NCLT Guwahati Directs Suspended Directors of Sree Bajrang Infracon to Hand Over Records, Warns of Action for Non-Cooperation

The National Company Law Tribunal (NCLT), Guwahati Bench, has directed the suspended directors of Sree Bajrang Infracon Pvt. Ltd. to fully cooperate with the liquidator and hand over all records, assets, and information, holding that non-cooperation undermines the time-bound insolvency framework under the Insolvency and Bankruptcy Code, 2016 (IBC).

The order was passed in an application under Section 19(2) of the IBC, originally filed by the Interim Resolution Professional (IRP) alleging non-cooperation by the suspended board. Following the initiation of liquidation proceedings, the application was pursued by the liquidator, Purshotam Gaggar.

The Tribunal noted that despite repeated communications, reminders, and multiple opportunities granted by the Bench, the suspended directors failed to provide complete books of accounts, financial records, asset details, and other critical information necessary for conducting the Corporate Insolvency Resolution Process (CIRP). Only limited documents, such as certain income tax acknowledgements and partial financial statements, were furnished.

The Bench observed that the IRP had sought comprehensive details including bank accounts, audited financials, tax returns, litigation records, employee data, and asset particulars. However, filings on the MCA portal were available only up to March 2019, and no updated records were provided by the management. Repeated assurances by the directors were not honoured, and scheduled meetings were also not attended.

During the CIRP, the Tribunal had granted several opportunities, including directions for personal appearance and filing compliance affidavits. Although some data, including tally records, was later submitted, substantial information and assets remained undisclosed. Even after liquidation was ordered on December 20, 2024, the liquidator continued to face non-cooperation from the suspended directors.

Examining Section 19 of the IBC, the Tribunal reiterated that personnel of the corporate debtor, including suspended directors, promoters, and ex-management, are under a statutory obligation to assist and cooperate with the IRP, Resolution Professional, and Liquidator. It emphasized that such cooperation is essential for the effective and time-bound completion of insolvency and liquidation proceedings.

The Bench held that failure to comply with this statutory duty impedes the insolvency process and “cannot be countenanced.” It found that despite repeated directions, the respondents failed to extend the required cooperation.

Allowing the application, the Tribunal directed the suspended directors to:

• Extend full cooperation to the liquidator;
• Hand over all books of accounts, statutory records, documents, assets, and login credentials within 15 days;
• Provide necessary clarifications and assistance as required during liquidation.

The Tribunal further warned that failure to comply with these directions would invite appropriate legal action against the members of the suspended management under applicable provisions of law.

Case Title: Purshotam Gaggar, Liquidator of Sree Bajrang Infracon Pvt. Ltd. v. Rakesh Kumar Singh & Anr.
Case No.: IA(IBC)/30/GB/2024 in CP(IB)/7/GB/2023
Coram: Rammurti Kushawaha (Judicial Member) and Yogendra Kumar Singh (Technical Member)