Prosecution proceedings against sleeping directors for failure ...

Inactive Directors Face Legal Action for Non-Cooperation with Resolution Professional u/s 19 of Insolvency and Bankruptcy Code.

September 25, 2020

Case Laws     Insolvency and Bankruptcy     AT

Prosecution proceedings against sleeping directors for failure to assist RP - Non supply of Documents / Account Books - A mere running of the eye of the ingredients of Section 19 of the Code latently and patently imposes an obligation on the personnel and promoters of the ‘Corporate Debtor’ to extend all assistance and cooperation which the ‘Interim Resolution Professional’ will require in running / managing the affairs of the CD. In fact, the term ‘personnel’ is defined to mean the employees, directors, mangers, key managerial personnel etc., if any of the ‘Corporate Debtor’ and this is meant to render assistance to the ‘Interim Resolution Professional’ in carrying out his duties in an effective and efficacious manner. - Order of NCLT confirmed - AT

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