Resolution Professional is an Officer of the Court and he is to exercise reasonable and responsible care for the company whose property and affairs are entrusted with him – Canara Bank Vs. Ms. Mamta Binani, RP of Aristo Texcon Pvt. Ltd. – NCLAT New Delhi
NCLAT upheld decision of the AA and dismissed the appeal which was filed on the ground that AA while passing the impugned order had failed to consider that there is no equal treatment between the Financial Creditors while distributing Funds under the Resolution Plan. NCLAT held that Resolution Professional is an Officer of the Court and he is to exercise reasonable and responsible care for the company whose property and affairs are entrusted with him. In case, the Resolution Plan is not meeting the requirement of Section 30 of the Code, the Resolution Professional is empowered to refuse to present the Plan to the CoC. An ex-facie opinion is to be offered to the CoC by the Resolution Professional that the Law was not violated. Subjective satisfaction is a pre-requisite for approval of Resolution Plan. A threadbare scrutiny and a study of the Resolution Plan is to be made prior to the ‘satisfaction’ being arrived at by the Adjudicating Authority in a written form. The Code speaks of accountability of the Insolvency Professional and also the CoC who comprise of the Lender Banks.