2021 (5) TMI 678 - Tri - Insolvency and Bankruptcy

Seeking direction to Respondent to provide the Applicant with Accounting data from financial years 2013-14, 2014-15 - seeking to provide free and complete access to all the financial records of the Corporate Debtor, equipments and other assets without any hindrances from any one to protect the assets of the Corporate Debtor etc. - HELD THAT - It is settled position of law that once CIRP is initiated, all the personnel including Directors/MD of Corporate Debtor, have to extend necessary co-operation to IRP/RP in carrying out their duties. Since the Adjudicating Authority has already directed all the personnel of CD to extend full co-operation to the Applicant and the law is also clear on the issue, it is for the Applicant to discharge his duties effectively at the ground level, instead of rushing to the Tribunal raising all those issues which ought to be settled by himself, being experience Resolution professional. Therefore, the instant Application can be disposed of by directing the Respondent to extend necessary cooperation to the Applicant. Application is disposed of by the directing the Respondent to extend necessary co-operation to the Applicant in respect of CIRP of Corporate Debtor.

Summary

Issues:
1. Application seeking accounting data and access to financial records of Corporate Debtor.
2. Application seeking direction to restrict travel and deposit passport of Respondent.

Analysis:
1. The first issue pertains to I.A. No. 331 of 2020 in C.P.(IB) No. 52/BB/2017 filed by the Resolution Professional seeking accounting data and complete access to financial records of the Corporate Debtor. The Application requested the Respondent to provide accounting data from specific financial years and free access to all financial records and assets. The Respondent, alleged to be the Managing Director, failed to cooperate effectively in resolving the insolvency. The Tribunal emphasized the necessity for all personnel, including Directors, to cooperate with the Resolution Professional during the Corporate Insolvency Resolution Process (CIRP). It was concluded that the Respondent must extend necessary cooperation to the Applicant for the effective resolution of the insolvency, and the Application was disposed of accordingly.

2. The second issue revolves around I.A. No. 330 of 2020 in C.P.(IB) No. 52/BB/2017, where the Resolution Professional sought to restrict the travel of the Respondent and deposit his passport without prior permission. However, during the hearing, the Applicant expressed the intention to withdraw the Application. The Applicant filed a Memo for Withdrawal requesting the Tribunal to permit the withdrawal of the application in the interest of justice and equity. Consequently, the Tribunal allowed the withdrawal of the Application as requested by the Applicant, leading to the dismissal of I.A. No. 330 of 2020.