Tribunal mandates provision of documents and access to hospital systems; warns of penal consequences for non-compliance.
In a significant ruling, the National Company Law Tribunal (NCLT) Indore Bench has directed the suspended directors of Greater Kailash Hospitals Pvt. Ltd., Mr. Anil Bandi and Ms. Radhika Bandi, to fully cooperate with the Resolution Professional (RP), Mrs. Chaya Gupta, in the ongoing Corporate Insolvency Resolution Process (CIRP). The tribunal emphasized the statutory obligations of directors during insolvency proceedings, underscoring the necessity for transparency and cooperation to facilitate a smooth resolution process.
The order, delivered by Mr. Brajendra Mani Tripathi and Mr. Man Mohan Gupta, mandates the suspended directors to furnish essential documents, including complete login credentials for the Hospital Management System (HMS) and accounting records, within 15 days. The tribunal highlighted that objections based on patient data privacy or operational challenges do not override the RP's statutory duties under the Insolvency and Bankruptcy Code, 2016.
The judgment followed an interlocutory application filed by Mrs. Gupta, who reported significant non-cooperation from the suspended directors, impeding her ability to fulfill her duties effectively. The tribunal noted that while some documents were provided during the proceedings, critical information remained outstanding. The order specifies that the directors must also provide the basis for shareholding allotment during the conversion of the partnership firm into a private limited company, among other details.
The tribunal's decision further includes a directive for a joint visit to the corporate debtor's premises by the RP and the directors to address any unresolved issues and ensure all necessary records are identified and obtained. This collaborative approach aims to resolve outstanding queries and facilitate the CIRP's progression.
While refraining from initiating penal action under Section 70 of the Code at this stage, the tribunal warned of potential consequences for continued non-cooperation. The judgment underscores the ongoing nature of the RP's duties until the resolution plan is fully approved and implemented under Section 31 of the Code.
The ruling highlights the critical role of cooperation in insolvency proceedings and serves as a reminder of the legal obligations incumbent upon corporate directors during such processes.
Bottom line:-
The National Company Law Tribunal emphasized the statutory obligations of suspended directors to assist the Resolution Professional (RP) during the Corporate Insolvency Resolution Process (CIRP). It directed the suspended management to provide specified documents, facilitate unhindered access to the Hospital Management System (HMS), and ensure cooperation in compliance with the Insolvency and Bankruptcy Code, 2016.
Statutory provision(s):
Insolvency and Bankruptcy Code, 2016 Sections 18, 19, 25, 31, 70
Chaya Gupta v. Anil Bandi, (NCLT)(Indore Bench) : Law Finder Doc id # 2934573
