NCLT JUDGEMENT ON SECTION 9, 15, 19(2), 19(3) OF THE INSOLVENCY AND BANKRUPTCY CODE, 2016 AND RULE 11 OF THE NATIONAL COMPANY LAW TRIBUNAL RULES, 2016
Hira Wastage Supply Co. And Ors Vs. Cos Board
Industries Limited And Ors, (2020) 07 NCLT CK 0088
NCLT allowed the application
filed by the Resolution Professional of the respondent under Sections 19(2) and
19(3) of the Insolvency and Bankruptcy Code, 2016 (in short, 'I & B Code')
read with Rule 11 of the National Company Law Tribunal Rules, 2016 for issuance
of directions upon the General Manager, The New India Assurance Company
Limited, to release the insurance claim within a stipulated period and not to
seek any CIRP documents which are prohibited under IBBI (Insolvency
Professionals) Regulations, 2016. While allowing the application NCLT held that
the delay in processing the claim by the R2 was
not at the fault of R2. It is significant to note here that RP has admittedly
declined to submit those two documents on a misreading his power in regards
disclosure of confidential documents to a party not connected to CIRP.
Admittedly the claim is related to damages to the Raw materials and building of
the CD. The Ld. Counsel for the RP unable to convince us any restriction on the
RP under the provisions of IBBI (Insolvency Professionals) Regulations, 2016.
His attempt was to show that requesting any CIRP documents by the R2 are
prohibited under IBBI (Insolvency Professionals) Regulations, 2016. We are
afraid, none of the provisions under the regulations restrict him from communicating
with R2 in respect of realisation of the pending claim from the R2. The documents
called for not at all to be construed as confidential documents as far as R2 is
concerned. The Code of conduct for insolvency professionals are laid down under
Schedule 1 of the said Regulations. Clause 3 says that: "An insolvency
professional must act with objectivity in his professional dealings by ensuring
that his decisions are made without the presence of any bias, conflict of interest,
coercion, or undue influence of any party, whether directly connected to the
insolvency proceedings or not" Similarly what confidentiality the RP to be
maintained is provided under Clause 21 "An insolvency professional must
ensure that confidentiality of the information relating to the insolvency
resolution process, liquidation or bankruptcy process, as the case may be, is
maintained at all times. However, this shall not prevent him from disclosing
any information with the consent of the relevant parties or required bv
law". The clauses read above itself sufficient to hold that the RP
declined submissions of documents to the R2 without exercising due diligence.
In view of the matter the application deserves dismissal with cost. However, we
are not doing so in the better interest of the CD which is undergoing CIRP and
for avoiding multiplicity of litigations and The R2 is directed to expeditious
the determination of the claim, preferably within ten days from the date of the
receipt of the documents called for by the respondent from the RP;
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