipan Bansal took over…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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