Criminal cases deter insolvency resolution professionals: Tribunal

Chennai: If every

resolution

professional (RP) is bombarded with

criminal prosecution

and police investigation, they won’t be able to conduct the insolvency process without fear, observed the National Company Law tribunal’s division bench in Chennai.

The tribunal’s observation was in response to a petition moved by Subrata Monindranath Maity, a RP who stated that he was harassed for discharging his duties. He was appointed by the tribunal to take over the insolvent company M/s/ Bhatia Coke and Energy Limited to conduct CIRP (corporate insolvency resolution process). The company’s directors, however, filed complaints against Maity with police and a criminal prosecution has begun, with FIRs filed in Maharashtra and in Tamil Nadu.

Maity’s counsel submitted that if RP is harassed by police, he will not be in a position to conduct the proceedings under the insolvency & bankruptcy code (IBC) without fear or favour. “The Insolvency and Bankruptcy Board of India (IBBI) is the regulatory authority and any complaint against the RP or any violation by RP can be placed before the internal monitoring committee of IBBI for assessment and necessary action,” the counsel submitted. The tribunal noted the submission by RP’s counsel that his team and family were threatened by the directors and that the RP’s life was in danger.

Clarifying that the tribunal is not passing any orders on merits of the FIRs, the tribunal comprising R Sucharitha (judicial member) and B Anil Kumar (technical member), directed that police give adequate protection to the RP, his family and the entire team. “If there are irregularities on part of the RP or his team, the director could have filed necessary applications before this tribunal and with IBBI. Accelerating criminal charges and using police to register criminal complaint are not appropriate,” the tribunal observed. The tribunal also stated that police can proceed as per the code for criminal procedure (CrPC) but no arrest can be made until the petition is disposed.