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2022 (8) TMI 714 - Tri - Insolvency and BankruptcySeeking directions to Respondents No.1 and 2 to provide the accounting data record of the Corporate Debtor in soft data and physical record from 01.04.2014 till 31.03.2017 - Section 19(2) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - Even if the contention of the respondents that the accounting data has been corrupted is accepted, the hard copies of the same must be with the suspended management of the Corporate Debtor as it is required to be maintained for audit purposed. As per Section 19(1) of the Code, the suspended management is under obligation to extend all assistance and cooperation to the RP as required in managing the affairs of the company. Mr. Rajnishpal Singh Dhaliwal - respondent No.1 and Mr. Shivrajpal Singh Dhaliwal - respondent No.2, Suspended Directors of erstwhile Management of Corporate Debtor are directed to handover accounting data record of the Corporate Debtor in soft data and physical record from 01.04.2014 till 31.03.2017 to the RP and provide assistance as required by the RP within fifteen days from the date of this order, failing which the RP is at liberty to approach local police on the basis of this order and local police to render all necessary assistance to RP. Application allowed.
Issues:
1. Application filed seeking directions for accounting data records of the Corporate Debtor. 2. Non-cooperation by Respondents No.1 and 2 in providing accounting data. 3. Dispute over the availability of accounting data and its recovery. 4. Contention regarding the necessity of the origin of transactions for a detailed audit. 5. Obligation of suspended management to cooperate with the Resolution Professional. Analysis: 1. The Tribunal dealt with an application filed by the Resolution Professional under Section 19(2) of the Insolvency and Bankruptcy Code, 2016, seeking directions for the accounting data records of the Corporate Debtor from 01.04.2014 to 31.03.2017. The Resolution Professional had conducted an audit of transactions and required the data for the same. 2. The Resolution Professional alleged non-cooperation by Respondents No.1 and 2, who were the promoter directors of the Corporate Debtor. Despite repeated requests, the Respondents did not provide the accounting data, leading to suspicions of concealing illegal acts. The Tribunal noted the Resolution Professional's efforts to obtain the data and the lack of cooperation from the Respondents. 3. Respondents No.1 and 2 claimed that the accounting data was corrupted in one of the computers, making it unavailable. The Tribunal emphasized that even if the data was corrupted, physical copies should exist with the suspended management of the Corporate Debtor for audit purposes. The suspended management was obligated to assist the Resolution Professional as per Section 19(1) of the Code. 4. The Resolution Professional argued that the origin of transactions before 01.04.2017 was necessary for a detailed audit, especially for ongoing transactions. The Tribunal considered this argument and highlighted the importance of having access to complete accounting data for an effective audit process. 5. In the final decision, the Tribunal directed the suspended directors of the Corporate Debtor to provide the accounting data records in soft and physical form from 01.04.2014 to 31.03.2017 to the Resolution Professional within fifteen days. Failure to comply would allow the Resolution Professional to seek assistance from the local police. The Tribunal emphasized the suspended management's obligation to cooperate with the Resolution Professional and allowed the application while disposing of the matter.
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