IBC – Criminal Case if CD fails to cooperate & join CIRP and to give assets / required documents / information to IRP-

IBC – Criminal Case if CD fails to cooperate & join CIRP and to give assets / required documents / information to IRP

Order dated 15.7.2023 of the Special Judge (Companies Act), Dwarka Courts, New Delhi, taking cognizance of criminal complaint of IBC, shows the implications of non-cooperation of CD with IRP and CIRP.

Application under Section 9 IBC was admitted on 24.4.2022 against the corporate debtor. 

On 25.2.2022, IRP sent an email to the officers of the corporate debtor about initiation CIRP and to contact her.   However, the accused did not join the CIRP and also not provide the required documents / information. IRP visited the premises but could not find the CD at the given addresses.  IRP contacted accused no.1 through conference call but he refused to hand over assets / record.

Section 19 provides for personnel of CD to cooperate with IRP and extend all assistance as may be required by IRP in managing the affairs of the CD. Sub-section (2) of Section 19 of IBC provides for filing an application to the adjudicating authority for non-compliance with sub-section (1) of Section 19 of the IBC.

Section 70 of IBC provides for punishment of not less than three years, which may extend to 5 years or with fine where an officer of CD does not disclose all the details of property of CD to RP, does not delivery the property to CD, all books and papers, etc.

In view of the above facts, the IRP filed application under Section 19(2) of IBC for directions.

By the order dated 9.5.2022, the NCLT directed the IRP to file criminal case against accused persons under Section 70 of the IBC.

The Special Court had taken the cognizance of the complaint by the order dated 15.7.2023.

0c840fab2fa2d516b7814faa2f36c355.pdf (ibbi.gov.in)