2022 (3) TMI 1221 - Tri - Insolvency and Bankruptcy

CIRP - Failure to supply the requisite information to RP - Seeking directions upon the suspended Directors and the staffs/management personnel of the Corporate Debtor to extend all cooperation and provide all information with regard to the assets, books and records relating to the projects under-taken by the Corporate Debtor - HELD THAT - Without going into controversy as to what documents have been given or not given so far by the suspended Directors to the erstwhile RP, or the Liquidator, it is directed that in addition to the above email, the Liquidator shall immediately send further and final list of documents, if any required from the suspended members of the Board of Directors, within one week. The suspended members of the Board of Directors are directed to hand over and provide all the information mentioned in the said emails if not already sent within two weeks. There should not be any lapse on the part of the suspended Directors because any further delay will be taken as causing an intentional delay in the process of liquidation and would lead to serious consequences. However, if anything which is supposed to be in their possession but is not available, they will give an understandable justification therefore - application disposed off.

Summary

Issues involved:
Application under section 19(2) of the Insolvency and Bankruptcy Code, 2016 seeking directions for cooperation from suspended Directors and management personnel; Allegations of non-cooperation and threats by individuals claiming to be employees of the Corporate Debtor; Dispute regarding cooperation between Ex. Directors and Liquidator; Requirement of documents and information from suspended Directors for completion of liquidation process.

Analysis:
The judgment pertains to an application filed under section 19(2) of the Insolvency and Bankruptcy Code, 2016, seeking directions for cooperation and provision of information from the suspended Directors and management personnel of the Corporate Debtor. The applicant, the erstwhile Resolution Professional, requested assistance regarding assets, books, records, project details, pending projects, debts receivable, and related documents. Allegations of non-cooperation and threats by individuals claiming to be employees of the Corporate Debtor were raised, leading to the need for a court intervention to ensure the completion of the Corporate Insolvency Resolution Process (CIRP).

During the hearing, it was highlighted that the Ex. Directors were not cooperating with the Liquidator, while the suspended Directors claimed to have handed over possession of the registered office and all documents to the erstwhile Resolution Professional. A previous order by the Adjudicating Authority emphasized the duty of suspended Directors to provide necessary assistance to the Liquidator for the completion of the process. However, a dispute arose regarding the representation of facts, with the suspended Directors alleging misrepresentation by the Liquidator, leading to further complications in the proceedings.

Subsequently, a detailed list of required documents was sent to the suspended Directors by the Liquidator, including information on bank accounts, assets, liabilities, receivables, deposits, advances, statutory documents, and other relevant details crucial for the liquidation process. The court directed the Liquidator to send any additional document requirements within a week and instructed the suspended Directors to provide the requested information within two weeks to avoid intentional delays in the liquidation process. The judgment emphasized the importance of timely cooperation and warned of serious consequences for any intentional delays or lack of justification for missing information.

In conclusion, the court disposed of the application, providing specific directives for the submission of required documents and information by the suspended Directors within the specified timelines. The judgment aimed to ensure the smooth progress of the liquidation process by emphasizing the obligation of the suspended Directors to cooperate fully and transparently, without causing intentional delays or withholding essential information.