Liquidator can be removed under IBC, 2016 on any of the grounds provided under Sec. 276 of the Companies Act, 2013 – State Bank of India Vs. Mr. Kari Venkateswarlu – NCLT Hyderabad Bench
NCLT Hyderabad held that:
(i) The liquidator is the appointee of this Authority. He is supposed to act as a neutral umpire vis-a-vis various stakeholders in the game.
(ii) It is for the CoC etc. but not the Resolution Professional, to take appropriate proceedings or file an appeal and the Resolution Professional should have maintained a neutral stand.
(iii) The relationship between the liquidator and the Adjudicating Authority is sort of fiduciary. Similarly, the liquidator has also to maintain highest regard to the principles of integrity and honesty in dealing with all the stakeholders.
(iv) The grounds under Sec. 276 of Companies Act, 2013 have direct link with the functioning of the liquidator and if he treads the path which clash with the interest of the stakeholders or shock the conscience of the common man, he can be removed. On the same analogy, the liquidator can also be removed under the IBC on any of the above grounds.