TMI Blog2022 (4) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Resolution Professional had brought to the notice of the members of CoC that information such as audited financial statements of Corporate Debtor for the years 2019, 2020 and provisional balance sheet as on the Insolvency Commencement date i.e. 18.01.2021 for preparation of Information Memorandum were not furnished and the Director of the Suspended Management Shri L.N. Sharma assured that he will arrange within 3 days. However, as there was no compliance, the CoC in its next meeting dated 14.06.2021, once again took up the same issue. Pursuant thereto, Shri L.N. Sharma, the Director of Ex-Management requested for two weeks' time to furnish all the details. But, once again he defaulted in complying his own undertaking, hence the issue of non-furnishing of the records once again came up before the CoC in its meeting dated 23.07.2021. The Director of the Corporate Debtor, though assured to deliver the relevant records to the IRP, never kept his undertaking. Thus, breach of sub-section (1) of Section 19 is as clear as crystal, as such it is certainly open to the IRP to make an application to the Adjudicating Authority for necessary directions. In the instant case, this Adj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the suspended management are duty bound under the law to cooperate the RP and to hand over all the documents and papers for successful completion of CIRP. We direct them to handover required documents and papers to the RP within three days from today. In case of their failure RP may approach local police to assist the RP. With this I A No. 326/2021 is allowed and stands disposed of . 4. The grievance of the Applicant is that the above order was passed by the Tribunal on the date when the application filed by Respondent i.e. IA 326/2021 was listed for the first time before the Tribunal, that too without issuing notice to the Applicant and without affording an opportunity to the Applicant, which according to the Applicant is in violation of the Principles of Natural Justice. 5. The Applicant emphasized the establishment of NCLT under Section 408 and further states that as per Section 424 of the Companies Act, 2013 and NCLT Rules, the Tribunal is bound to observe the principles of natural justice in the proceedings before it but the Tribunal failed to issue notice to the opposite party when an application or petition is presented before it by a party, as per Rule 3. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lution Professional has referred to the judgement of Hon'ble NCLAT in the matter of Ajay Kumar vs Shree Sai Industries Pvt. Ltd. and Anr. (Company Appeal (AT) (Insolvency) No. 616 of 2019, wherein it has held at It is needless to say that if the Promoters do not cooperate and hand over the necessary documents and information, the Adjudicating Authority will take the help of Superintendent of Police of the concerned area to ensure that the possession of the ''Corporate Debtor and all the records are handed over to the Resolution Professional and, if necessary, take criminal action against the promoters . 11. It is contended that the suspended management has to follow the main aim and object of Section 19 of the Code which is to aid the smooth resolution process. It is contended that when the Tribunal passed the order without considering the allegations against the erstwhile management since co-operation by them was must and necessary not only as per provisions of the Code but also the same is in with the aim and object of the Code. The Resolution Professional had made it evident in the 2nd and 6th CoC that an application would be moved for non-cooperation by the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling of this Application, non-cooperation by Ex-Management has been discussed and the Director of the Suspended Management Mr. L.N. Sharma (Applicant herein) though had assured to hand over the records and to furnish relevant information to the Resolution Professional, has failed, hence the CoC insisted the Resolution Professional, to file the present application. 17. In the light of the contest as afore-stated, it would be essential to refer to Section 19(2) of IBC, which is as follows:- Where any personnel of the corporate debtor, its promoter or any other person required to assist or cooperate with the interim resolution professional does not assist or cooperate, the interim resolution professional may make an application to the Adjudicating Authority for necessary directions . Thus, it is clear from the provision above that the Ex-Management shall be bound to co-operate with the Resolution Professional, enabling the Resolution Professional to carry out and complete the resolution process, which is time bound and in the event of non-1 cooperation by the Corporate Debtor, its promoters or any other person associated with the management of Corporate Debtor, the Resolut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as crystal, as such it is certainly open to the IRP to make an application to the Adjudicating Authority for necessary directions. In the instant case, this Adjudicating Authority, having found proof of non-cooperation by the Ex-Management, without going into the allegations, placing reliance on sub-section (1) of Section (19), passed a direction to hand over all the records and papers to the IRP, enabling successful completion of CIRP within the timeline. In passing such an order, there is no violation of principles of natural justice. On the other hand, there is clear violation of mandatory duty cast upon the ex-management in terms of Section 19(1) of IBC. 21. It is strange that the Applicant, though stated in this Application that he has been cooperating with the IRP, not even a scrap of record has been filed showing compliance of any of the requests of Resolution Professional. 22. It may be stated that the procedure of adjudication under IBC recognizes sending of notices by way of emails. Here, copy of email dated 03.07.2021 filed by the Respondent discloses the Application has been sent. The Applicant has not disputed the email ID to where the notice has been served. We ..... X X X X Extracts X X X X X X X X Extracts X X X X
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