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2022 (11) TMI 601 - Tri - Insolvency and BankruptcySeeking directions to all Directors as per signatory details available on the website of Ministry of Corporate Affairs (MCA) and Statutory Auditor of the corporate debtor to appear personally to provide requisite information, assistance and cooperation to IRP/RP - Section 19(2) of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - As per Section 19(1) of the Code, the suspended management is under obligation to extend all assistance and cooperation to the IRP/RP as required in managing the affairs of the company. Mr. Shri Krishna Kajaria - respondent No. 1 and U P Singh and Associates - respondent No. 2, Statutory Auditor of corporate debtor are directed to provide assistance as required by the IRP/RP and complete the process within three weeks from the date of this order, failing which the IRP/RP is at liberty to approach local police on the basis of this order and local police to render all necessary assistance to IRP/RP. In case of non-compliance, the IRP/RP is at liberty to move an appropriate application before this Adjudicating Authority. Application allowed.
Issues:
1. Application under Section 19(2) of the Insolvency and Bankruptcy Code, 2016 seeking directions for cooperation from Directors and Statutory Auditor of the corporate debtor. 2. Application under Section 19(2) of the Insolvency and Bankruptcy Code, 2016 seeking directions for cooperation from Directors of suspended board of corporate debtor for Liquidator. Issue 1: Application under Section 19(2) - Cooperation from Directors and Statutory Auditor The Tribunal dealt with an application filed by the Interim Resolution Professional (IRP) seeking directions for Directors and Statutory Auditor of the corporate debtor to provide necessary information and assistance. The IRP had made several attempts to contact the concerned parties but received no response. Despite issuing notices, the respondents did not appear. The Tribunal noted the obligation of the suspended management to cooperate with the IRP as per the Insolvency and Bankruptcy Code. Consequently, the Tribunal directed the respondents to provide the required assistance within three weeks, warning of police intervention in case of non-compliance. The IRP was granted the liberty to approach the Adjudicating Authority in case of further non-compliance, leading to the allowance and disposal of the application. Issue 2: Application under Section 19(2) - Cooperation from Directors of Suspended Board for Liquidator In a separate application, the Liquidator sought directions against the Directors of the suspended board of the corporate debtor for cooperation. The Liquidator highlighted the pending information required from the respondents for the smooth functioning of the Corporate Insolvency Resolution Process (CIRP). Despite issuing notices and reminders, the respondents failed to respond or provide the necessary details. The Tribunal observed the lack of interest from the respondents in defending the matter. Similar to the previous issue, the Tribunal emphasized the obligation of the suspended management to extend cooperation to the Liquidator. Consequently, the Tribunal directed the Directors to provide the required information and assistance within three weeks, allowing the Liquidator to seek police assistance in case of non-compliance. Additionally, the Liquidator was instructed to retrieve necessary information from the corporate debtor's systems and utilize digital forensic companies if needed. The non-compliance would empower the Liquidator to approach the Adjudicating Authority for appropriate action, leading to the allowance and disposal of the application. This detailed analysis of the judgment showcases the Tribunal's approach in addressing the applications under Section 19(2) of the Insolvency and Bankruptcy Code, emphasizing the importance of cooperation from the concerned parties for the effective resolution and liquidation processes.
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