TaxTMI 
TaxTMI 
2026 (5) TMI 762
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.... the statutory auditor. b) While so, barely two months thereafter, on 24.07.2018, CIRP was initiated against the CD. c) Pursuant to its appointment on 10.09.2018, the appellant sent an e- mail to the RP seeking certain particulars and repeated his efforts vide another e-mail dated 27.09.2018. On receipt of the second e-mail, on the same date, the RP had sent a written e-mail to the appellant wherein he had indicated that he was not obtaining any support from the staff of the CD. d) It is in these circumstances the 5th meeting of the COC was convened. On 16.11.2018, the COC met and it inter alia resolved to change the statutory auditor owing to certain issues connected with the appellant's remuneration which the Board of the CD had originally agreed to pay him. The COC had also sought appellant's resignation along with a NOC for appointing a new statutory auditor. In deference to the said resolution and request, on 21.02.2019, the appellant had tendered his resignation. 3. Shortly before the appellant tendering the resignation, the RP/respondent herein had filed IA 69 of 2019, the Order passed in which is the subject matter of the present appeal for a d....
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....19(2) and 19(3) of the IBC is malafide, frivolous, and filed without any substantive allegation or proof. e) The real dispute pertains to audit fees, where the RP arbitrarily reduced the fee to Rs.5,00,000 without basis as against Rs. 18,00,000 approved by shareholders and the appellant had offered a voluntary reduction of 20% in fees, which was suppressed by the RP before the CoC. The RP misled the CoC by not disclosing the Appellant's willingness to reduce fees and obtained approval for change of auditor based on incomplete and misleading facts. The issue of fee reduction was never placed before or approved by the CoC only change of auditor was discussed. f) The CoC meeting dated 16.11.2018 was conducted in violation of IBBI Regulations, as no proper agenda, supporting documents or voting process (as required under Regulation 21(3)) was followed. No valid voting with the requisite 66% majority under Section 28(3) of the IBC was conducted. Hence, any approval to change the auditor is void ab initio. g) The RP has exceeded his authority and misused powers under the IBC by attempting to alter the appointment and remuneration of the statutory auditor. The a....
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....onsibility under the Code with regard to sharing of information with the Resolution Professional. As per Section 19(1) of the Code, the Respondent is under obligation to extend all assistance and cooperation to the RP as required in managing the affairs of the company. By not responding to the notices issued during the present proceedings, the respondents have only lent strength to the contention of the Resolution Professional that such non-compliant behaviour is intentional and premeditated. 6) In view of the above discussion, we direct Mr. Sanjeev Kumar Arora-Respondent, Statutory Auditor, to cooperate and give access to all documents/details as sought by the applicant. They are further directed to assist the applicant-RP in completing the statutory compliances as required to complete the audit. The respondent is further directed to provide pending information required by IRP. All the aforementioned compliances be made within two weeks from the date of this order, failing which the applicant-Resolution Professional is at liberty to approach local police on the basis of this order and local police to render all necessary assistance to Resolution Professional. In view of t....
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.... to be seen in the context of serious discrepancies discovered in inventory during the CIRP, necessitating production of records relied upon by the appellant in his limited review report, which the appellant had failed to provide. Discussion and decision 8. Principally, we are not impressed why the respondent is harping on his resistance to this appeal, on the merit of his defense apart. Today, the fact remains that a resolution plan of a certain resolution applicant had been approved by the CoC. That might have been rejected by the Adjudicating Authority and liquidation was ordered is a different issue, but so far as the COC - RP combination goes, they apparently had done what is required to be done for a successful insolvency resolution process, and there its responsibility stops. What purpose has the RP in seeking the information now? At least it has not deterred the same RP from preparing its information memorandum and the CoC approving a plan based on it. 9.1 If Sec. 19 of IBC is turned to, it only mandates the corporate debtor, its promoters or any other person associated with the management of the CD to extend all assistance and cooperation to the interim resolution....
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....d with the management of the corporate debtor shall extend all assistance .." This would imply that unless a person is associated with the management of the CD prior to the admission of the CD to CIRP, it might be difficult to hold that such person would be under an obligation to assist the RP under Sec. 19 IBC. 9.4 To sum up this idea, under Sec. 19(1), an IRP or a RP, as the case may be, may insist only those personnel of the CD which includes its directors, and/or any other person who were associated with the management of the corporate debtor to assist or to cooperate with the him in his effort in managing the CD for running it as a going concern and for the protection of CD's properties. There cannot be any other way of constructing the ambit of Sec. 19(1) IBC. 9.5 Turning to sharing of information which an IRP or the RP often seeks under Sec. 19, it is surely an aspect of assistance or cooperation which Sec. 19(1) underscores, but then it is qualified by three aspects: (a) such information can relate only to those which are required for managing the affairs of the CD as a going concern or for protection of its properties; (b) the person from such information is sought m....