IBC Does Not Bar Appointment Of Common Resolution Professional For Group Companies: NCLT Mumbai
Pranav B Prem
The Mumbai Bench of the National Company Law Tribunal (NCLT) has held that the Insolvency and Bankruptcy Code, 2016 does not prohibit the appointment of a common Resolution Professional (RP) for companies belonging to the same corporate group, and that such appointment does not automatically give rise to a conflict of interest. The Tribunal observed that unless a clear and demonstrable conflict is established, the mere fact that a single RP is overseeing insolvency proceedings of both a parent company and its subsidiary cannot be a ground for removal. A coram comprising Judicial Member Lakshmi Gurung and Technical Member Hariharan Neelakanta Iyer dismissed an interlocutory application filed by the erstwhile promoter of KLT Automotive and Tubular Products Limited seeking the removal of Ashutosh Agarwala as the Resolution Professional of the company.
The application was filed by Jubin Kishore Thakkar, the erstwhile promoter of KLT Automotive and Tubular Products Limited, invoking Section 60(5) of the IBC. The applicant contended that Agarwala’s appointment as RP for both KLT and its subsidiary, Colour Roof (India) Limited (CRIL), resulted in a conflict of interest. CRIL had been admitted into corporate insolvency resolution process in February 2023, while KLT entered CIRP subsequently in September 2024.
During the CIRP of CRIL, KLT had submitted a claim of over ₹12.69 crore. The RP repeatedly sought documentary substantiation of the claim. In the absence of supporting documents, the RP admitted only a token claim of Re.1, rejected claims exceeding ₹12.12 crore, and treated ₹56.53 crore as a contingent liability. Shortly thereafter, KLT itself was admitted into CIRP, and Agarwala was appointed as its Interim Resolution Professional and later confirmed as RP after the Committee of Creditors unanimously voted in his favour.
The promoter alleged that Agarwala failed to safeguard KLT’s interests by not pursuing recovery of its claims against CRIL, and that his dual role amounted to a violation of the code of conduct governing insolvency professionals. Reliance was placed on reports relating to group insolvency to argue that a common RP should not be appointed where inter-company claims exist.
The Tribunal, however, noted that the grievance of the applicant essentially arose from the partial rejection of KLT’s claim in the CIRP of CRIL, which was pending before a different bench of the NCLT and could not be examined in the present proceedings. It further recorded that the RP had repeatedly sought documents to substantiate the claim and that even during the hearing, the applicant conceded that no documents were available to support the major portion of the claim.
Importantly, the Tribunal observed that the RP had disclosed to the Committee of Creditors that he was not a related party to either company and had no prior employment or advisory relationship with the corporate debtors or the promoter group. The Bench noted that the CoC was fully aware of the objections raised by the promoter and yet unanimously voted to appoint Agarwala as the RP of KLT.
Rejecting the argument of inherent conflict, the Tribunal categorically held that “the Code does not explicitly prohibit appointment of a single RP for companies which belong to the same group,” and that based on the facts of the case, there was no evident conflict of interest in the appointment of the RP in the CIRP of KLT. It further observed that nothing had been placed on record to show that the RP was deficient in discharging his duties.
On the issue of locus, the Tribunal reiterated that the commercial wisdom of the Committee of Creditors is paramount under the IBC. It held that an erstwhile promoter, who is not a member of the CoC, has no right to seek replacement of a resolution professional, particularly when the CoC has expressed confidence in the RP by a unanimous vote.
Finding no material irregularity or mala fide conduct on the part of the Resolution Professional, the Tribunal dismissed the application and refused to interfere with the decision of the Committee of Creditors. Consequently, the plea seeking removal of the common Resolution Professional was rejected, and the application stood dismissed in its entirety.
Appearance
For Applicant: Advocates Ayush Rajani, Shyam Kapadia, Sanaya Patel and Sourasubha Ghosh.
For Respondents: Advocates Nausher Kohli along with Pulkitesh Dutt Tiwari instructed by Menon& Mankava.for R1; Advocates Rohit Gupta along with Advocates Manaswi Agrawal and Salomi Kalwade instructed by Meraki Chambers for R2.
Cause Title: Jubin Kishore Thakkar v. Ashutosh Agarwala & Anr.
Case No: 2026 LLBiz NCLT (MUM) 1
Coram: Judicial Member Lakshmi Gurung , Technical Member Hariharan Neelakanta Iyer
