In Dheeraj Wadhawan v. The Administrator, Dewan Housing Finance Corporation Ltd., the National Company Law Appellate Tribunal, New Delhi Bench (NCLAT) determined that "supersession of directors" under the Reserve Bank of India Act, 1934 (RBI Act) is distinct from "suspension of directors" under the Insolvency and Bankruptcy Code, 2016 (Code), and that a "superseded director" on the vacation of office pursuant to supersession is neither entitled
In the instant case titled Dheeraj Wadhawan v. The Administrator, Dewan Housing Finance Corporation Ltd, the issue raised for clarification before the NCLAT was:
Is the vacancy done by the Board under section 45 absolute?
With regard to this issue, The NCLAT noted that the Board resigns from its position with finality after the RBI exercises its authority under Section 45-IE of the RBI Act. Furthermore, if these Board members are recruited at a later time, it will be considered a fresh appointment rather than a continuation of their previous roles as company directors. The Appellants' argument that the Board's powers may be suspended under Section 17(1)(b) of the Code may also have the "legal impact" of the aforementioned directors resigning is irrelevant in this case and serves only as a red herring because "suspension" and "supersession" are different legal notions.
The NCLAT further ruled that in Vijay Kumar Jain v. Standard Chartered Bank & others., no opinion was given about the right to notice and participation in CoC meetings for those who had already resigned from their directorships prior to the appointment of the interim resolution professional.
In addition, the "superseded" Board is not entitled to a copy of a resolution plan based on the aforementioned logic. The NCLAT did add, however, that the copy of the resolution plan that has been approved by the adjudicating authority cannot be viewed as a secret one. As a result, the resolution plan's certified copy can be issued in compliance with the applicable regulations upon final approval.
The NCLAT categorically stated that,
“At the outset, it is pertinent to note that in Vijay Kumar Jain v. Standard Chartered Bank & others., the Hon'ble Supreme Court was concerned with the extent to which Directors who had been suspended on the appointment of the Interim Resolution Professional, in that case, were entitled to participate in the meetings of the CoC. In other words, the said Directors' right to attend the CoC meetings was not under dispute but merely the width of their rights and whether the same included copies of the documents discussed at the CoC meetings".