2022 (3) TMI 598 - Tri - Insolvency and Bankruptcy

Seeking direction to ex-management to provide tally data with respect to working of the Corporate Debtor - HELD THAT - Upon looking at the balance-sheet for the year ending 2018-19, it is seen that the same has been signed by the Ex-Director on 15.05.2019. From this, it is very clear that the statement made by the Ex-Directors vide the present affidavit to the effect that tally data of the Corporate Debtor was stolen on 04.01.2019 is patently false and misleading as this Tribunal cannot believe that a balance-sheet for the year ending 2019 could have been made out without having access to the tally data of the Corporate Debtor for the entire financial year. Therefore, the submission made by the Respondents through the present affidavit is completely contradictory and not reliable at all. The 1 conduct of ex-management is very much within the purview of Section 34(3) of the Code read with Regulation 9 of the IBBI (Liquidation Process) Regulations 2016 - the present conduct of the ex-Management calls for appropriate action in terms of Section 70 of the IBC, 2016 - A fine of ₹ 5 lakhs is imposed on the Respondents (No. 1 2) in the present application - Let the matter be fixed on 12.04.2022.

Summary

Issues: Non-compliance with order to provide tally data, theft of macbook containing tally data, contradictory statements by ex-directors, obligation of ex-management to cooperate with liquidator, imposition of fine for misconduct, pending response from Resolution Professional.

1. Non-compliance with order to provide tally data:
The Tribunal noted that the ex-management, now represented by Respondent Nos. 1 & 2, failed to comply with the order directing them to provide tally data regarding the Corporate Debtor's workings to the Liquidator. Despite claiming to have handed over balance-sheets for multiple years, they failed to produce the required tally data, citing the theft of a macbook containing the data in January 2019.

2. Theft of macbook containing tally data:
The Respondent Nos. 1 & 2 claimed that the macbook containing the tally data of the Corporate Debtor was stolen in January 2019. However, the Tribunal found this claim contradictory as the balance-sheet for the year ending 2018-19 was signed by the Ex-Director in May 2019, implying access to the tally data for that year.

3. Contradictory statements by ex-directors:
The Tribunal deemed the statements made by the ex-directors regarding the theft of the tally data as false and misleading. The Tribunal highlighted the inconsistency in the ex-directors' claims, emphasizing the importance of accurate and reliable information in insolvency proceedings.

4. Obligation of ex-management to cooperate with liquidator:
Referring to Section 34(3) of the Insolvency and Bankruptcy Code and Regulation 9 of the IBBI (Liquidation Process) Regulations 2016, the Tribunal emphasized the obligation of ex-management to cooperate with the Liquidator. It stressed the importance of providing necessary information for the conduct of liquidation proceedings.

5. Imposition of fine for misconduct:
In light of the ex-management's failure to cooperate and the misleading statements made, the Tribunal imposed a fine of ?5 lakhs on Respondent Nos. 1 & 2. The Respondents were directed to make the payment to the Central Government within two weeks and file a compliance affidavit along with proof of payment within one week.

6. Pending response from Resolution Professional:
The Tribunal noted that the Resolution Professional had not yet responded to the directions given in a previous order. The Counsel was directed to file the response within two weeks, with a copy provided in advance to the other party for information, and the matter was scheduled for a further hearing on a specified date.

This comprehensive analysis of the judgment highlights the key issues addressed by the Tribunal and the actions taken regarding non-compliance, misleading statements, cooperation obligations, imposition of fines, and pending responses from involved parties.