Personnel to co-operate with Resolution Professional ( Section 19 of IBC)

(The most important section for Insolvency process)

While we are visiting such units, we found there are significant disagreement between the management / staff / senior personnel of the organisation and Insolvency Resolution Professional. Sometimes is not very easy to take control over the operations of the Corporate Debtor. This is the common scenario if the INSOLVENCY RESOLUTION PROFESSIONAL is not active and experienced to his tasks even lowest grade employees of the organisation not cooperate with the professional and his team. They try to fight with professional with least every weapon they have such as, not giving user ids and passwords, not providing Assets details, not giving essential documents, keys of cars, keys of factories etc. in this kind of situation the IBC comes to rescue with above mentioned section 19 of the Code.

Below is the specified wordings of The Code :

I. The personnel of the corporate debtor, its promoters or any other person associated with the management of the corporate debtor shall extend all assistance and cooperation to the interim resolution professional as may be required by him in managing the affairs of the corporate debtor.

II. Where any personnel of the corporate debtor, its promoter or any other person required to assist or cooperate with the interim resolution professional does not assist or cooperate, the interim resolution professional may make an application to the Adjudicating Authority for necessary directions.

III. The Adjudicating Authority, on receiving an application, shall by an order, direct such personnel or other person to comply with the instructions of the resolution professional and to cooperate with him in collection of information and management of the corporate debtor.

Ajay Kumar Vs. Shree Sai Industries Pvt. Ltd. & Anr.-NCLAT

If the Promoters do not cooperate & handover the necessary documents & information, Adjudicating Authority will take the help of the Superintendent of Police of the concerned area to ensure that the possession of the Corporate Debtor & all the records are handed over to the RP and, if necessary, take criminal action against the Promoters.

For any practical issues author may be reached on below mentioned details.

Regards

Compiled by team CA Sunil Sakral

casunilsakral@gmail.com

07290087564