State Bank Of India And Ors vs R.P. Info Systems Limited And Ors

Jinan K.R., J

Smt. Ramanathan Bhuvaneshwari the Resolution Professional of the Corporate Debtor M/s. R.P. Info Systems Limited, filed this unnumbered application under Section 19(2) of I & B Code, 2016 alleging non-cooperation by the directors of the suspended board, and the statutory auditor of the Corporate Debtor (CD), with the Resolution Professional.

This application was filed requesting for urgent hearing in the matter since there has been much delay due to the country wide lockdown in the pandemic situation. Having been satisfied with the grounds of the appeal and the urgency, the application is admitted and listed for hearing on today (13.07.2020).

Heard both sides. Except R5 all others represented and R1 has submitted written notes of defence.

Corporate Debtor M/s. R.P. Info Systems Limited is undergoing CIRP vide order dated 4th February, 2020. Ms. Ramanathan Bhuvaneshwari was appointed Interim Resolution Professional (in short "IRP") for the Corporate Debtor whose appointment was later on confirmed by the CoC as the RP in its first meeting dated 03.03.2020.

While continuing with the CIRP process the RP was unable to collect all information, documents and assets details of the CD due to the non-cooperation of the directors of the suspended board of CD and the auditor (R1 to R5). To strengthen the contention, various copies of emails seen annexed with the application. It is also stated that Respondent No. 5 (last Auditor of the Corporate Debtor) has, till date, only provided certain documents of the Corporate Debtor which pertain to the year 2014-15, which are immaterial and do not suffice the requisites in so far as it relates to the Applicant. Despite demand, the Respondent No. 5, vide email dated 9th April 2020, has denied having such records refers in the balance sheets. Upon the said contentions the applicant prays for issuing directions to the respondent for assisting and co-operating with the RP.

The Ld. Counsel Mr. Vikram Wadehra for RP submits that the Corporate Debtor is owned and possessed certain assets and immovable properties across Kochi, Bangalore, Mumbai, Bhubaneshwar, Kolkata, as well as 5 different factories at Himachal Pradesh, Ahmedabad, Patna, Ludhiana and Ranchi, and no documents pertinent to the assets and key of the office and factories are not handed over, in spite of repeated demand. The books of account so far not provided to the RP, that the RP was not informed the current status of the company and that the Assets and vehicles of the Corporate Debtor are attached by the Enforcement Directorate with directions to not sell or transfer the same pursuant to an order dated 11th September 2018 passed by the Adjudicating Authority under the Prevention of Money Laundering Act, 2002 (hereinafter referred to as 'the PMLA'). However, on an Appeal before the Appellate Tribunal, filed under Section 26 of the PMLA, the Appellate Tribunal vide order dated 17th October 2018 passed an interim order of status quo which then stood extended from time to time. A copy of the order dated 17th October 2018 passed by the Appellate Tribunal under the PMLA is annexed as Annexure 'K' to the application for our reference.

Ld. Counsel for the R1 and R3 Ms. Ujjaini Chatterji, submitted that the allegations levelled in the application are all false. The respondents, especially the respondent no 1 has at all times kept in touch with the RP and provided with all necessary documents and information within his knowledge that shall reflect from the replies given by him in such emails. The RP was handed over Duplicate keys of the office yet she has not accessed the same. RP was informed time and again that without permission of ED such properties/assets cannot be handed over. RP failed to file any application before this Hon'ble AA seeking appropriate directions for taking custody of such assets and kept blaming the respondents who have no control over such issues. RP being stationed at Bangalore insisted that all work be done during lockdown and moreover, this application is a counter to the Writ petition filed by the respondent No .1. RP has only been holding meetings and has done nothing fruitful. She also prays time for filing reply to bring on record all emails, showing their bona fide.

This is an application filed u/s. 19(2) of the Code alleging non co-operation from the side of the respondents. The documents produced on the side of the applicant satisfy that the respondents are not caring about her demands by providing the books of account, the information about the CD current status and the keys of various offices and factories. Physical possession of the Immovable Assets and vehicles, documents as well as other records pertaining to the Corporate Debtor are all retained with the Respondents without any legitimate excuse. The respondents are responsible for delaying the progress of CIRP even if works of all are disrupted due to Covid-19 pandemic. Only because the RP can exclude the unutilised period from the timeline to be completed by her, due to lockdown issued by the respective Government, it doesn't mean that the respondents can cause deliberate delay in handing over the information, documents, assets of the CD and books of account which are essential for continuing the CIRP.

Having heard the submissions made by Ld. Counsel for the Resolution Professional and the Ld. Counsel for the respondents except R5, and going through the records available with us we are of the opinion that respondents are to be directed to assist or cooperate the RP for completion of the process keeping the timeline as mandated under the Regulations. Accordingly we are passing the following directions to the respondents:

ORDER

(i) The respondents/directors of the suspended board of the Corporate Debtor and R5 auditor, are directed to provide immediate cooperation and assistance to the RP by providing the information, documents and handing over possession of the assets as detailed in a list of inventory to be prepared by the RP and issued to the respondents.

ii) The Respondents are directed to provide/handover all the details to be requested by the RP within ten days of the date of receipt of the Inventory/list of documents/assets etc.

iii) Failing which the RP is at liberty to move contempt proceedings against the defaulting respondents if any.

iv) Unnumbered IA(IB)No /KB/2020 in CP(IB) No. 652/KB/2019 is allowed as above and disposed of. There shall be no orders as to cost.

v) Registry is directed to serve e-mail copy of the order to both parties forthwith.