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2022 (1) TMI 1286 - AT - Insolvency and BankruptcyViolation of principles of natural justice - Seeking participation in the CoC of DHFL - rejection by the Adjudicating Authority/NCLT holding that the Appellant is not entitled to attend the meetings of the Committee of Creditors as member of the erstwhile Board of Directors - Section 60(5) of the Insolvency and Bankruptcy Code, 2016. Is there a difference between the 'supersession of Directors' under the RBI Act and the 'suspension of Directors' under the Code? Whether a 'Superseded director', who had vacated office on supersession of Board under RBI Act, is entitled to the notice of CoC meeting and has the right to participate in the meeting of the CoC? HELD THAT:- The Resolution Plan deliberately deals with confidentiality provisions requiring all parties involved in the resolution process to keep the Information provided therein confidential. Further, the Appellant submitting that the Resolution Plan may become public after its approval by the learned tribunal does not justify overriding the confidentiality provisions. Allowing such parties to receive a copy of the Resolution Plan would not only jeopardise the revival and Resolution in the form of successful implementation of the Resolution Plan for the corporate debtor but also set a dangerous precedent where any party would seek a copy of the Resolution Plan that the COC has already approved - It is important to mention that CIRP Regulation 36(4) imposes a duty on the RP to share the Information Memorandum with the members of CoC after an undertaking of confidentiality of Information. However, the Appellants are not a member of CoC, and they have been removed from the erstwhile Board of DHFL and have vacated the office before initiation of CIRP of the Corporate Debtor. Therefore, they are not entitled to participate in the CoC meetings or share the documents. Section 45-IE (4)(a) of the RBI Act provides that upon making an order of supersession of the Board of Directors of a non-banking financial company, Director shall from the supersession of the Board of Directors vacate their offices. After vacation or removal from the office of the Director, the said person cannot claim their entitlement to participate in the CoC of the Corporate Debtor. A removed Director from the Board of Directors cannot interfere in the Company's affairs per contra a suspended Director always remains on the erstwhile Board of the Company and assist the IRP/RP as per requirement - the Appellant, erstwhile Directors, who have vacated the offices are also not entitled to share any document. However, the copy of the Resolution Plan after approval from the Adjudicating Authority can not be treated as a confidential document. Therefore, after final approval of the Resolution Plan, its certified copy may be issued as per Rules. The impugned Order needs no interference - Appeal disposed off.
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