Rule 43 Of NCLT Rules | NCLT Can Call For Information/Evidence From Parties Including Resolution Professional: 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 under Rule 43 of the NCLT Rules, 2016, the NCLT is empowered to call information or evidence from the parties, including the Resolution Professional. “The Adjudicating Authority is thus fully empowered for calling information or evidence from the parties. The power under Rule 43 shall also encompass power to call information from Resolution Professional.” 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 placed reliance on Rule 43 of the NCLT Rules, 2016, which states that the NCLT is empowered to call for further information or evidence from the ‘parties’ or any one of them. The purpose of calling for such information could be for ascertaining the truth of allegations, for inquiry or investigation or if deemed necessary for passing of orders in petition/application. The Bench held that under Rule 43 of the NCLT Rules, 2016, the NCLT (Adjudicating Authority) is empowered to call information or evidence from the parties, including the Resolution Professional. “The Adjudicating Authority is thus fully empowered for calling information or evidence from the parties. The power under Rule 43 shall also encompass power to call information from Resolution Professional.” Further, 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. 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 by the NCLT, 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

Rule 43 Of NCLT Rules | NCLT Can Call For Information/Evidence From Parties Including Resolution Professional: NCLAT Delhi

Pallavi Mishra

Tags