Pending Appeal Regarding CoC Formation Not Grounds To Oppose Appointment Of New Resolution Professional: NCLAT
Sangeetha Prathap
The National Company Law Appellate Tribunal (NCLAT), Delhi has held that a pending appeal questioning the validity or constitution of a Committee of Creditors (CoC) is not a ground to oppose the CoC’s decision to replace the Resolution Professional (RP) once the CoC has already been formed and is functioning. The Tribunal reiterated that Section 27 of the Insolvency and Bankruptcy Code empowers the CoC to replace an RP with the requisite majority, and the pendency of proceedings concerning the constitution of the CoC does not restrain the exercise of this power.
A Bench comprising Chairperson Justice Ashok Bhushan and Technical Member Barun Mitra was hearing an appeal filed by Bikram Bhadur, the suspended director of Beoworld Private Limited, challenging the order dated 29 July 2025 passed by the NCLT, New Delhi Bench–III. The NCLT had allowed an application filed by the CoC seeking approval for the appointment of Rakesh Kumar Parakh as the Resolution Professional in place of the Interim Resolution Professional, Ankit Gupta.
The appeal arose in the backdrop of CIRP initiated against Beoworld Private Limited by the NCLT on 7 June 2022 under Section 9 of the Code, on the application filed by DSV Air and Sea Private Limited. The NCLT found that Beoworld had acknowledged its liability, made part payments, and still owed more than ₹40 lakh, and therefore rejected the corporate debtor’s defence of a pre-existing dispute before admitting the application. After admission, since the operational creditor had not proposed the name of an IRP, the NCLT appointed Ankit Gupta from the IBBI panel and directed him to assume charge of the company's management.
Following the constitution of the CoC, the committee resolved to appoint Rakesh Kumar Parakh as the Resolution Professional and filed an application before the NCLT seeking approval under Section 27. The NCLT granted approval on 29 July 2025, prompting the suspended director to challenge the order before the NCLAT. The appellant argued that the constitution of the CoC had been independently challenged before the NCLT and that his appeal against the rejection of that challenge was pending before the NCLAT. He contended that the CoC had no authority to approve a change of RP while its own constitution was under dispute.
The NCLAT rejected this argument and held that the statutory right of the CoC under Section 27 to replace the Resolution Professional cannot be hindered merely because the corporate debtor or its suspended management is dissatisfied with the constitution of the CoC. It recorded that “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 which 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 Tribunal also clarified that approving the appointment of the new RP would have no bearing on the issues raised by the appellant in the separate challenge to the constitution of the CoC. It emphasised that the functioning of the CoC and the implementation of the CIRP cannot be stalled by the pendency of such proceedings. Finding no error in the NCLT’s order dated 29 July 2025, the NCLAT dismissed the appeal and affirmed the appointment of Rakesh Kumar Parakh as the Resolution Professional.
Appearance
For Appellant: Mr. Nikhil Kohli and Miss Akshaya Ganpath, Advocates.
Cause Title: Bikram Bhadur, Suspended Director of Beoworld Pvt. Ltd. v. Committee of Creditors of Beoworld Pvt. Ltd. & Ors.
Case No: Company Appeal (AT) (Ins) No. 1432 of 2025
Coram: Chairperson Justice Ashok Bhushan, Technical Member Barun Mitra
