Can NCLT appoint a Resolution Professional sans Creditor Committee’s vote?

The Hyderabad Bench of the National Company Law Tribunal (NCLT) may have just overstepped its powers today, by appointing a Resolution Professional (RP), not recommended by the Committee of Creditors (CoC), for a company under moratorium..Section 27 of the Insolvency and Bankruptcy Code, 2016 (IBC) provides for the procedure to be followed for the replacement of an RP. The power of the NCLT in this regard, is largely to act as a rubber stamp for substituting an RP that has secured more than 75% of the vote of CoC and approval of the Insolvency and Bankruptcy Board of India (IBBI)..Only in the event the recommended RP has disciplinary proceedings pending before the IBBI, will the incumbent RP continue to hold the position till another one is appointed..However, things took a bizarre turn today before Hyderabad Bench of the NCLT. The Financial Creditors of Deccan Chronicle Holdings Limited had sought to replace their RP KK Rao, and had held a vote to decide on his successor. None of the three candidates being considered secured the 75 % vote that would have made them an automatic choice..At this stage, according to sources, the Bench of Judicial Member Vittanala Rajeshwar Rao, and Technical Member Ravikumar Duraiswamy, took the unprecedented decision to appoint an outsider Dr. Mamta Binanni as the Insolvency Resolution Professional (IRP), purportedly for the reason that insolvency resolution process must continue..The question to be asked, however, was whether a person whose name had not been put forward by any creditor to the IBBI could be appointed an RP. The law does not explicitly prohibit the Bench from carrying out this function, but professionals who spoke with Bar & Bench felt that the NCLT presuming such omnibus powers in the realm of administrative functioning was inappropriate..(Read Order)