2022 (2) TMI 626

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....mar Pandey, Advocates for R-3 JUDGMENT ( Virtual Mode ) { Per : Dr. Alok Srivastava  , Member ( Technical ) } This appeal has been filed by the Appellants under section 61 of the Insolvency and Bankruptcy Code 2016 (hereafter called "IBC‟) assailing the order dated 9.11.2020 (hereafter called "Impugned Order‟) passed by the Adjudicating Authority in IA No. 1253/2020 in IB-643/(ND)/2018. The Appellants are ex-directors of the suspended board of E-Z Barter Private Limited (corporate debtor) and Respondent No.1 is a limited company which is an operational creditor of the corporate debtor. 2. The case, as stated by the Appellant, is that an application under section 9 of IBC was admitted vide order of the Adjudic....

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....s invoked section 128 (6) of the Companies Act and levied penalty of Rs. Five lakhs each on the Appellants No. 1 and 2 and hence the Appellants have filed this appeal praying for setting aside of the impugned order. 4. In view of the fact that the corporate debtor is in liquidation, this tribunal ordered on 23.2.2020 to join the liquidator as Respondent No.3 in the appeal. Their liquidator was thereafter directed to file his reply-affidavit about the compliance of the order given by the Adjudicating Authority, particularly providing the account books and related records to the IRP/RP. 5. The Learned Counsel for Appellants submits that the Adjudicating Authority has imposed penalty of 5 lakhs each on the Appellants exercising powers un....

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....d by him earlier of total non-cooperation from the erstwhile directors of the Corporate Debtor (who are appellants in this appeal) while filing Preliminary report and first-quarter progress report under the Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. He has also stated in the Reply-Affidavit that despite the impugned order dated 9.11.2020, the erstwhile directors have neither paid the imposed penalty nor deposited the amount of Rs. 32 lakhs along with interest @ 12% per annum (as directed vide order dated 9.11.2020 in IA 2025 of 2020). 7. We have considered the arguments presented by both the parties and also perused the record. 8. It is evident from the Impugned Order in IA No. 1253/2020 dated 9.....

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....quidation, the liquidator was unable to carry out the liquidation process in accordance with the provisions of Insolvency and Bankruptcy Board of India (Liquidation Process) Regulations, 2016. Moreover, when the Adjudicating Authority provided multiple opportunities to the Appellants to clarify their position by filing their replies in IA 1253/2020 the Appellants were totally remiss in doing so.. 10. The Liquidator has also stated in his reply affidavit in paras 10 and 11 that in another I.A No. 2025/2020 filed by the erstwhile Resolution Professional under section 66(1) read with section 60(5) of the IBC, the Adjudicating Authority had directed vide letter dated 9.11.2020 as follows:- ".....We hereby direct the Respondents to d....