# In the matter of Diwan Chand Arya Vs. Government of Sikkim & Ors. CA(AT)(Ins)No. 1008 of 2020

> NCLAT judgment dated 2020-11-23. Citation: TCN-2020-NCLAT-00041. The case involves an appeal against an order passed by the Adjudicating Authority (National…

- **Court:** NCLAT
- **Order date:** 23 Nov 2020
- **Citation:** TCN-2020-NCLAT-00041
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/diwan-chand-arya-vs-government-of-sikkim-ors-ca-a21d136c

## Summary

### Background

The case involves an appeal against an order passed by the Adjudicating Authority (National Company Law Tribunal), New Delhi, Court-IV, during the Corporate Insolvency Resolution Process (CIRP) of ‘Sikkim Hydro Venture Limited’. The appellant, Diwan Chand Arya, was replaced as the Resolution Professional by Mr. Debrath Rana. The replacement was based on a decision made during the 4th Committee of Creditors (CoC) meeting, where the CoC confirmed the replacement with 97.98% voting shares.

## Facts

Diwan Chand Arya, acting as Resolution Professional for ‘Sikkim Hydro Venture Limited’, was replaced by Debrath Rana following an order by the Adjudicating Authority (NCLT), New Delhi. The replacement stemmed from a decision at the 4th Committee of Creditors (CoC) meeting, where the CoC voted with 97.98% shares to replace Arya. The Power Department of the Government of Sikkim, a major stakeholder, had reservations about Arya's conduct. Arya appealed the NCLT's order, arguing it violated the Insolvency and Bankruptcy Code, 2016, and damaged his professional reputation. The CoC was dissatisfied with Arya's handling of the Corporate Insolvency Resolution Process (CIRP). The NCLAT dismissed Arya's appeal, finding no flaw in the CoC's decision and no evidence of misconduct

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority's order to replace the Resolution Professional was justified …

**Ratio:** The Committee of Creditors has the authority to replace a Resolution Professional if they

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**Reasoning:** The court reasoned that the CoC's decision was based on their dissatisfaction with the

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**Interpretation:** The Insolvency and Bankruptcy Code grants significant power to the Committee of

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**Application:** In this case, the CoC, being dissatisfied with the appellant's conduct,

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## Parties

- **Judges:** Bansi Lal…; Anant Bijay…; +1 more
- **Appellants:** Diwan Chan…
- **Respondents:** Sikkim Hydro…; Government of…

## Timeline

- **2020-11-11 — Impugned Ord…**: The Adjudicating Authority (National Company Law Tribunal), New Delhi, Court-IV passed…
- **2020-11-23 — Order Da…**: NCLAT order dismissing…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 22 — Appointment of resolution professional](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-22)

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