Court Order Allows Applicants Inclusion in COC Meetings for I&B Code Compliance

The Bench allowed the Application under Section 60(5) of the I&B Code, 2016, directing the Resolution Professional to include the Applicants in COC meetings for sharing essential information, including financials and assets, to facilitate the CIR Process efficiently. The Order aimed to support the preparation of the Information Memorandum and the pursuit of a viable Resolution Plan, emphasizing the importance of in-house democracy in appointing Directors representing shareholders' will and fiduciary duties.

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Issues:
Application under Section 60(5) of the I&B Code, 2016 for declaration as part of the Suspended Board of Directors, invitation to COC meetings, sharing COC meeting minutes and documents, and other orders.

Analysis:
The Applicants filed an Application under Section 60(5) of the I&B Code, 2016 against the Resolution Professional (RP) regarding M/s. RA-NI Precast Private Limited. The prayers included declaring the Applicants as part of the Suspended Board of Directors, inviting them to COC meetings, sharing COC meeting minutes and documents, and other necessary orders for justice. The Bench heard the Representatives for the Applicants and the Resolution Professional and examined the records.

The Applicants were appointed as Directors of the Company in an Extra-ordinary General Meeting (EoGM) where a resolution was passed with majority voting shares. However, one Director was absent, leading to a delay in filing the required Form DIR-12 with the RoC. The Applicants contended that as appointed Directors, they should be part of the COC to assist with business details, assets, and financial information disclosure.

The Resolution Professional argued that the matter was sub judice and the relief sought by the Applicants could not be granted at the current stage. However, he acknowledged the importance of the Applicants' cooperation in understanding the Corporate Debtor's business. The Applicants assured full cooperation if allowed to be part of the COC.

The Bench emphasized the importance of in-house democracy in appointing Directors who represent shareholders' will and fiduciary duties. It noted that hindering the rights of shareholders by any Director could disrupt the Company's operations. Considering the ongoing CIR Process and the need for the Applicants' assistance, the Bench allowed the Application, directing the Resolution Professional to include the Applicants in COC meetings for providing essential information.

The Order mandated the Resolution Professional to permit the Applicants to attend COC meetings and share all relevant information, including financials, assets, and receivables, to facilitate the CIR Process efficiently. This decision aimed to support the preparation of the Information Memorandum and the pursuit of a viable Resolution Plan. The Order was pronounced in the presence of the Representatives for the Applicants and the Resolution Professional.

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