Skip to main content

Suspended Director Of Corporate Debtor Not Entitled To Confidential Info

In Vijay Kumar Jain vs Resolution Professional,  applicant was a suspended director of a corporate debtor who sought documents and information placed before the CoC and sought the tribunal to direct that all documents and information be provided to him for setting aside the CIRP process. The  CoC and the RP were apprehensive that doing so will be detrimental to the interest of the creditors in maximization of the value of the assets of the company.

He said being the suspended director of the corporate debtor, he had the right to participate in the CoC meetings and to receive all documents tendered before the CoC which are pertinent to the issues that come up in its meetings as well as CIRP proceedings of the corporate debtor.

The Mumbai bench of National Company Law Tribunal (NCLT) while rejecting the application referred to the Code and held that as per this code as well as the CIRP regulations, either the suspended director or any other person other than the CoC will not be called as members, they are defined as participants, therefore, wherever participants are entitled to get the information, this suspended Board of Directors are equally entitled to get the same. In the event where disclosure is limited to members alone, such information need not be given to the participants, other than the CoC. However, when it has come to a resolution plan in Regulation 35, it has been categorically mentioned that the resolution professional can provide the fair value and liquidation value to the members alone that too after taking confidentiality undertaking from such members and it has not been mentioned anywhere that this resolution plan or the valuations can be parted with the suspended directors.

Comments

Post a Comment

Most viewed this month

Dishonour of cheques - Jurisdiction and cause of action explained

In a landmark judgment, Hon'ble Supreme Court went to some length to define the cause of action and jurisdiction of cases under Section 138 of the Negotiable Instruments Act. While deciding in 2014 STPL(Web) 499 SC 1, Dashrath Rupsingh Rathod Vs. State of Maharashtra & Anr., the Hon'ble court said, one of the main issues faced by the court (a) from which stage do we consider a offence under Section 138 to have been caused (b) Where would the jurisdiction of the court lie if the cheque was drawn in city A and presented dishonored in City B ? After discussion on various past decisions, the Hon'ble court finally affirmed, " To sum up: (i) An offence under Section 138 of the Negotiable Instruments Act, 1881 is committed no sooner a cheque drawn by the accused on an account being maintained by him in a bank for discharge of debt/liability is returned unpaid for insufficiency of funds or for the reason that the amount exceeds the arrangement made with the bank. (...
Post a Comment
Read more

Registrar cannot remove trademark from record without notice to trademark holder

In Kleenage Products (India) Private Limited vs The Registrar of Trade Marks, the petitioner had applied for registration of trademark ‘KLITOLIN’ which was accepted and from 1988 to 2009, the said trademark was renewed multiple times. The trademark was due for renewal on August 21, 2009, but the petitioner failed to tender application for renewal.  It was, thereafter, revealed that the trademark is likely to be removed from the register. The petitioner contended that the Registrar of Trademarks (respondent No.1) also failed to issue the requisite mandatory notice in Form O-3 to him (the registered proprietor) under Section 25(3) of the Trade Marks Act, 1999. The Bombay High Court allowed the petition holding that any such removal can only be possible if prior notice, mandatory under Section 25(3) of the Trade Marks Act 1999, has been given Article referred: http://www.livelaw.in/removal-registered-trademarks-cant-done-without-giving-prior-notice-registered-proprie...
Post a Comment
Read more

Loss of earning capacity, and not percentage of disability, must decide compensation, says HC

While computing compensation claims of accident victims, the victim's loss of earning capacity shall outweigh the percentage/extent of his disability, the Madras high court has felt. Justice R Mahadevan, enhancing the compensation payable to an injured driver by Rs 2 lakh, said: "In cases for compensation, it is not the disability, which is partial or total, alone that matters, it is the loss in earning capacity as a result of accident that is to be considered." R Murali, driver of a mixed concrete vehicle, met with an accident in January 2009 and suffered injuries in hip, right leg and ankle. He claimed loss of 100% earning capacity and sought appropriate compensation along with 12% interest rate. However, as the disability certificate issued by a doctor pegged the percentage of his disability at 60%, the deputy commissioner of labour-II, awarded Rs 3.12 lakh as compensation, by fixing the monthly income at Rs 4,000. Aggrieved by the poor package, Murali filed the...
Post a Comment
Read more