No Shortcuts Around the IBC: NCLT on Challenging the RP and Authorised Representative
The Insolvency and Bankruptcy Code, 2016 (“IBC”) rests on a fundamental principle: insolvency resolution is a collective statutory process, not a series of individual creditor proceedings. The decision by NCLT New Delhi Bench in Dr. Sudip Saran v. Narendra Kumar Sharma, RP of Spaze Towers Pvt. Ltd. & Anr. (2026) ibclaw.in3945NCLT reinforces this principle by underscoring the limits of individual creditor recourse against the conduct of the Corporate Insolvency Resolution Process (“CIRP”).
Background and Grievances
The applicant, a homebuyer who had booked a flat in a project developed by the Corporate Debtor, approached the Adjudicating Authority after possession remained undelivered and the Corporate Debtor entered CIRP. Although his claim was admitted, interest was excluded, which he alleged adversely affected his participation in the insolvency proceedings.
The applicant sought extensive reliefs, including a declaration that the CIRP was illegal and improper, the replacement of the Resolution Professional (“RP”) and the Authorised Representative(“AR”) of homebuyers, disciplinary proceedings against them, issuance of a fresh Form G, and a comprehensive transactional or forensic audit.
His principal allegations concerned lack of transparency, non-disclosure of notices, minutes and other material documents, and failure by the authorised representative to discharge duties under Regulation 16A(10) of the CIRP Regulations. He alleged that the RP and authorised representative had acted in collusion, effectively excluding him from discussions and decision-making.
The Adjudicatory Principle
The application was dismissed. The Adjudicating Authority emphasised that CIRP is a structured statutory process governed by the IBC. An individual creditor cannot bypass the prescribed framework and obtain orders that would effectively alter or reopen the CIRP merely on the strength of individual grievances.
The Tribunal highlighted the procedure under Section 27 of the IBC for removal of the Resolution Professional, which requires a resolution supported by at least 66% of the CoC’s voting share and subject to the written consent of the proposed RP. Thereafter, the name of the proposed RP is forwarded to the Adjudicating Authority, which in turn forward the same to the IBBI for confirmation.
Similarly, replacement of an Authorised Representative and appointment of another Insolvency Professional must comply with Regulation 16A(3A) of the CIRP Regulations, which says that financial creditors in the class representing to less than10% voting share may seek replacement of the AR with an Insolvency Resolution Professional of their choice by making a request to the Interim Resolution Professional or RP, who is required to circulate such request to the creditors in that class and announce a voting window for the purpose. In the present case, the applicant has approached the Hon’ble Tribunal without demonstrating that the statutory procedure has been complied with. Therefore, the Hon’ble rejected the prayer and stated that a statutory mechanism cannot be bypassed by invoking the inherent jurisdiction of the Adjudicating Authority.
The ruling should not, however, be read as conferring immunity on insolvency professionals against legitimate allegations of misconduct. Rather, it underscores that grievances must be pursued through legally recognised channels and cannot, by themselves, justify dismantling or reopening a collective insolvency process.
Conclusion
The key learning is that a genuine grievance does not automatically confer a right to reopen a statutory process. Under the IBC, individual concerns must be addressed through the mechanisms prescribed by law, without undermining the collective interests of creditors or the integrity of CIRP. For homebuyers and other creditors, the practical lesson is to pursue appropriate remedies through established statutory procedures rather than seek wholesale disruption of the insolvency process.
