2022 (4) TMI 880 - Tri - Insolvency and Bankruptcy

Levy of maximum penalty - initiating insolvency proceedings against the corporate debtor with a malicious intent for the purpose other than resolution of insolvency of the corporate debtor - seeking direction to respondents to cease and desist from causing disruptions in the functioning of the applicant/resolution professional - seeking direction to respondent to provide available evidence of collusion between the respondents No. 1-3 (Manish Soni, Pankaj Kumar Sahu and Vivek Kumar) - HELD THAT - It is a fact that the Respondent No. 1, Mr. Manish Soni has filed the Application under Sec. 9 of IBC for his 3 months' unpaid salaries amounting to ₹ 3,48,000.00 only calculated @ ₹ 1,16,000.00 per month and the corporate debtor remained absent in the proceedings allowing the petition to be admitted ex-parte but the RP's allegation against Respondent No. 1 that, he in collusion with respondent No. 2 and 3 and in connivance with the Suspended Board of Management, has initiated insolvency proceedings against the corporate debtor with a malicious intent for the purpose other than resolution of insolvency of the corporate debtor could not be proved with materials to the satisfaction of this Bench. It is found from the materials, papers, and submissions of the Transaction Auditor and the RP that the R6 7, Suspended Board of Management/Ex Directors are still not cooperating, as required under the code of the IBC, to the RP for completion of the CIRP in time. The RP in the meantime has filed other two IAs for preferential transactions and fraudulent trading or wrongful trading under the Sections 43 and 66 of IBC respectively. Hence the issues raised relating to the R6 R7 shall be disposed of along with these two IAs separately. There is no much substance left at this time to proceed further in the matter - Petition disposed off.

Issues Involved:
1. Allegations of malicious intent in initiating insolvency proceedings.
2. Disruptions caused by respondents to the functioning of the Resolution Professional (RP).
3. Collusion between respondents and the suspended directors.
4. Non-cooperation from suspended directors in providing necessary information.
5. Allegations against the erstwhile Interim Resolution Professional (IRP).

Issue-wise Detailed Analysis:

1. Allegations of Malicious Intent in Initiating Insolvency Proceedings:
The RP, Mr. Kamal Agarwal, filed an application under Section 65 of the IBC, 2016 against Manish Soni and others, alleging that the insolvency proceedings were initiated with malicious intent. The RP claimed that respondents No. 1 to 3 (Manish Soni, Pankaj Kumar Sahu, and Vivek Kumar) filed the insolvency petition not for the resolution of the corporate debtor but for other reasons. The RP stated that these respondents continuously harassed him with false accusations and disrupted the CIRP proceedings. However, the tribunal found that the RP's allegations could not be substantiated with sufficient evidence. Consequently, the tribunal declined the RP's prayer to impose penalties on respondents No. 1 to 3.

2. Disruptions Caused by Respondents to the Functioning of the RP:
The RP alleged that respondents No. 1 to 3 caused disruptions by making false accusations and sending numerous emails to various authorities to destabilize the CIRP process. The respondents, who were former faculty members of the corporate debtor, filed the insolvency petition due to unpaid salaries. They denied the RP's allegations, stating that their actions were not malicious but were attempts to recover their dues. The tribunal noted that the respondents' claims were only 3.75% of the total admitted debt and found no evidence of malicious intent. The tribunal warned respondents No. 1 to 3 against further harassment of the RP, stating that necessary proceedings would be initiated if such behavior continued.

3. Collusion Between Respondents and the Suspended Directors:
The RP and respondent No. 4 (Mr. Hemanta Kalita) alleged collusion between respondents No. 1 to 3 and the suspended directors (respondents No. 6 and 7). The RP claimed that respondents No. 1 to 3 were aware of the wrongdoings of the suspended directors but did not take any action until their termination. However, respondent No. 4 later clarified that his allegations were based on belief and understanding, not concrete evidence. The tribunal accepted this clarification and found no substantial evidence of collusion.

4. Non-Cooperation from Suspended Directors in Providing Necessary Information:
The RP reported that the suspended directors (respondents No. 6 and 7) were not cooperating in providing necessary information for the CIRP. The tribunal noted that the suspended directors had delayed providing the provisional balance sheet and other financial data. The RP had filed applications under Sections 43 and 66 of the IBC for preferential transactions and fraudulent trading. The tribunal decided to dispose of the issues related to the suspended directors along with these applications separately.

5. Allegations Against the Erstwhile IRP:
Respondents No. 1 to 3 alleged that the erstwhile IRP (respondent No. 5) was in collusion with the suspended directors. However, the tribunal found no evidence to support these allegations. The erstwhile IRP denied any collusion and stated that he did not oppose his replacement as the RP. The tribunal accepted the erstwhile IRP's reply and noted that there were no allegations against him.

Conclusion:
The tribunal disposed of the application with observations and directions. It declined the RP's prayer to impose penalties on respondents No. 1 to 3 due to insufficient evidence of malicious intent. The tribunal warned respondents No. 1 to 3 against further harassment of the RP. The issues related to the suspended directors would be addressed separately in the applications filed under Sections 43 and 66 of the IBC. The tribunal found no substantial evidence of collusion between the respondents and the suspended directors and accepted the erstwhile IRP's reply, noting no allegations against him.

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