2022 (3) TMI 113 - Tri - Insolvency and Bankruptcy

Floutation with the orders of Adjudicating Authority with impunity - Respondents/the Members of the suspended Board of Directors have been successfully avoiding the compliance of the orders directly or indirectly - handing over of possession of requisite information and documents - HELD THAT - Since, there is no registered office of the Corporate Debtor, these respondents/Directors shall hand over all the 'Books of Accounts' which shall include but are not limited to sales register, purchase register, Journal, ledgers, cash book as defined in section 2(13) of the Companies Act, 2013, need to be handed over, stored and delivered at the factory premises. The 'Books of Accounts' in Tally format may be specifically directed to be made available at the factory premises. It is further ordered that for ensuring that the Corporate Debtor runs as a going concern, the designated person who has been mentioned as a responsible person under the Pharmacy Act, 1948 or the Drugs and Cosmetics Rule, 1945 or any other relevant Act, for running this pharmaceutical company needs to be identified. The said person may also be directed to cooperate with the liquidator to maintain the continuing operation of the Corporate Debtor. The Deputy Commissioner, Parnashree Police Station, Kolkata, West Bengal to provide necessary police assistance to the liquidator, who is an officer of the court and is performing his statutory duties under section 35(1)(b) of I B Code, 2016, as per the orders of National Company Law Tribunal, Kolkata. The Police Officer/official deputed for the purpose, shall not allow any hindrance or obstruction to be caused in the working of the liquidator - List the matter on 19/04/2022 for filing of Progress Report.

Summary

Issues:
Non-compliance of orders by the suspended Board of Directors regarding liquidation process and possession of assets.

Detailed Analysis:
1. The case involved the suspended Board of Directors of a Corporate Debtor failing to comply with orders related to the liquidation process. The Adjudicating Authority expressed concern over the blatant disregard of its orders by the respondents.

2. The background of the case included the Financial Creditor initiating Corporate Insolvency Resolution Process against the Corporate Debtor. Specific directions were given to the Directors to cooperate with the Liquidator for managing the liquidation process, including providing necessary documents and information within specified timelines.

3. Despite repeated directives, the suspended Board of Directors continuously evaded compliance with the orders. The Liquidator highlighted the respondents' failure to provide essential documents and information, hindering the liquidation process.

4. The Adjudicating Authority issued multiple orders instructing the Directors to hand over possession of assets and documents, but these directives were consistently ignored. The Liquidator faced obstruction from the Directors and employees at the factory premises, further complicating the situation.

5. The judgment mandated the immediate handover of assets, including immovable properties, vehicles, machinery, and office equipment. The Directors were also directed to provide all necessary books of accounts in Tally format to facilitate the liquidation process.

6. To ensure the Corporate Debtor's continuity, a responsible person under relevant Acts was to be identified to cooperate with the Liquidator. Police assistance was ordered to prevent any hindrance to the Liquidator's duties, with strict consequences for non-compliance.

7. The Liquidator was instructed to fulfill statutory duties under the Insolvency and Bankruptcy Code, with the Police Commissioner directed to provide necessary support. The order was disposed of with detailed compliance instructions and a future progress report date set.

This detailed analysis outlines the key issues of non-compliance by the suspended Board of Directors and the subsequent legal actions taken by the Adjudicating Authority to ensure adherence to the orders related to the liquidation process and asset possession.