Electronic records and cloud services in insolvency must remain available to the liquidator for liquidation and cooperation duties.

Electronic records, books of account and financial statements maintained through cloud storage were treated as information needed for liquidation, and the Tribunal held that officers and personnel of the corporate debtor had to cooperate with the liquidator and provide access to all relevant documents and data. It further stated that IT/cloud services formed essential services during insolvency, so suspension or erasure of data during moratorium was not justified without using the insolvency claims process. The respondents were directed to supply the requested data and information, including financial statements for the relevant years, within three weeks.

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Issues: Whether the respondents were bound to hand over the corporate debtor's records, books of account, financial statements and related electronic data to the liquidator, and whether the cloud storage service could be treated as an essential service that ought not to have been suspended during the insolvency process.

Analysis: The application was filed by the liquidator under Section 60(5)(c) of the Insolvency and Bankruptcy Code, 2016 seeking directions for delivery of records and data necessary for conducting the liquidation. The Tribunal found that the corporate debtor's electronic data had been maintained through cloud storage and that information technology services fall within the category of essential services under Section 14(2) of the Insolvency and Bankruptcy Code, 2016 read with Regulation 32 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. It held that the IRP/RP was required to preserve essential services to maintain the corporate debtor as a going concern under Section 20 of the Insolvency and Bankruptcy Code, 2016, and that the service provider could not justify suspension and erasure of data during moratorium without resorting to the insolvency claims process. The Tribunal also held that the officers and personnel of the corporate debtor were obliged to cooperate and provide access to documents and records, including those maintained electronically, and that the liquidator was entitled to receive all relevant books, financial statements and supporting material.

Conclusion: The respondents were directed, individually or jointly, to provide all data and information sought by the liquidator, including the financial statements for the relevant years, within three weeks.

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