Suspended Board Can't Appoint Resolution Pro: NCLAT

A suspended board of directors has no power under the Insolvency and Bankruptcy Code to appoint a resolution professional or to replace an existing resolution professional, the National Company Law Appellate Tribunal (NCLAT) has held.

In a case involving SLO Industrial Ltd, the Chennai bench of the NCLAT consisting of M Venugopal and Kanthi Narahari said the power to do so has only been vested in the committee of creditors (CoC) and then the adjudicating authority.

The bench said under the IBC 2016, a suspended board did not have the power to remove an existing resolution professional (RP) and seek the appointment of another RP to manage the company through the bankruptcy process.


An adjudicating authority is to adhere to the procedural formalities which are mentioned in the IBC, depending on the controversies involved, it said.

An RP could be removed by the CoC with the members approving it with a 66% vote share, the NCLAT said.