During the NCLAT
proceedings, the lenders’ position was that while anyone after retirement could practise as a professional if qualified to do so, the person could not be assumed to be biased just because she or he happened to be a former bank official.
In its January 4 order in the State Bank of India vs Metenere case, the NCLT
said the resolution professional proposed by the lenders for Metenere had worked with State Bank of India for more than 39 years and there was “an apprehension of bias” against the appointment.
“It is evident that such an IRP is unlikely to act fairly and cannot be expected to act as an independent umpire,” the tribunal had observed.
Accordingly, the tribunal said the financial creditors must replace the person by a new one.
Legal experts say this order will have a wide-ranging impact and slow the resolution of some big-ticket cases including the ones of Videocon Industries, which owes banks Rs 40,000 crore, and Essar Projects, which has a debt of Rs 7,700 crore.
order would have put a question mark on several accounts where the IRP has been appointed and the resolution has reached an advanced stage,” said a corporate lawyer.
has seen the appointments of four IRPs, including those from Price Waterhouse, KPMG, and now Deloitte, which is managing the asset sale. Its debt resolution is going on since January 2018, when the RBI recommended Videocon on its second list of 29 companies
for debt resolution.