# In the matter of Nexus Electro Steel Ltd. IBA-377-2020

> NCLT judgment dated 2022-01-17. Citation: TCN-2022-NCLT-04438. The application IA/498(CHE)2021 was filed in the National Company Law Tribunal (NCLT), Chennai,…

- **Court:** NCLT
- **Order date:** 17 Jan 2022
- **Citation:** TCN-2022-NCLT-04438
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/nexus-electro-steel-ltd-iba-377-2020-1a8ddb62

## Summary

### Background

The application IA/498(CHE)2021 was filed in the National Company Law Tribunal (NCLT), Chennai, in relation to an insolvency resolution process under the Insolvency and Bankruptcy Code, 2016. The case pertains to IBA/377/2020 involving State Bank of India as the petitioner and Nexus Electro Steel Ltd as the respondent. The application seeks the replacement of the Interim Resolution Professional (IRP), Mr. Mathur Sabapathy Viswanathan, with Mr. Radhakrishnan Dharmarajan, as resolved by the Committee of Creditors (CoC).

## Facts

State Bank of India initiated insolvency proceedings against Nexus Electro Steel Ltd under the Insolvency and Bankruptcy Code, 2016. Mr. Mathur Sabapathy Viswanathan was appointed as the Interim Resolution Professional (IRP). Subsequently, the Committee of Creditors (CoC) convened and resolved to replace Mr. Mathur Sabapathy Viswanathan with Mr. Radhakrishnan Dharmarajan as the Resolution Professional. This decision was made with 100% voting rights by the CoC. The application IA/498(CHE)2021 was filed before the NCLT, Chennai, seeking the court's approval for this replacement. The CoC's decision is based on Section 22 of the Insolvency & Bankruptcy Code, 2016, which allows for the replacement of the IRP under certain conditions. The relevance of these facts lies in

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## Issues and analysis

### Issue 1: Whether the NCLT should approve the replacement of the Interim Resolution Professional (IRP) with a …

**Ratio:** The legal principle applied is that the Committee of Creditors (CoC) has the authority to

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**Reasoning:** The court reasoned that the Committee of Creditors (CoC) had passed a resolution with

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**Interpretation:** Section 22(3)(b) of the Insolvency and Bankruptcy Code, 2016, is interpreted to

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**Application:** In this case, the Committee of Creditors (CoC) exercised its power under

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## Parties

- **Judges:** S. Ramath…; B. Anil…
- **Appellants:** State Bank of…
- **Respondents:** Nexus Electro…; Nexus Electro…

## Timeline

- **2021-04-29 — Meeting of Committee of…**: The Committee of Creditors held its 1st meeting and passed a resolution to replace the…
- **2022-01-17 — NCLT Hea…**: The NCLT, Chennai, heard the application IA/498(CHE)2021 regarding the replacement of the…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 22(3) — Appointment of resolution professional](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-22)

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