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

> NCLT judgment dated 2021-07-09. Citation: TCN-2021-NCLT-01798. The application MA/80(CHE)/2021 was filed based on the 12th CoC meeting for the replacement of…

- **Court:** NCLT
- **Order date:** 9 Jul 2021
- **Citation:** TCN-2021-NCLT-01798
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/leo-primecomp-pvt-ltd-ma-80che-2021-in-iba-578-2019-b68a63cb

## Summary

### Background

The application MA/80(CHE)/2021 was filed based on the 12th CoC meeting for the replacement of the Resolution Professional (RP) in the Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor. The CIRP commenced on 2019-07-24. State Bank of India is the sole member of the Committee of Creditors (CoC). The Corporate Debtor has been kept as a going concern. The sole CoC member decided to replace the RP due to an 'operational need'. The Adjudicating Authority was notified that the suggested RP appears to be an ex-employee of State Bank of India, the Financial Creditor.

## Facts

The State Bank of India initiated CIRP against Mathur Sabapathy Viswanathan under Section 27 of IBC, 2016. The CIRP commenced on 2019-07-24. State Bank of India is the sole member of the CoC. The 12th CoC meeting decided to replace the RP due to 'operational need'. The proposed RP is an ex-employee of the State Bank of India. The company has been kept as a going concern, but the CoC appears to want to go for liquidation. No resolution plan is available for consideration.

## Issues and analysis

### Issue 1: Whether the appointment of an ex-employee of the Financial Creditor as the Resolution Professional …

**Ratio:** The principle of impartiality and the avoidance of conflicts of interest are fundamental

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**Reasoning:** The court expresses concern that appointing an ex-employee of the Financial Creditor as

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**Interpretation:** The court interprets the IBC provisions related to the appointment of RPs to

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**Application:** The court applies this principle to the specific facts by questioning the

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## Parties

- **Judges:** R. Sucha…; B. Anil…
- **Appellants:** State Bank of…
- **Respondents:** Mathur Sabapathy…

## Timeline

- **2019-07-24 — CIRP Commen…**: Corporate Insolvency…
- **2021-02-05 — 12th CoC M…**: The 12th Committee of Creditors (CoC) meeting was held where the decision to replace the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 27 — Replacement of resolution professional by…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-27)

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