2021 (5) TMI 106 - Tri - Insolvency and Bankruptcy

Trespassing the property of Corporate Debtor as held by Liquidator - Case of appellant is that Police Authorities failed to provide sufficient security to the Liquidator - HELD THAT - It is surprising to see that the Police Authorities who are duty bound to protect the life and property of the citizens and prevent the crimes, have failed to provide sufficient security to the Liquidator in protecting the assets of the Corporate Debtor, by taking appropriate action against the miscreants and trespassers against whom complaints after complaints have been lodged by the Liquidator, which has encouraged them to repeat their illegal actions. The local Police should have acted quickly in the matter even on the first complaint which would have been caused a deterrent effect on the miscreants and their associates. The need to file the present application seeking directions from this Adjudicating Authority has arisen because the Police Authorities have not been able to help the applicant in spite of requests having been made to provide security to the Private Security Guards deployed by the Liquidator at the site of the factory to protect the properties of the Corporate Debtor (in Liquidation). It may be informed that the Liquidator has been performing his statutory obligations and the Police Authorities are supposed to provide him necessary help and protection. The respondents i.e., the Superintendent of Police, Purba Medinipur and Officer-in-Charge of Bhabanipur Police Station are directed to take immediate action against the miscreants who had trespassed the premises and caused fire or theft in the premises and a report in this regard shall be placed before this Adjudicating Authority through an Officer not below the rank of an Inspector of Police on the next date of hearing, i.e. 11.06.2021. Application listed for hearing.

Summary

Issues:
1. Condonation of delay in filing an application.
2. Seeking directions under section 60(5) read with Section 35 of the Insolvency and Bankruptcy Code, 2016 regarding protection of assets.

Condonation of Delay:
In the judgment, the Tribunal addressed an application, IA 400/KB/2021, filed for condonation of delay. The Liquidator had no objection to the delay being condoned. The Tribunal, after perusing the application, allowed the delay to be condoned and directed the filing of the claim form by a specified date. It was emphasized that the Liquidator should evaluate the claim on its merit without being influenced by the delay. Consequently, IA 400/KB/2021 was disposed of.

Seeking Directions for Asset Protection:
Another issue discussed was in relation to IA No. 414/KB/2021 filed under section 60(5) read with Section 35 of the Insolvency and Bankruptcy Code, 2016. The Liquidator sought directions against the Police Authorities due to incidents of trespassing and theft at the factory premises of the Corporate Debtor. The Tribunal noted the Liquidator's efforts to secure the premises through a security agency and the recurring incidents of miscreants entering the site. Despite complaints and requests for action, the local police failed to provide adequate security, leading to further incidents. The Tribunal expressed surprise at the lack of police action, emphasizing their duty to protect citizens' lives and properties. Consequently, the Tribunal directed the Police Authorities to take immediate action against the trespassers and submit a report through an Inspector of Police on the next hearing date. The necessity for the application arose from the failure of the Police Authorities to assist the Liquidator despite statutory obligations. The order directed the respondents to take necessary action to prevent further incidents and protect the assets of the Corporate Debtor.

In conclusion, the judgment addressed the issues of condonation of delay in filing an application and seeking directions for the protection of assets under the Insolvency and Bankruptcy Code, 2016. It highlighted the responsibilities of the Liquidator and the Police Authorities in safeguarding the assets of the Corporate Debtor. The Tribunal's order emphasized the need for immediate action by the Police Authorities to prevent further trespassing and theft incidents at the factory premises.