Tribunal grants Resolution Professional's application against State Bank of India, suspends directors for Code compliance

The Tribunal granted the Resolution Professional's application for directions against State Bank of India and suspended directors of the Corporate Debtor under Section 60(5) of the Insolvency and Bankruptcy Code. The State Bank of India was directed to hand over assets and offices to the RP, with the RP taking custody of records in the directors' presence. Cooperation from the suspended directors was mandated, with provisions for contempt proceedings in case of non-compliance. The judgment aimed to facilitate a successful Corporate Insolvency Resolution Process by ensuring access to assets and disclosure of information, emphasizing compliance with the Insolvency and Bankruptcy Code.

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Issues:
Interlocutory Application under Section 60(5) of the Insolvency and Bankruptcy Code, 2016 for directions against State Bank of India and suspended directors of the Corporate Debtor.

Analysis:
The Resolution Professional (RP) filed an application seeking directions against State Bank of India and suspended directors of the Corporate Debtor. The RP requested orders for physical access to the registered office, handover of assets, and disclosure of details regarding the Corporate Debtor's property and records. The urgency of the matter was acknowledged due to the COVID-19 situation, leading to a hearing via Video Conferencing. While the RP and some respondents' counsels participated, others did not. The unique nature of the application involved the RP seeking possession of assets held by the State Bank of India and cooperation from the suspended directors for successful Corporate Insolvency Resolution Process (CIRP).

The RP argued that despite possession of certain property by the State Bank of India under the SARFAESI Act, the RP should have access to take custody of such property as per the Insolvency and Bankruptcy Code. The RP highlighted the lack of access to the Corporate Debtor's offices and records, hindering the CIRP process. The RP also faced non-cooperation from the suspended directors, leading to delays and the need for further directions. The State Bank of India expressed no objection to some of the RP's requests but cited the absence of a specific order for access to the Registered Office due to the litigious nature of the Corporate Debtor and its directors.

The Suspended Board of Directors emphasized the lack of available information and assets in their possession, shifting the focus to the State Bank of India for details on the Corporate Debtor's property and accounts. Despite readiness to assist, the Suspended Board of Directors highlighted the absence of relevant information with them. After hearing all parties, the Tribunal found the application against a CoC member unjust and emphasized the CoC's role in facilitating the RP's work efficiently. The Tribunal directed State Bank of India to hand over assets and offices to the RP, with the RP opening the office in the presence of directors to take custody of records. Cooperation from the suspended directors was mandated, with a provision for contempt proceedings in case of non-compliance.

In conclusion, the Tribunal issued specific directions to assist the RP in completing the CIRP successfully, emphasizing cooperation, access to assets, and disclosure of information. The judgment aimed to streamline the process, avoid litigation, and ensure compliance with the Insolvency and Bankruptcy Code.

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