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2019 (12) TMI 1354 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT - In the instant Application it is seen that the Interim Resolution Professional has acted as an extra constitutional Authority beyond the scope of the I B Code, 2106 as well as the Order passed by this Adjudicating Authority in terms of I B Code, 2016 thereby seriously undermining the CIR Process initiated by this Authority against the Corporate Debtor and rather subverting it. It is required to be noted that immediately after initiation of the CIR Process, it is the bounden duty on the part of the Interim Resolution Professional to issue paper publication calling for the claims from the Creditors in terms of Regulation 6 (1) of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Debtor) Regulations, 2016, within 3 days from the date of receipt of the copy of the Order and he cannot hold his hands from issuing the said publication under any circumstance. Since this Tribunal as Adjudicating Authority, does not have the power to take action against the Interim Resolution Professional/Resolution Professional/Liquidator, we are constrained to forward this Order along with MA/1327/2109 to the IBBI being the Regulator for a suitable action to be initiated against the Interim Resolution Professional as contemplated under the Scheme of the I B Code, 2016 and the Regulations framed there under by IBBI, as may be warranted in the circumstances. Registry is directed to communicate the IBBI for suitable and necessary action as against the Interim Resolution Professional.
Issues: Persistent default in remitting claim amount, non-compliance with directions by Interim Resolution Professional, exceeding powers under I&B Code, 2016, failure to issue paper publication for creditors' claims, subversion of CIR Process, action against Interim Resolution Professional.
In this judgment by the National Company Law Tribunal, Chennai Bench, the issue at hand was the persistent default by the Corporate Debtor in remitting the claim amount, leading to the initiation of the Corporate Insolvency Resolution Process (CIR Process) against them. An Interim Resolution Professional was appointed to oversee the process, with specific directions to comply with provisions of the Insolvency and Bankruptcy Code, 2016 (I&B Code, 2016), including issuing paper publication for creditors' claims within 3 days. However, the Interim Resolution Professional failed to comply with these directives and instead sought to settle the matter with the parties involved, exceeding his powers under the I&B Code, 2016 and the orders of the Adjudicating Authority. The Tribunal noted that the Interim Resolution Professional's actions were beyond the scope of his authority, undermining the CIR Process initiated against the Corporate Debtor. It emphasized that the Interim Resolution Professional is obligated to follow the provisions of the I&B Code, 2016 and the orders of the Adjudicating Authority, without deviating from them. The failure to issue the required paper publication for creditors' claims immediately after the initiation of the CIR Process was deemed a serious violation of the prescribed procedure, as outlined in the Insolvency and Bankruptcy Board of India Regulations. Furthermore, the Tribunal referenced the Supreme Court judgment in the case of Swiss Ribbons Pvt. Ltd. & Ors. Vs. Union Of India & Ors., highlighting that the Interim Resolution Professional's inherent powers do not exempt him from fulfilling his duty of calling for creditors' claims. The Tribunal cited a previous NCLAT decision to emphasize that while it lacks the authority to take direct action against the Interim Resolution Professional, the matter was forwarded to the IBBI for appropriate action as per the I&B Code, 2016 and the regulations set forth by the IBBI. Consequently, the Tribunal ordered suitable action to be initiated against the Interim Resolution Professional by the IBBI, underscoring the importance of adherence to the prescribed procedures in insolvency resolution processes.
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