2023 (8) TMI 1324 - AT - Insolvency and Bankruptcy

CIRP - Trespass on a property, allegedly owned by the corporate debtor - Non application of mind and without any evidence finding given that the Appellant has trespassed on the said property - violation of principles of natural justice - HELD THAT - A close perusal of the Impugned Order in respect of the furnishing of the original documents in possession in support of acquisition of land as appearing in the Audited Financial Statement shows that the Adjudicating Authority has only directed R-1 (Appellant) to provide all the original documents in his possession in support of acquisition of land as appearing in the financial statement of the liquidator. Such an order does not cause any prejudice to the appellant, but merely requires the appellant to produce original documents which may be in his possession in support of acquisition of said land. It is seen from the judgment in Shailesh Chawla and Ors. Vs. Vinod Kumar Mahajan and Ors. 2020 (9) TMI 947 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI that an application is placed on the promoters and personnel of the corporate debtor to cooperate with the Interim Resolution Professional (IRP) and help in timely completion of the resolution or liquidation process. The Impugned Order in both the appeals have been given to ensure that proper and adequate cooperation is rendered by the personnel, ex-promoters and directors of the corporate debtor to the Resolution Professional/Liquidator to ensure that the process of insolvency resolution or liquidation is completed in a timely manner, which is at the very heart of IBC. The Impugned Order does not give any finding regarding the ownership of the said property, but merely requires that the Appellant or any other person should not trespass on the property of the corporate debtor and status quo regarding the scheduled property should be maintained till the successful completion of the liquidation process - such an order does not cause any prejudice to the Appellant and merely requires him to maintain status quo. The question of his ownership or otherwise of the said land is not the subject of section 19 application filed by the liquidator. These appeals do not deserve to be admitted and are dismissed at the stage of admission.

Summary

Issues involved:
The issues involved in the judgment are related to two appeals filed by a shareholder and erstwhile Director of a company, aggrieved by the orders passed by the National Company Law Tribunal, Bengaluru Bench. The first appeal concerns trespassing on a property allegedly owned by the corporate debtor, while the second appeal is about non-cooperation with the Resolution Professional and the treatment of personal property as an asset of the corporate debtor.

CA (AT) (Ins.) No. 257 of 2023:
In this appeal, the Appellant challenges the order of the Adjudicating Authority regarding trespassing on a property owned by the corporate debtor. The Appellant alleges that the order was passed without proper application of mind and evidence, leading to a finding of trespassing without merit. The Appellant asserts that the property in question is his personal property and not an asset of the corporate debtor, thus contesting the basis of the order.

CA (AT) (Ins.) No. 261 of 2023:
This appeal revolves around the Appellant's alleged non-cooperation with the Resolution Professional and the treatment of his personal property as an asset of the corporate debtor. The Impugned Order restrains the Appellant from trespassing on the property of the corporate debtor and directs him to maintain status quo regarding the scheduled property until the disposal of the case. The order does not determine ownership but emphasizes the need for cooperation to ensure the successful completion of the liquidation process.

Key Details:
The Appellant provided relevant information to the liquidator but was still directed to produce original documents related to the land in question. The Adjudicating Authority emphasized the importance of cooperation with the Liquidator as per the provisions of the Insolvency and Bankruptcy Code, 2016. The judgment highlights the obligation of ex-directors to assist the Resolution Professional/Liquidator for the timely completion of insolvency resolution or liquidation processes. The Tribunal dismissed both appeals, stating they lacked merit and did not deserve admission.

Separate Judgment:
No separate judgment was delivered by the judges in this case.