Case Note & Summary
The appeal was filed against an order dated 10/09/2026, which removed the appellant from his position as a Bankruptcy Trustee and appointed Mr. Umesh Balaram Sonkar in his place. The appellant contended that the order was passed without a hearing, which unjustly cast aspersions on his conduct as a Bankruptcy Trustee, and argued that the procedure outlined in Section 145 of the Insolvency and Bankruptcy Code, 2016 was not followed. The respondents countered this assertion. The Tribunal noted that the appellant was not given an opportunity to explain his conduct, which constituted a violation of procedural fairness. Consequently, the Tribunal set aside the order and directed that the parties be heard afresh by the NCLT regarding the application I.A. No. 3923 of 2026, ensuring that all rights and contentions of both parties remained intact. The Tribunal scheduled a hearing for 28/09/2026 and disposed of all pending applications related to the case.
Headnote
A) Bankruptcy Law - Removal of Bankruptcy Trustee - Procedural Fairness - Insolvency and Bankruptcy Code, 2016, Section 145 - The appellant was removed as a Bankruptcy Trustee without being afforded an opportunity to explain his conduct, violating principles of natural justice. The court directed that the order be set aside and the parties be heard afresh by the NCLT, ensuring adherence to the procedure as per law. Held that due process must be followed in such removals (Paras 1-4).
Issue of Consideration
Whether the removal of the appellant as Bankruptcy Trustee was valid given the lack of opportunity to be heard.
Final Decision
The appeal was disposed of, the order dated 10/09/2026 was set aside, and the parties were directed to be heard afresh by the NCLT on I.A. No. 3923 of 2026 on 28/09/2026.
Law Points
- Bankruptcy Trustee removal
- procedural fairness
- opportunity to be heard
- adherence to statutory provisions
