Appellate Tribunal’s judgment holding that an Insolvency Professional who was in service and getting pension from a financial creditor was disentitled to be a Resolution professional has been rejected by the Supreme Court. In an order passed by a 3-judge bench on 19th August, 2020, the Supreme Court has categorically held that the approach adopted by NCLAT is not correct “that merely Resolution Professional who remained in the service of SBI and is getting pension, was disentitled to be Resolution professional” .
The Court held that since the order of NCLAT does not reflect correct approach, the same shall not be considered as a precedent. Incidentally, following its own judgment, NCLAT, in another case, also followed it and removed another past banker who was drawing pension.
The Supreme Court judgment has come as huge relief for retired bankers who became worried as it severely affected their career as an Insolvency Professional. They can now join the party and share cake of responsibility as a Resolution Professional.
This judgment is a step in right direction but banks as financial creditors should give no preference to their employees in appointing them as Resolution Professionals. They are expected to allow equity and fair play. Merit should play a dominant role rather than doling favors for their own fraternity.