NCLAT Reprimands RP For Seeking Police Help For Security Of Assets Of Corporate Debtor Instead Of Private Security

The National Company Law Appellate Tribunal (“NCLAT”), New Delhi Bench, comprising of Justice Ashok Bhushan (Chairperson) and Shri Naresh Salecha (Technical Member), while adjudicating an appeal filed in RP Modern Syntex (India) Ltd. v Supdt. of Police Anandpura, Vadodra Gujarat & Ors., has held for security of private property of the Corporate Debtor, the Resolution Professional cannot seek deployment of police at site. Instead, the Resolution Professional is required to hire security personnel for the said purpose and make payment to them.

The Bench has expressed its displeasure on the prayer made by the Resolution Professional and has observed that, “We are of the view that Resolution Professional should know that what prayers may be granted by the Adjudicating Authority and prayers which were made by the Resolution Professional requesting the Adjudicating Authority to direct deployment of police/gunmen at the site was wholly uncalled for.

BACKGROUND FACTS

Modern Syntex (India) Ltd. (“Corporate Debtor”) was admitted into Corporate Insolvency Resolution Process (“CIRP”). The Resolution Professional (“Appellant”) of the Corporate Debtor filed an application before the Adjudicating Authority (NCLT), seeking directions to the Superintendent of Police (“Respondent”) to deploy their police officer/gunmen for on the premises of the Corporate Debtor for safeguarding the said premises.

When the application was being heard, the Sub-Inspector of Police appeared before the NCLT and the latter discharged the Sub-Inspector after considering his response.

Accordingly, the NCLT rejected the application. The Resolution Professional filed an appeal before the NCLAT against the NCLT order.

NCLAT VERDICT

The Bench opined that the NCLT had correctly discharged the sub-inspector, since the prayers made by the Resolution Professional could not have been allowed by the NCLT.

Further, the Bench expressed its displeasure over the prayers made by the Resolution Professional. It has been observed as under:

“We are of the view that Resolution Professional should know that what prayers may be granted by the Adjudicating Authority and prayers which were made by the Resolution Professional requesting the Adjudicating Authority to direct deployment of police/gunmen at the site was wholly uncalled for. For security of private property, the RP has to hire security personnel for which payment has to be made for them. Prayers in the Applications were wholly inappropriate and has rightly been not considered.”

The Bench held that for the purpose of security of a private property, instead of requesting deployment of police, the Resolution Professional requires to hire security personnel and make payment to them for their services.

The Appeal has been dismissed.

Case Title: RP Modern Syntex (India) Ltd. v Supdt. of Police Anandpura, Vadodra Gujarat & Ors.

Case No.: Company Appeal (AT) Insolvency No. 682 of 2023

Counsel For Appellants: Mr. Ashutosh Kumar Mishra, Advocate.

Counsel For Respondent: Mr. Deeptakirti Verma, Advocate for R-3.

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