# In the matter of Leo Primecomp Pvt. Ltd. MA-80(CHE)-2021 in IBA-578-2019

> NCLT judgment dated 2021-07-15. Citation: TCN-2021-NCLT-01739. The case involves an application (MA/80(CHE)/2021) within an existing insolvency proceeding…

- **Court:** NCLT
- **Order date:** 15 Jul 2021
- **Citation:** TCN-2021-NCLT-01739
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/leo-primecomp-pvt-ltd-ma-80che-2021-in-iba-578-2019-6b0cd58a

## Summary

### Background

The case involves an application (MA/80(CHE)/2021) within an existing insolvency proceeding (IBA/578/2019) where the Adjudicating Authority questioned the reason for replacing the Resolution Professional (RP) during the 12th Committee of Creditors (CoC) meeting on February 5, 2021, especially considering the Corporate Debtor was nearing liquidation. The applicant cited 'operational need' for the change, stating the sole CoC member decided to replace the RP. The Adjudicating Authority requested a detailed affidavit explaining the 'operational need' since the company was heading for liquidation. However, no affidavit was filed.

## Facts

The State Bank of India initiated insolvency proceedings against Mathur Sabapathy Viswanathan under Section 27 of the IBC, 2016. An application, MA/80(CHE)/2021, was filed within the main insolvency case, IBA/578/2019. The Adjudicating Authority questioned the reason for replacing the RP during the 12th CoC meeting held on 05.02.2021, especially since the Corporate Debtor was nearing liquidation. The applicant cited 'operational need' for the replacement, stating that the sole CoC member (State Bank of India) decided to replace the RP. The Adjudicating Authority requested a detailed affidavit explaining the 'operational need'. No affidavit was filed. The applicant's counsel sought to withdraw the application, stating that no CoC meeting had been conducted and no

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority can approve the replacement of the Resolution Professional (RP) …

**Ratio:** The Adjudicating Authority cannot act as a rubber stamp to admit the decision of the CoC

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**Reasoning:** The court reasoned that all decisions, including the replacement of the RP, must be

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**Interpretation:** This emphasizes the Adjudicating Authority's duty to independently assess the

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**Application:** In this case, the court required the applicant to provide a detailed affidavit

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## Parties

- **Judges:** R. Sucha…; B. Anil…
- **Appellants:** State Bank of…
- **Respondents:** Mathur Sabapathy…
- **Advocates:** R.Sugum…; M.S. Viswa…

## Timeline

- **2021-02-05 — 12th CoC M…**: 12th Committee of Creditors (CoC) meeting held where the replacement of the Resolution…
- **2021-07-09 — Order Da…**: Adjudicating Authority asked the Applicant to specify the reason for change of the RP in…

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