# In the matter of Pratistha Dairy Farms Private Limited IA No.19-ALD-2022 in CP (IB) No.90-ALD-2019

> NCLT judgment dated 2022-03-02. Citation: TCN-2022-NCLT-03926. The case involves an application (IA No.19/ALD/2022) filed in connection with a Corporate…

- **Court:** NCLT
- **Order date:** 2 Mar 2022
- **Citation:** TCN-2022-NCLT-03926
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/pratistha-dairy-farms-private-limited-ia-no19-ald-2022-in-cp-ib-no90-ald-2019-3d0bd8bf

## Summary

### Background

The case involves an application (IA No.19/ALD/2022) filed in connection with a Corporate Insolvency Resolution Process (CIRP) under CP (IB) No.90/ALD/2019. The Committee of Creditors (CoC), being the sole member, sought the replacement of the Interim Resolution Professional (IRP) with another Resolution Professional (RP). The Corporate Debtor was admitted into CIRP on 2021-08-11. The CoC rejected the continuation of the IRP as RP and proposed a new RP in a subsequent meeting. The IRP's fees were outstanding, and the Adjudicating Authority directed the CoC to pay these fees. The CoC maintained its stance on replacing the IRP.

## Facts

Baff Engineers Private Limited initiated CIRP against Pratistha Dairy Farms Private Limited. The Corporate Debtor, Pratistha Dairy Farms Private Limited, was admitted into CIRP on 2021-08-11. Canara Bank, as the sole member of the Committee of Creditors (CoC), sought to replace the Interim Resolution Professional (IRP), Mr. Ankit Agrawal, with Mr. Bhoopesh Gupta. The CoC rejected the continuation of the existing IRP as RP with 100% votes. The IRP's outstanding fees amounted to ₹7,16,064. The CoC offered the IRP ₹2 Lakh to complete the remaining 150 days of CIRP, which the IRP declined. The proposed RP, Mr. Bhoopesh Gupta, is based in Lucknow, while the Corporate Debtor's assets are in Moradabad. The IRP was based in Bareilly, near Moradabad. The CoC did not provide a

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## Issues and analysis

### Issue 1: Whether the change of IRP by not approving his continuation as RP in the first meeting itself and …

**Ratio:** The exercise of commercial wisdom by the CoC is subject to certain limitations and must

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**Reasoning:** The court reasoned that the CoC's decision to replace the IRP was not based on sound

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**Interpretation:** The court interpreted the concept of commercial wisdom in the context of the

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**Application:** The court applied the ratio to the facts of the case and held that the CoC's

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## Parties

- **Judges:** Rajasekha…; Virendra Kumar…
- **Appellants:** Baff Engineers…
- **Respondents:** Pratistha Dairy…

## Timeline

- **2021-08-11 — Admission in…**: Corporate Debtor admitted into CIRP…
- **2021-09-10 — First CoC M…**: First meeting of the Committee of Creditors (CoC) held; proposal for IRP's fee and…

## 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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