2017 (12) TMI 1755 - Tri - Insolvency and Bankruptcy

Liquidation of defaulter company - a Prayer has been made that there is an apprehension that the Directors of the Debtor Company may leave the country and also dispose of the properties - HELD THAT - The interest of the Creditors as well as the interest of the other stake holders is required to be protected - As a consequence, the Directors are directed not to alienate or create any third party right in respect of the declared Assets of the Company and the Assets of the Directors. The Insolvency Resolution Professional can also ear mark and identify the undeclared property, if any, found to be purchased out of the siphoned money of the Company and thereupon on identification those properties shall also not be dealt with in any manner by the Directors of their Representatives till further Orders of this Bench - Considering the progress of the Insolvency Proceedings and the Reports submitted by the Insolvency Professional, this Bench is of One view that to protect the interest of all the stakeholders and also to facilitate the proceedings these persons should not be allowed to leave the country without prior permission of this Bench of NCLT, Mumbai. Application disposed off.

Summary

Issues:
Intervention petitions connected with the main petition under section 9 of the Insolvency & Bankruptcy Code; Liquidation of the defaulter company; Protection of creditors and stakeholders' interests; Prevention of directors from alienating assets; Identification and protection of undeclared properties purchased with siphoned money; Restriction on certain individuals from leaving the country.

Analysis:
The judgment pertains to a Miscellaneous Application related to Intervention Petitions connected with the main Petition filed under section 9 of the Insolvency & Bankruptcy Code. The Insolvency Resolution Professional expressed concerns that the Directors of the Debtor Company might leave the country and dispose of properties. The Miscellaneous Application was moved under section 33(1) of the Code for the Liquidation of the defaulter Company. The Tribunal, after considering submissions and case records, directed the Directors not to alienate or create third-party rights in the declared Assets of the Company and their own Assets to protect the interests of Creditors and stakeholders.

Furthermore, the Insolvency Resolution Professional was authorized to identify undeclared properties purchased with siphoned money, and such properties were also prohibited from being dealt with by the Directors or their Representatives until further Orders of the Bench. Specific individuals, including Mr. Omprakash Basantlal Goenka and others, were highlighted as potential flight risks to avoid Insolvency Proceedings. To safeguard stakeholders' interests and facilitate the proceedings, these individuals were restricted from leaving the country without prior permission from the NCLT, Mumbai Bench. They were required to submit their passports to the Registry or seek permission in case of emergencies.

The judgment concluded by disposing of the Miscellaneous Applications and noting that the entire proceedings, including the Petitions, were scheduled for a hearing on 08.01.2018. The decision aimed to ensure the protection of creditors, stakeholders, and assets while preventing potential flight risks from obstructing the insolvency process.