Finality of moratorium fund-restoration directions bars challenge; persistent non-cooperation in insolvency can justify costs.

A direction to restore corporate funds withdrawn during the CIRP moratorium, together with interest, was held not open to reconsideration in a later appeal because the issue had already attained finality and was barred by res judicata. The record also showed repeated failure by the suspended directors to furnish documents and comply with insolvency directions, which was treated as persistent non-cooperation and defiance of lawful orders. On that basis, the tribunal sustained the adverse directions, upheld the costs order, and treated the subsequent challenge as meritless and vexatious.

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Issues: (i) Whether the direction requiring the suspended directors to deposit the amount withdrawn during the moratorium, together with interest, could be reopened in the present appeal; (ii) Whether the appellants' continued non-cooperation justified the impugned directions and costs.

Issue (i): Whether the direction requiring the suspended directors to deposit the amount withdrawn during the moratorium, together with interest, could be reopened in the present appeal.

Analysis: The amount had already been directed to be deposited in earlier proceedings arising from withdrawal of corporate funds during the CIRP moratorium. That direction had attained finality, and the subsequent challenge over the same issue was held to be barred by res judicata. The prior order requiring deposit of the principal amount with interest had not been interfered with, and the liability to restore the amount to the corporate debtor remained undisturbed.

Conclusion: The challenge to the deposit direction was rejected and the issue was decided against the appellants.

Issue (ii): Whether the appellants' continued non-cooperation justified the impugned directions and costs.

Analysis: The record showed repeated failure to furnish documents and comply with earlier orders during CIRP and liquidation. The conduct was treated as persistent non-cooperation and defiance of lawful directions, and the present proceedings were characterised as frivolous and vexatious. In that backdrop, imposition of additional costs was considered warranted.

Conclusion: The finding of non-cooperation was upheld and the costs order was sustained against the appellants.

Final Conclusion: The appeal was found to be meritless, the impugned directions were maintained, and additional costs were imposed for abusive and repetitive litigation.

Ratio Decidendi: A direction to restore corporate funds withdrawn in violation of the moratorium, once final, cannot be reopened in a later appeal on the same issue, and persistent non-cooperation with insolvency proceedings may justify adverse costs.

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