TaxTMI 
TaxTMI 
2020 (9) TMI 947
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.... (AT) (Insolvency) No. 572 of 2020 The Appellants (Respondent Nos. 1,2,3) have filed the present Appeal being dissatisfied against the Impugned Order dated 23.03.2020 in CA 3/2019 in CP (IB) No. 70/Chd/Hry/2018 passed by the Adjudicating Authority ('National Company Law Tribunal') Chandigarh Bench, Chandigarh. 2. The 'Adjudicating Authority' ('NCLT') Chandigarh Bench while passing the impugned order dated 23.03.2020 at paragraph 13 to 16 had observed the following: - "13 The default of the Respondents No. 1 to 5 in complying with the provisions of Section 19 of the Code is clearly evident from the affidavit filed by the Applicant vide Diary No. 6301 dated 13.11.2019 Supra and the failure of the respondents to furnish the documents / records as mentioned in para 4 of the said affidavit except the balance sheets for the years 2014-15, 2016-17 and 2016-17. The default is accepted in the replies filed by the respondents to show cause notice. However, the respondents no. 1 to 3 have submitted that they are not in a position to provide the information required by the RP since the administrative office of the Mahabir Techno was taken over by the Union Bank of India. Respondents No. 1 ....
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....y directions from the 'Adjudicating Authority' in respect of the former Directors of the Company to furnish all the requisite 'Books', 'Financial Data', 'Information', 'Returns' and the Assets to the Resolution Professional. 5. It is represented on behalf of the Appellants that the Impugned Order passed by the 'Adjudicating Authority' is in violation of the 'Principles of Natural Justice'. In this connection, it is the submission of the Learned Counsel for the Appellants that against the Appellants no such specific allegations were made in the application filed by the Resolution Professional under Section 19 (2) of the I&B Code. Also, that there was no specific averment that the first Respondent/Resolution Professional had ever contacted the Appellants. In fact, the averments in the application relating to the non-cooperation by the members of the former 'Board of Directors', were general in nature and further the First Respondent never contacted the Appellants. This is clear from the fact he had not chosen to even find out the address and the status of the Appellants from the MCA Website, while filing the Application shows that the said Application was not filed in bona fide mann....
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....considered by the 'Adjudicating Authority' as well as by the Hon'ble High Court under 'FERA' proceedings and that the Hon'ble Supreme Court while allowing the 'Appeal' had set aside the penalty imposed on the director for an alleged offence under Section 8(3) and 8(4) and Section 68 of 'FERA'. In short, the Hon'ble Supreme Court, according to the Appellants had, observed that the non-consideration of written representation makes the personal hearing and 'empty formality' and the written representation should have been considered. 10. Continuing further, the Learned Counsel for the Appellants refers to the Judgement in aforesaid 'Shailendra Swarup' case and points out that Hon'ble Supreme Court considered the imposition of penalty under 'FERA' when all the Directors of the Company that the Management of the Company is to be handled, by the 'Board of Director' and hence the Appellant in that case being a Director was held guilty without considering the fact that the Appellant is part time Non-Executive Director and in fact, the Hon'ble Supreme Court held that the provisions cannot be read to mean that whosoever was the Director of the company at the relevant time, when contravention....
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....f the 'Corporate Debtor' came to halt. Also, it was stated that the 'Books of Accounts' of the Company prepared up to the 31.03.2017 was already handed over to the 'Resolution Professional' by the 'Chartered Accountant' of the 'Corporate Debtor'. Furthermore, the possession of the 'Assets' was taken over by the 'Union Bank of India' on 05.10.2018, under SARFAESI Act and all the documents/accounts which were lying in the administrative office were also taken over etc. 16. The Learned Counsel for the Appellants takes a plea that the Appellants had taken specific stand in their Affidavit that there was no 'deliberate intention' on their part not to co-operate with the 'Resolution Professional' and in fact, the 'Adjudicating Authority' was duty bound to consider the submissions and render a proper reasoning for not accepting the same, especially in the light of the fact that these averments made in the Affidavit were not repudiated by the first Respondent, by filing any rejoinder. As such, the impugned order suffers from legal infirmity. 17. The Learned Counsel for the Appellants brings it to the notice of this Tribunal that the 'Union Bank of India' was not impleaded as a necessary ....
