NCLAT Sets Aside NCLT’s Replacement of RP, Upholds CoC’s Primacy Under IBC

April 22, 2026 : The National Company Law Appellate Tribunal (NCLAT), Principal Bench at New Delhi, has set aside an order of the National Company Law Tribunal (NCLT) which had substituted the Resolution Professional (RP) proposed by the Committee of Creditors (CoC) with its own nominee, reaffirming that the adjudicating authority cannot transgress the statutory scheme under the Insolvency and Bankruptcy Code, 2016 (IBC).

The appellate tribunal, comprising Justice Ashok Bhushan (Chairperson) and Barun Mitra (Technical Member), was adjudicating appeals filed by 17 homebuyer-allottees in the corporate insolvency resolution process (CIRP) of Three C Projects Pvt. Ltd.

The dispute arose from the 52nd CoC meeting held on 11.02.2026, where the CoC—comprising predominantly homebuyers—resolved with 100% voting share to replace the existing RP, Ajit Kumar, with Krit Narayan Mishra, after obtaining his written consent.

Subsequently, an application was filed before the NCLT under Section 27 of the IBC seeking approval of the replacement. However, the move was opposed by four dissenting allottees. The NCLT, by a common order dated 02.03.2026, rejected the CoC’s nominee and instead appointed another insolvency professional, Rajesh Ramnani, citing “extraordinary interest” allegedly shown by the proposed RP.

Challenging this, the appellants contended before the NCLAT that the NCLT had exceeded its jurisdiction by disregarding the commercial wisdom of the CoC despite full compliance with statutory requirements.

The NCLAT examined Section 27 of the IBC and reiterated that the provision clearly empowers the CoC to replace the RP, subject to a minimum 66% voting share and prior written consent of the proposed professional. It emphasised that once these conditions are satisfied, the adjudicating authority is only required to forward the name to the Insolvency and Bankruptcy Board of India (IBBI) for confirmation.

Rejecting the reasoning adopted by the NCLT, the appellate tribunal held that there is no scope within the statutory framework for the adjudicating authority to substitute the CoC’s choice with its own nominee. It found the conclusion regarding “extraordinary interest” to be unsupported by any substantive material or violation of law.

On the issue of assurances sought by the CoC from the proposed RP regarding timelines and milestones, the tribunal held that such expectations were legitimate, particularly in light of dissatisfaction with the progress under the existing RP. It observed that such commitments were aligned with the objective of ensuring timely completion of the CIRP and did not contravene the Code.

Addressing the allegation that the proposed RP had provided legal advice prior to appointment, the tribunal noted that the advice was rendered in an independent professional capacity and expressly disclaimed any connection to prospective appointment. It held that such conduct did not violate the Code or the Code of Conduct applicable to insolvency professionals.

Similarly, the tribunal dismissed concerns regarding the proposed RP engaging legal counsel, observing that once impleaded as a party in proceedings, he was entitled to defend his interests.

The NCLAT also criticised the NCLT for giving undue weight to allegations raised by a “miniscule minority” of four allottees out of over 2,100 homebuyers, noting that such conjectural claims could not override the collective commercial decision of the CoC.

Reinforcing the principle of CoC supremacy, the tribunal held that the adjudicating authority cannot substitute its own wisdom for that of the CoC unless the decision violates the foundational principles of the IBC.

In a significant observation, the tribunal stated that the adjudicating authority “cannot over-reach its assigned role by assuming the role of being a moral guardian,” and held that the NCLT had exercised jurisdiction not vested in it by law, rendering its order coram non judice.

Accordingly, the NCLAT allowed the appeals, set aside the NCLT’s order appointing a different RP, and remanded the matter with directions to forward the CoC’s decision appointing Krit Narayan Mishra to the IBBI for confirmation under Section 27(4) of the Code.

Case Details:
Case: Subrata Roy & Ors. v. Rajiv Mohan & Ors.
Case No.: Comp. App. (AT) (Ins) Nos. 541 & 542 of 2026