Pending Appeal Against CoC Formation Not Grounds To Oppose Appointment Of New Resolution Professional: NCLAT

The National Company Law Appellate Tribunal (NCLAT) at Delhi has recently held that an ongoing appeal questioning the validity or constitution of a Committee of Creditors (CoC) does not prevent the CoC, once constituted and functioning, from replacing the resolution professional (RP) with the approval of the NCLT.A bench of Chaiperson Justice Ashok Bhushan and Technical Member Barun Mitra while dismissing the challenge raised by the suspended director of the insovent company observed, “The CoC which is existing as on date and functioning has passed the resolution for change of the RP which has been approved the impugned order. The mere fact that appellant is aggrieved by the constitution of the CoC and made a challenge that is pending consideration in this Tribunal cannot be a ground to oppose the appointment of the RP, who has the approval under Section 27.”The case dates back to the initiation of CIRP against Beoworld Private Limited by the NCLT New Delhi, which on 7 June 2022 admitted a Section 9 application filed by DSV Air and Sea Private Limited. The NCLT found that Beoworld had acknowledged its liability, made part payments, and still owed over Rs 40 lakhs, and therefore rejected the corporate debtor's claim of a pre-existing dispute. As no IRP name had been proposed by the operational creditor, the tribunal appointed Ankit Gupta as IRP from the IBBI list and directed him to take charge of the management immediately. After the formation of the CoC, the committee filed an application before the NCLT seeking approval to appoint Rakesh Kumar Parakh as the RP. The NCLT allowed this request on 29 July 2025, and the suspended director of Beoworld, Bikram Bhadur, challenged the order before the NCLAT. Bhadur argued that he had already challenged the constitution of the CoC before the NCLT. That challenge was dismissed, and his appeal is still pending before the NCLAT. He contended that the CoC could not have proceeded to approve a new RP while its own constitution was under challenge. The NCLAT rejected this argument and held that Section 27 of the Insolvency Code empowers a functioning CoC to replace a resolution professional with the requisite majority. It further held that a pending challenge to the constitution of the CoC cannot restrain or invalidate the appointment of an RP that has already been approved by the NCLT. The tribunal also clarified that the RP appointment shall have no bearing on the pending issues raised by Bhadur.Finding no error in the NCLT order, the appellate tribunal dismissed the appeal and upheld the appointment of Rakesh Kumar Parakh as the resolution professional. Case Name: Bikram Bhadur, Suspended Director of Beoworld Pvt. Ltd. v. Committee of Creditors of Beoworld Pvt. Ltd. & Ors. Case Number: Company Appeal (AT) (Ins) No. 1432 of 2025 For Appellant: Advocates Nikhil Kohli and Akshaya GanpathClick Here To Read/Download Order

Pending Appeal Against CoC Formation Not Grounds To Oppose Appointment Of New Resolution Professional: NCLAT

Mohd.Rehan Ali

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