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....ments except the balance sheet for the year 2014-2015, 2015-2016, 2016-2017 on account of the fact that the administrative office of the 'Corporate Debtor' by the Union Bank of India. The ingredients of the 'I&B' Code are silent on the jurisdiction of the 'Adjudicating Authority' to pass any order for recommending the matter to the 'Insolvency & Bankruptcy Board' to consider the matter in initiating the criminal action u/s 70 r/w Section 236 of the Code. 21. The stand of the Appellants that the books of accounts were lying in the administrative office of the 'Corporate Debtor' situated in the factory premises when the factory was taken over by 'Union Bank of India' on 05.10.2018 is supported by the fact that ex-directors of the company were made to sign blank panchanama. The Pleas of the Respondent No. 1 - (In Both Appeals) 22. The first Respondent was appointed as an 'Interim Resolution Professional' by the Adjudicating Authority and later, the first Respondent was appointed as the 'Resolution Professional' by the 'Committee of Creditors' as per resolution dated 29.11.2018. As a matter of fact, the 'Corporate Insolvency Resolution Process' resulted in the order for liquidation ....
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....iled to furnish any records and as per letter dated 04.11.2019 furnished a reply stating that 'the management and control of 'Corporate Debtor'/Company was in complete charge of Sh. O.P. Khurana was the Chairman-cum-Managing Director of the Company and was running the show solely and the remaining 'Suspended Directors' were merely 'Sleeping Directors' have no role or say in the day to day affairs, management and conduct of the company. In short, the Appellants in the reply dated 04.11.2019, had proceeded to state that they were not in capacity to provide the documents, information sought for in the notice dated 12.10.2019, but to pursue with Sh. O.P. Khurana to provide the same. 27. The 'Adjudicating Authority' on 03.02.2020, had issued notice to all the Respondents to show cause why the matter shall not be referred to the 'Insolvency and Bankruptcy Board of India' to enable the Board, to act in terms of Section 236 read with Section 70 of the Code. Further, the Respondents No. 1to 5, were given the option to file any further reply in response to the show cause notice issued within two weeks after service on the other side. Indeed, the Appellants, had filed a reply mentioning that....
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....ubmitted, upon which 'IBBI' has to act independently and the impugned order was passed after providing due opportunity and consideration of all relevant material on record. 32. The Learned Counsel for the 1st Respondent while summing up points out that the instant 'Appeals' are devoid of any merits and the same is liable to be dismissed. Discussions 33. It comes to be known that the 1st Respondent / Resolution Professional filed CA No. 3/2019 in CP (IB) No. 70/Chd/Hry/2018(under Section 19 of the 'I&B' Code) r/w relevant Rules and Regulations seeking directions to the 'effect' that the 'Members of the Suspended Board of Directors' of the 'Corporate Debtor' and their 'Associates' be directed to submit / hand over all the requisite books, financial debtor, returns and assets to the 'Resolution Professional' immediately and also provide necessary assistance/cooperation in smooth conduct of 'Corporate Insolvency Resolution Process'. 34. It is the stand of the 1st Respondent that in the 1st meeting of the 'Committee of Creditors' the 'Minutes' were recorded as under: - "Resolved that in case the requisite books, financial debtor, information, return etc. are not handed over by pro....
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....tention to do so pertaining to the state of affairs of the 'Corporate Debtor'. A determination of guilt must depend on a conclusion arrived at by balancing the consideration of a presumption of innocence and a reverse onus of proof as per decision 'R' v. 'Richmond Magistrates' Court reported in (2008) 3 All England Reporter page 274 (ChD). 39. In so far as Section 236 of the 'I&B' Code is concerned, it speaks of 'Trial Of Offences' by 'Special Court'. In reality, no 'Court' shall take cognisance of any offence punishable under this Act save on a complaint made by the 'IBBI' or the Central Government or any person authorised by the Central Government in this behalf. To put it precisely, for prosecution of offences under the 'I&B' Code, lodging of complaint by the 'IBBI', the Central Government or any other officer authorised by the Central Government in this behalf is required. Independent Director 40. In so far as the 'Independent Director' is concerned, the burden of proof to establish that act of commission or omission by a company which are contrary to Law was carried out without his knowledge lies on the 'Independent Director'. Continuing further, an 'Independent Director' a....
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....nts, to show-cause as to why the matter shall not be referred to the IBBI to enable the Board to act in terms of Section 236 r/w 70 of the 'I&B' Code. The Respondents 1 to 5 CA No. 03/2019 were given the opportunity to file any further reply in response to the show-cause notice within two weeks after service to the other side. 44. The Appellants, to the show-cause notice had filed a reply reiterating that on 05.10.2018 the possession of the assets of the Company were taken over by the Union Bank of India under SARFAESI Act etc. Further, the reply of the Appellant(s) proceeded to state that the administrative office of the 'Corporate Debtor' / Company was within the premises which was taken over by the Bank, and hence, they were left with nothing much to hand over to the 'Resolution Professional' etc. Only after providing adequate opportunities to the Appellant(s) the impugned order, in the considered opinion of this Tribunal came to be passed by the Adjudicating Authority'. As such, the contra pleas taken on behalf of the Appellant(s) is not accepted by this Tribunal. 45. In regard to the plea taken on behalf of the Appellants that the general circular no. 01 of 2020 dated 02.03.....