Directors Barred from Asset Disposal, Travel Restrictions Imposed to Safeguard Creditors

The Tribunal, in a case concerning Intervention Petitions linked to the main Petition under section 9 of the Insolvency & Bankruptcy Code, directed the Directors of the Debtor Company not to dispose of assets to safeguard creditors and stakeholders. The Insolvency Resolution Professional was tasked with identifying undeclared properties bought with siphoned funds, prohibiting their disposal. Specific individuals, including Mr. Omprakash Basantlal Goenka, were barred from leaving the country without NCLT permission. The decision aimed to protect stakeholders and assets, ensuring a smooth insolvency process.

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Issues:
Intervention petitions connected with the main petition under section 9 of the Insolvency & Bankruptcy Code; Liquidation of the defaulter company; Protection of creditors and stakeholders' interests; Prevention of directors from alienating assets; Identification and protection of undeclared properties purchased with siphoned money; Restriction on certain individuals from leaving the country.

Analysis:
The judgment pertains to a Miscellaneous Application related to Intervention Petitions connected with the main Petition filed under section 9 of the Insolvency & Bankruptcy Code. The Insolvency Resolution Professional expressed concerns that the Directors of the Debtor Company might leave the country and dispose of properties. The Miscellaneous Application was moved under section 33(1) of the Code for the Liquidation of the defaulter Company. The Tribunal, after considering submissions and case records, directed the Directors not to alienate or create third-party rights in the declared Assets of the Company and their own Assets to protect the interests of Creditors and stakeholders.

Furthermore, the Insolvency Resolution Professional was authorized to identify undeclared properties purchased with siphoned money, and such properties were also prohibited from being dealt with by the Directors or their Representatives until further Orders of the Bench. Specific individuals, including Mr. Omprakash Basantlal Goenka and others, were highlighted as potential flight risks to avoid Insolvency Proceedings. To safeguard stakeholders' interests and facilitate the proceedings, these individuals were restricted from leaving the country without prior permission from the NCLT, Mumbai Bench. They were required to submit their passports to the Registry or seek permission in case of emergencies.

The judgment concluded by disposing of the Miscellaneous Applications and noting that the entire proceedings, including the Petitions, were scheduled for a hearing on 08.01.2018. The decision aimed to ensure the protection of creditors, stakeholders, and assets while preventing potential flight risks from obstructing the insolvency process.

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