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

The recovery of vehicles by the financier not an offence - SC

Special Leave Petition (Crl.) No. 8907  of 2009 Anup Sarmah (Petitioner) Vs Bhola Nath Sharma & Ors.(Respondents) The petitioner submitted that  respondents-financer had forcibly taken away the vehicle financed by them and  illegally deprived the petitioner from its lawful possession  and  thus,  committed  a crime. The complaint filed by the petitioner had been  entertained  by  the Judicial Magistrate (Ist Class), Gauhati (Assam) in Complaint Case  No.  608 of 2009, even directing the interim custody of the vehicle (Maruti  Zen)  be given to the petitioner vide order dated  17.3.2009.  The respondent on approaching the Guwahati High  Court against this order, the hon'ble court squashed the criminal  proceedings  pending   before  the  learned Magistrate. After hearing both sides, the Hon'ble Supreme Court decided on 30th...
7 comments
Read more

Owner of vehicle is not expected to verify the genuineness of the driving license before appointing a driver

Cause Title : Rishi Pal Singh Versus New India Assurance Co. Ltd & Ors., Civil Appeal No. 4919 Of 2022, The Supreme Court Of India Date of Judgment/Order : July 26, 2022 Corum : Hemant Gupta; J., Vikram Nath; J. Background the truck owned by the appellant met with an accident. The owner deposed before the court that before employing the driver, he had taken his driving test and that he was driving the vehicle satisfactorily and  that the driver was employed with him for 3 years before the date of the accident. He produced his driving license. This was reaffirmed by the driver who deposed that the driving license was obtained from the driver and it was issued from Nagaland, but no such license was produced on record. Both the Motor Accident Claims Tribunal and the High Court have held that the owner has alleged that the driver had a driving license from Nagaland but the same was not produced and therefore, the Insurance Company is entitled to recover the awarded amount...
Post a Comment
Read more

Person Being Prosecuted To Be Provided With All Relevant Documents

The Delhi High Court, in the case of Poonam Jain vs Union of India & Ors, noted that a person being prosecuted against has a right to be provided with all the material relied upon by the prosecuting agency to prosecute her/ him. In the instant case, a search was conducted at the residences of the petitioners and their statements were recorded and several documents were seized. They were issued show cause notices under Section 276 C(1) and Section 277 of the Income Tax Act, Section 181 of the Indian Penal Code and Sections 50 and 51 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act. They sought to be provided with a copy of their statements and the documents seised. However, the same was denied to them.
Post a Comment
Read more