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

> NCLT judgment dated 2022-01-17. Citation: TCN-2022-NCLT-04436. The application IA/498(CHE)2021 in the matter of IBA/377/2020 was filed seeking the appointment…

- **Court:** NCLT
- **Order date:** 17 Jan 2022
- **Citation:** TCN-2022-NCLT-04436
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/nexus-electro-steel-ltd-iba-377-2020-2cf74336

## Summary

### Background

The application IA/498(CHE)2021 in the matter of IBA/377/2020 was filed seeking the appointment of Mr. Radhakrishnan Dharmarajan as Resolution Professional, replacing the existing Interim Resolution Professional (IRP), Mr. Mathur Sabapathy Viswanathan. The Committee of Creditors (CoC) had passed a resolution in its meeting held on 29.04.2021 to replace Mr. Mathur Sabapathi Viswanathan with Mr. Radhakrishnan Dharmarajan as the Resolution Professional, with 100% voting rights. The CoC authorized the IRP to file an application to the Adjudicating Authority for the replacement of the IRP and appointment of the new Resolution Professional.

## Facts

State Bank of India initiated insolvency proceedings against Nexus Electro Steel Ltd. An Interim Resolution Professional (IRP), Mr. Mathur Sabapathy Viswanathan, was appointed. Subsequently, the Committee of Creditors (CoC) resolved to replace Mr. Mathur Sabapathy Viswanathan with Mr. Radhakrishnan Dharmarajan as the Resolution Professional, as per the minutes of the CoC meeting held on 29.04.2021. This resolution was passed with 100% voting rights. The IRP was authorized to file an application with the Adjudicating Authority for the replacement. The application IA/498(CHE)2021 was filed to effect this change.

## Issues and analysis

### Issue 1: Whether the replacement of the Interim Resolution Professional (IRP) by a new Resolution …

**Ratio:** Section 22(3)(b) of the Insolvency and Bankruptcy Code, 2016 allows the Committee of

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**Reasoning:** The court considered the resolution passed by the Committee of Creditors, which had 100%

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**Interpretation:** Section 22(3)(b) of the IBC grants the CoC the power to replace the IRP with a

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**Application:** In this case, the CoC exercised its power under Section 22(3)(b) of the IBC to

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## Parties

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

## Timeline

- **2021-04-29 — CoC Meet…**: The Committee of Creditors passed a resolution to replace the Interim Resolution…
- **2022-01-17 — Court He…**: The National Company Law Tribunal (NCLT) heard the application for the replacement of the…

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