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TMI Blog2023 (10) TMI 1119X X X X Extracts X X X X X X X X Extracts X X X X ..... e Appellants : Mr. Abhishek Anand and Mr. Sajal Jain , Advocates For the Respondent : Mr. Shrey Patnaik and Mr. Riturik Batra , Advocates JUDGEMENT NARESH SALECHA , MEMBER ( TECHNICAL ) 1. The present Appeal i.e., Company Appeal (AT) (Insolvency) No. 966 of 2022 has arisen from Impugned Order dated 07.06.2022 passed by the i.e., National Company Law Tribunal, New Delhi Bench, Court-III (in short Adjudicating Authority ). 2. The instant appeal has been preferred by Mr. Rahul Gupta Ms. Divya Gupta in the capacity of Members of the Suspended Board of Directors of the Corporate Debtor being Gem Batteries Pvt Ltd against order dated 07.06.2022 ( Impugned Order ) passed by the National Company Law Tribunal, New Delhi Bench - III in I.A. 1678 of 2021 in CP (IB) No. 921(ND) of 2020, thereby, allowing the Application under Section 19(2) read with Section 19(3) of the Code read with Rule 11 of the NCLT Rules, 2016. The Adjudicating Authority imposed a cost of Rs. 10,00,000/- each on the Appellants under Section 70 of the Code. It is the case of the Appellants that Adjudicating Authority while passing the Impugned Orders, failed to appreciate the fact that Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to the Respondent and imposed, a fine of Rs. 10,00,000/- on both the Appellants. The Adjudicating Authority held as under: - 14. The conduct of the respondents clearly shows that they no intention to provide their assistance to the liquidator in the liquidation process which falls within the purview of Section 70 of IBC, 2016, hence, we are inclined to take penal action against the respondents and hereby punish the respondent No. 1 and 2 with fine of Rs. 10,00,000/- (Rs. Ten Lakhs only) on each of the said respondents and same shall be deposited to the credit of Pay Accounts Officer, Ministry of Corporate Affairs, New Delhi in two weeks from the date of this order. It is further directed to suspended board of directors to provide all the information as sought by the applicant in paragraph 8 within one months. (Emphasis Supplied) 10. The Appellants submitted that the present Appeal be allowed on the grounds that the Impugned Order passed by the Adjudicating Authority is without jurisdiction and is in violation of the principles of natural justice. 11. It is the case of the Appellants that the Impugned Order is unreasoned order as the Adjudicating Authority erre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tset, the Respondent denied all the averment and submissions made in the Appeal. The Respondent stated that the instant Appeal filed by Appellants is gross abuse of process of law, mala-fide and devoid of any merit whatsoever and deserves to be dismissed with exemplary costs. 17. The Respondent submitted that the Impugned Order dated 07.06.2022 has been passed by the Adjudicating Authority due to repeated non-compliance and non- cooperation in CIRP by the Appellants despite repeated opportunities to the Appellants. It is the case of the Respondent that the Adjudicating Authority, while passing the Impugned Order, has not assumed the jurisdiction/power which was not available to the Adjudicating Authority. 18. The Respondent reiterated that the Appellants were given opportunity to explain the non- compliance but the Appellants kept changing their stand for non- compliance, therefore, the Adjudicating Authority was left with no other choice but to levy penalty on the Appellants in the interest of justice. 19. The Respondent submitted that this Appellate Tribunal, in the matter of Vikram Puri and Anr. vs Universal Buildwell Pvt. Ltd. held, while holding that issuing of non- b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in course of corporate insolvency resolution process. 70. (1) On or after the insolvency commencement date, where an officer of the corporate debtor (a) does not disclose to the resolution professional all the details of property of the corporate debtor, and details of transactions thereof, or any such other information as the resolution professional may require; or (b) does not deliver to the resolution professional all or part of the property of the corporate debtor in his control or custody and which he is required to deliver; or (c) does not deliver to the resolution professional all books and papers in his control or custody belonging to the corporate debtor and which he is required to deliver; or (d) fails to inform there solution professional the information in his knowledge that a debt has been falsely proved by any person during the corporate insolvency resolution process; or (e) prevents the production of any book or paper affecting or relating to the property or affairs of the corporate debtor; or (f) accounts for any part of the property of the corporate debtor by fictitious losses or expenses, or if he has so attempted at any mee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal. (Emphasis Supplied) 24. At first, we will like to go into the judgment referred by the Respondent delivered earlier by this Appellate Tribunal, in the matter of Vikram Puri and Anr. vs Universal Buildwell Pvt. Ltd. bearing Company Appeal (AT) (Insolvency) No.1018 of 2021, where, while holding that issuing of non- bailable warrant by the National Company Law Tribunal against the erstwhile directors for ensuring the compliance of the provisions of the Code fell within the ambit of Section 19 of the Code, observed that:- The Code empowers the Adjudicating Authority to take appropriate measures for ensuring compliance of the provisions of the Code and for ensuring that all personnel extend co-operation to IRP/ RP. Section 19 specifically empowers the Adjudicating Authority to issue appropriate direction for compliance. The facts and the ratio of the quoted judgment is different from the facts and the basis of the prayer of the present Appeal and therefore, the submissions of the Respondent on this account are not appreciable. 25. Now, we will examine the judgment quoted by the Appellants. The first case cited case in the matter of Vivek Prakash(Suspended ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itself or may ask the Insolvency and Bankruptcy Board of India or may authorise any person in terms of subsection (2) of Section 236 of the 'I B Code' to file complaint. ( Emphasis Supplied ) 27. The Appellants also brought to our notice yet another earlier decision of this Appellate Tribunal in the matter of in the matter of Union of India v. Maharashtra Tourism Development Corporation [(2019) SCC OnLine NCLAT 1414], wherein this Appellate Tribunal had referred the matter to Central Government for investigation through Inspector(s) for finding out whether persons related to the company in question has violated the provisions of Section 70 of the Code, further directed that the procedures under Section 213 of the Companies Act, 2013 has to be followed. 28. Our attention has been drawn to the decision of this Appellate Tribunal in the matter of Vikram Puri v. Universal Buidwell (P.) Ltd. [(2022) SCC OnLine NCLAT 306], where this Appellate Tribunal has observed that the prosecution under Section 70 of the Code is a separate and independent proceedings, which in no manner fetter power upon the Tribunal to invoke the Section 70 of the Code. 29. We will also ..... X X X X Extracts X X X X X X X X Extracts X X X X
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