Tribunal Orders Cooperation for Insolvency Process, Warns of Contempt

The Tribunal directed the respondents to cooperate with the Resolution Professional by providing necessary information, documents, and assets within a specified timeline to ensure the timely completion of the Corporate Insolvency Resolution Process (CIRP). Failure to comply could result in contempt proceedings. The application was allowed, and specific directions were issued to the respondents without any costs, with instructions for prompt service of the order copies to both parties.

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Issues Involved:
Alleged non-cooperation by directors and auditor with the Resolution Professional in a Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016.

Detailed Analysis:

1. Application Alleging Non-Cooperation:
The Resolution Professional (RP) filed an application under Section 19(2) of the I&B Code, 2016, citing non-cooperation by the directors of the suspended board and the statutory auditor of the Corporate Debtor. The RP highlighted the urgency due to delays caused by the lockdown. The application was admitted for an urgent hearing.

2. Background and Non-Cooperation Details:
The Corporate Debtor, M/s. R.P. Info Systems Limited, was undergoing CIRP, and the RP faced challenges in collecting essential information, documents, and assets due to non-cooperation from the directors and the auditor. The RP emphasized the lack of cooperation in providing crucial records and assets necessary for the CIRP process.

3. Contentions and Submissions:
The RP's counsel outlined the assets and properties owned by the Corporate Debtor across various locations, emphasizing the non-handover of key documents and assets despite repeated demands. The Enforcement Directorate had attached assets, restricting their sale or transfer under the Prevention of Money Laundering Act, 2002.

4. Responses from Respondents:
The respondents, especially respondent no. 1, denied the allegations of non-cooperation, stating they had provided necessary documents and information. They claimed that RP failed to take necessary steps to obtain assets under ED's control. Respondents argued that RP's actions were merely delaying the process.

5. Court's Decision and Directions:
After hearing both sides, the Tribunal directed the respondents to cooperate with the RP by providing required information, documents, and assets within a specified timeline. Failure to comply could lead to contempt proceedings. The Tribunal emphasized the importance of cooperation to ensure the timely completion of the CIRP process.

6. Conclusion and Disposal of Application:
The Tribunal allowed the application, issuing specific directions to the respondents to assist the RP promptly. The order was disposed of without any costs, and the Registry was instructed to serve copies of the order to both parties promptly.

This detailed analysis encapsulates the key issues, contentions, responses, and the Tribunal's decision regarding the alleged non-cooperation in a CIRP, providing a comprehensive overview of the judgment.

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