Resolution Professional Not Obligated To Share All Information With Shareholders Of Corporate Debtor: NCLAT Delhi

The National Company Law Appellate Tribunal (“NCLAT”), New Delhi Bench, comprising of Justice Ashok Bhushan (Chairperson) and Shri Barun Mitra (Technical Member), while adjudicating an appeal filed in M/s Dauphin Cables Pvt. Ltd. v Mr. Praveen Bansal, has held that IBC provisions do not indicate that all information collected by the Resolution Professional is required to be shared with Shareholders of the Corporate Debtor upon their request. The Bench upheld the NCLT order whereby Resolution Professional was permitted to submit documents in a sealed cover before the NCLT. Background Facts M/s Abloom Infotech Pvt. Ltd. (“Corporate Debtor”) was admitted into Corporate Insolvency Resolution Process (“CIRP”) by the NCLT. M/s Dauphin Cables Pvt. Ltd. (“Shareholder/Appellant”) being a Shareholder of Corporate Debtor filed an application before NCLT, seeking direction to the Resolution Professional to give documents and calculation based on which it admitted the claim of DMI Finance Pvt. Ltd. (Financial Creditor). On 14.02.2023, the NCLT observed that IBC does not contain any provision whereby the shareholders can ask for such documents from Resolution Professional. However, in the interest of justice and fair play, the NCLT directed the Resolution Professional to file an additional affidavit stating the claims admitted by it with all the supporting documents and calculations. Thereafter, the Resolution Professional filed an application before NCLT requesting to file the said Additional Affidavit and documents in a sealed cover without e-filing. The NCLT vide its order dated 05.06.2023 permitted the Resolution Professional to file affidavit and documents in a sealed cover. The Shareholder filed an appeal against the order dated 05.06.2023. It was argued that IBC contains no provision permitting documents to be kept confidential from the shareholders of the Corporate Debtor. NCLAT Verdict The Bench noted that IBC provisions do not indicate that all information collected by the Resolution Professional is required to be shared with Shareholders upon their request. “The scheme of IBC thus does not indicate that all information collected by the Resolution Professional has to be shared with Shareholders who asks for the information. In the present case, the Adjudicating Authority on an application which application is under Section 60(5) has issued direction to the Resolution Professional to file the documents in a sealed cover without e-filing. Under the NCLT Rules, 2016, the Adjudicating Authority under Rule 43 is empowered to call for any information or evidence.” On 01.08.2023, the NCLT had approved a Resolution Plan for the Corporate Debtor. It was opined that the Resolution Professional has complied the Order dated 05.06.2023 and filed the relevant evidence. Since the Resolution Plan has been approved, the issues raised by the Shareholder need no further consideration. The appeal has been dismissed. Case Title: M/s Dauphin Cables Pvt. Ltd. v Mr. Praveen Bansal Case No.: Company Appeal (AT) Insolvency No. 971, 972 & 973 of 2023 Counsel For Appellant: Mr. Abhimanyu Bhandari, Mr. Manish Paliwal, Mr. Sushant Pal, Advocates. Counsel For Respondent: Mr. Mohit Jolly and Mr. Veenu Drall, Advocates for RP. Click Here To Read/Download Order

Resolution Professional Not Obligated To Share All Information With Shareholders Of Corporate Debtor: NCLAT Delhi

Pallavi Mishra

Tags