In a major setback to the Corporate Insolvency Resolution Process (CIRP) of M/s U.N. Automobiles Pvt. Ltd., the National Company Law Tribunal (NCLT), Jaipur Bench, has removed Mr. Satyendra Prasad Khorania as Resolution Professional (RP) over allegations of bias, conflict of interest, and violation of due process.
The removal order follows a writ petition filed by Advocate Rajesh Shah on behalf of suspended director Mr. Amit Prakash Gupta, who argued that Khorania’s past and continuing role as a recovery agent for Bank of Baroda, the sole financial creditor in the case, rendered him ineligible under the Insolvency and Bankruptcy Code (IBC), 2016.
Gupta alleged that Khorania’s association with Enforcement Affiliates Pvt. Ltd., a recovery agency empaneled by the bank since 2016, created a pecuniary relationship and conflict of interest, prohibited under Regulation 7A of the Insolvency Professional Regulations and the IBC Code of Conduct. Despite raising these objections before the NCLT through applications IA 599 and 600 of 2024, no timely adjudication was made, compelling Gupta to approach the Rajasthan High Court.
On March 26, 2025, the High Court directed the NCLT, Jaipur, to decide the applications within 15 days. However, Gupta contended that the RP continued with CoC voting and CIRP proceedings in violation of court directions.
In a strongly worded order on IA 600/2024, the NCLT Bench observed:
“Given the conduct of the present RP namely, Mr. Satyendra Prasad Khorania, this bench has lost complete faith and confidence in his working in the present CIRP of the Corporate Debtor as the Resolution Professional has miserably failed to follow the due process of law.”
Exercising powers under Rule 11 of the NCLT Rules, 2016, the tribunal replaced Khorania with Mr. Arvind Kaushik (IBBI Reg. No. IBBI/IPA-001/TP-P00291/2017-18/10535) and directed him to conduct the CIRP afresh, strictly adhering to statutory timelines.
The tribunal also held that IA 599/2024, which challenged the Bank of Baroda’s alleged inflated claim of over Rs. 250 crore, stood infructuous since the RP himself had been replaced.
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