2017 (12) TMI 1651 - Tri - Insolvency and Bankruptcy

Ensuring RP Safety & Authority: Tribunal Orders Cooperation During Factory Visit

Punjab National Bank Versus Divyajyoti Sponge Iron Pvt. Ltd.

The Tribunal emphasized providing necessary assistance and security to the Resolution Professional (RP) during a factory visit, ordering law enforcement ... Prayer for passing necessary orders upon the Superintendent of Police Bankura as also the concerned police personnel in-charge of Mejia PS and/or the concerned local district administration to render all necessary assistance and security to the applicant/Resolution Professional - Held that:- From the date of appointment of IRP the management of the affairs of the corporate debtor shall vest in the IRP. Therefore, after initiation of Corporate Insolvency Resolution Process promoter-Director or any person has nothing to say during the period of moratorium. However, there is any violation of regulation, promoter-Director can challenge the Resolution Plan after the same is submitted - List it on 18/01/2018 for further order. Issues:1. Assistance and security to Resolution Professional for factory visit.2. Dispute over valuation process and site visit.3. Authority of Resolution Professional during moratorium.4. Corporate debtor's responsibility and cooperation.Analysis:1. The Tribunal addressed the issue of providing necessary assistance and security to the Resolution Professional (RP) for a factory visit. The RP filed a petition seeking orders for police assistance during the visit to the factory premises. The Tribunal acknowledged the need for security and ordered the Director General of Police, Superintendent of Police, and others to ensure effective assistance to the RP during the valuation process. Any interference would lead to action against the corporate debtor, emphasizing the importance of cooperation with the RP.2. A dispute arose regarding the valuation process and site visit, with the promoter-Director expressing reluctance and concerns about allowing access to the valuation team. The Tribunal clarified that during the Corporate Insolvency Resolution Process, the management vests in the IRP, and the promoter-Director has limited authority during the moratorium period. Any challenge to the resolution plan can be made post-submission. The Tribunal highlighted the necessity for cooperation and ordered the corporate debtor to facilitate the valuation process without hindrance.3. The Tribunal emphasized the authority of the Resolution Professional during the moratorium period, stating that the management of the corporate debtor's affairs lies with the IRP post-appointment. The Tribunal clarified that any violation of regulations could be challenged by the promoter-Director after the submission of the resolution plan. The judgment underscored the importance of allowing the RP to fulfill statutory duties without obstruction.4. Regarding the corporate debtor's responsibility and cooperation, the Tribunal addressed concerns raised by the corporate debtor's advocate about potential incidents during the valuation process. The Tribunal issued an order directing law enforcement authorities to provide assistance and warned against any interference in the RP's work. Non-cooperation from the corporate debtor could result in actions being initiated against them. The Tribunal stressed the necessity for the corporate debtor to cooperate fully with the Resolution Professional for a smooth resolution process.In conclusion, the Tribunal's judgment focused on ensuring the Resolution Professional's safety and authority during the valuation process, resolving disputes over site visits, clarifying the limitations of the promoter-Director during the moratorium, and emphasizing the corporate debtor's responsibility to cooperate with the resolution proceedings.