2021 (3) TMI 1292 - Tri - Insolvency and Bankruptcy

Prayer for disbursal of amount deposited in the ESCROW account maintained with the Registry by the Operational Creditor to meet the preliminary expenses of the CIRP - HELD THAT - The prayer made in the IA should be allowed. Therefore, the Registry is hereby directed to disburse the amount of ₹ 2 Lakhs deposited by the Operational Creditor in the ESCROW account on 15/02/2021. This expenditure shall be subject to approval by CoC. Application disposed off.

Summary

Issues:
1. Disbursal of funds from an ESCROW account for CIRP expenses.
2. Access to books of account by the IRP from suspended Board of Directors.

Disbursal of funds from ESCROW account for CIRP expenses:
The judgment addressed an application filed by the Interim Resolution Professional (IRP) seeking the disbursement of funds amounting to ?2 Lakhs from an ESCROW account maintained by the Operational Creditor. The IRP had already incurred expenses during the Corporate Insolvency Resolution Process (CIRP) for public announcements and other related costs, which were approved by the Committee of Creditors (CoC). The CoC had also approved the IRP's remuneration. The total amount due and payable was ?2,03,796.00, covering two months of remuneration and CIRP costs. The Operational Creditor had deposited the requested amount in the ESCROW account as directed by the Adjudicating Authority. The judgment granted the IRP's request for disbursal, subject to CoC approval, emphasizing the necessity of utilizing the funds for CIRP expenses.

Access to books of account by the IRP from suspended Board of Directors:
Another issue addressed in the judgment was an application by the IRP against the suspended members of the Board of Directors of the Corporate Debtor, requesting access to the books of account. The counsel for the respondents assured that the necessary data would be provided to the IRP within 24 hours, without waiting for the order to be uploaded on the NCLT portal. The IRP was directed to send a soft copy of the list of required information to each respondent for their compliance. Any updates to the list were to be made by the IRP before sending it to the respondents. The respondents were given a 10-day deadline to supply the requested documents to the IRP. The matter was scheduled for further consideration on a specified date.

In addition, the judgment highlighted the lack of progress in the appointment of a Resolution Professional (RP) or the confirmation of the IRP as RP during the 4th CoC meeting. This observation indicated a procedural delay that needed to be addressed promptly to ensure the smooth continuation of the insolvency resolution process.