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CS Professional · Insolvency and Bankruptcy - Law and Practice · Resolution Strategies (Elective 7.5)

In the CIRP of Kaveri Agro Ltd, the CoC with 100% voting shares present votes on replacing the RP appointed under section 22. 64% of voting shares vote in favour, with written consent from the proposed professional. Disciplinary proceedings are pending against the proposed professional. What is the position?

The replacement fails because section 27(2) requires 66% of voting shares, and only 64% voted in favour. Written consent of the proposed professional does not cure the shortfall, so the existing RP continues.

  1. AThe RP is replaced, as a simple majority suffices
  2. BThe RP is replaced because written consent was obtained
  3. CThe resolution fails because 66% of voting shares are required, and the existing RP continuesCorrect
  4. DThe Adjudicating Authority must replace the RP on its own

Explanation

Section 27(2) requires a vote of sixty-six per cent of voting shares, plus written consent of the proposed professional. 64% falls short, so the resolution fails and the existing RP continues. The pending disciplinary proceedings are a separate issue that would also keep the existing RP in place; they do not help the replacement.

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