While considering the Contempt Application NCLT should have decided the Application for clarification: NCLAT

While considering the Contempt Application NCLT should have decided the Application for clarification: NCLAT

The Appeals filed by the Appellant Surajbari Traders Pvt. Ltd. and its director Kavita Jagatramka against the orders passed by the Adjudicating Authority (National Company Law Tribunal) Kolkata Bench, whereby certain directions were issued to the Key Personnel of the Corporate Debtor to provide co-operation for resumption of work by the Liquidator at the registered office of the Corporate Debtor M/s Gujarat NRE Coke Ltd has been allowed by the National Company Law Appellate Tribunal (NCLAT).

In this matter, in January 2018 Mr. Sumit Binani (Respondent No. 1) was appointed as Liquidator for the M/s Gujarat NRE Coke Ltd. (Corporate Debtor), and commenced liquidation proceedings at head office of the Corporate Debtor. Numerous relaxations were granted by the Government with respect to the Covid-19 induced lockdown w.e.f 31.05.2020.

However, the office premises was not opened and therefore, the Liquidator issued numerous emails and communications to the officials of the Corporate Debtor to open the office so he may be able to resume the work. However, the officials kept on citing reasons on the ground of Covid-19 Pandemic, thus, there was a great hindrance on the liquidation proceedings of the Corporate Debtor. In such a situation, the liquidator filed an Application under Section 19(2) r/w Section 34(3) of the Insolvency and Bankruptcy Code (I&B Code), against the Key Personnel of the Corporate Debtor.

The Appellate Authority opined that in the Application under Section 19(2) r/w Section 34(3) of the I&B Code, the key personnel of the Corporate Debtor were arrayed as Respondent, and the Appellants and respondent no.3 were not arrayed as party. Thus, without giving any opportunity of hearing to the Appellants the impugned order in question was passed.

According to the NCLAT, when the Appellants came to know about the order then the Appellant No. 1 filed an Application for clarification of the same order, but the Application had not been considered by the Adjudicating Authority and it passed the impugned order dated 14.08.2020.

In this Application it was prayed that a direction be issued against the Liquidator not to claim exclusive possession of the office premises as the premises was being used by other 20 companies as their head office and the liquidator had the right only to access the records and documents pertaining to the Corporate Debtor maintained in the office premises.

The Adjudicating Authority without considering the Application for clarification passed the impugned order dated 14.08.2020 on the Contempt Application. The Hon'ble NCLAT was of the view that while considering the Contempt Application the Adjudicating Authority should have decided the Application for clarification.

Adjudicating Authority vide the impugned order directed the key personnel of the Corporate Debtor or the owner of the premises, whosoever is in possession of the keys of the registered office premises shall handover the keys to the liquidator immediately. The Adjudicating Authority issued such direction as if the premises was in exclusive possession of the liquidator. However, the Liquidator himself after passing of this order sent an email to the appellant's counsel that he never claimed exclusive possession of the office of the Corporate Debtor and he only wanted access of the office premises of the Corporate Debtor.

The NCLAT stated, "In the light of such admission, and the fact that office premises was being used by other 20 Companies as their registered office, the direction of Adjudicating Authority to hand over the keys to the liquidator and in case the set of keys are not handed over to the liquidator, the liquidator would be free to approach the Superintendent of Police to provide necessary help and protection to the liquidator in having the locks broken and replaced with new locks without any delay, was erroneous and not sustainable."

The NCLAT held that the Adjudicating Authority thought it proper that the matter required a detailed hearing for an overall view of the situation. Therefore, granted further time for a detailed hearing before taking coercive steps in the matter.

Therefore the NCLAT directed the NCLT to consider the matter afresh.