(2023) ibclaw.in 1066 NCLT
IN THE NATIONAL COMPANY LAW TRIBUNAL
Mumbai Bench
IDBI Bank Ltd.
v.
Ruchi Soya Industries Ltd. and Anr.
I.A. 2737 of 2021 In C.P.(IB) No. 1371/MB/2017, C.P.(IB) No. 1372/MB/2017
Decided on 19-Dec-23
Coram: Justice (Retd) Mr. Virendrasingh Gyansingh Bisht (Judicial Member) and Mr. Prabhat Kumar (Technical Member)
Add. Info:
Corporate Debtor: Ruchi Soya Industries Ltd.
For Appellant(s): Mr. J.P. Sen, Sr. Advocate a/w Mr. Kunal Vaishnav & Ms. Surbhi Soni i/b MGV & Associates
Brief about the decision:
Facts of the case
- The Respondent No.2 was the promoter/director of M/s. Ruchi Soya Industries Limited (Respondent No. 1 or Corporate Debtor) prior to the initiation of CIRP of the Corporate Debtor.
- Due to the financial downturn faced by M/s. Ruchi Soya Industries Ltd. (Respondent No. 1 or Corporate Debtor) in and around 2016, the other lenders of the Corporate Debtor categorized the account of the Corporate Debtor as SMA-2 and proceeded to form a Joint Lenders’ Forum (JLF) with the other lender banks of the Corporate Debtor. ?n 01.09.2016, the Applicant declared Corporate Debtor’s account as a Red Flag Account under the provisions of the RBI (Fraud Classification and Reporting by Commercial Banks and Select FIs) Master Directions, 2016.
- A special audit was conducted by the Applicant in 2017. The Auditor’s Report in respect of the special audit recorded various adverse findings which were communicated to the Corporate Debtor by the Applicant.
- In the meantime, vide order dated 15.12.2017, this Tribunal initiated CIRP of Corporate Debtor.
- The JLF was of the view that the account of the Corporate Debtor was fit to be classified as a Red Flag Account. Accordingly, the Applicant declared the Corporate Debtor’s account as a Red Flag Account on 22.02.2018. This classification was reported to CRILC on the same date.
- Subsequent to the classification and upon the advice of the JLF, the Applicant appointed one M/s. G.D. Apte and Co. to conduct the Forensic Audit of Corporate Debtor. Accordingly, a Forensic Audit was conducted and a Forensic Audit report dated 07.02.2018 along with an addendum dated 07.03.2018 was submitted by the said Auditor. In view of the observations in the Forensic Audit Report, the Applicant declared the Corporate Debtor‘s account as “Fraud” on 02.07.2018. The Applicant, on behalf of the JLF, filed a complaint dated 01.10.2018 with the CBI and further filed a revised compliant dated 25.01.2019 requesting CBI to take investigate the fraud and to register an appropriate proceeding against the Corporate Debtor, its directors/promoters and other Key Managerial Personnel.
- In the meantime, vide order dated 24.07.2019, this Tribunal approved the Resolution Plan submitted by the consortium led by Patanjali Ayurved Limited and accordingly the consortium led by Patanjali Ayurved Limited acquired the management of Corporate Debtor.
- Vide its order dated 05.12.2019, the Hon’ble Madhya Pradesh High Court directed Applicant herein to conduct a fresh forensic audit by an Independent Auditor at Respondent No.2’s expense. Further, the Applicant and the law enforcement agencies were directed to be restrained from taking any action either penal or otherwise, on the basis of the earlier Forensic Audit Report.
- Pursuant to the order dated 05.12.2019, the Applicant, in consultation with the JLF, appointed New Independent Auditor, viz. Haribhakti Business Services LLP to conduct a forensic audit of the Corporate Debtor. This was communicated to the Respondents as is evident from the letter dated 30.03.2020.
- From 24.03.2020, a nationwide lockdown was declared on account of Covid- 19 pandemic.
- The Applicant requested the Respondent No.2 as well as the new management of Corporate Debtor to support the Forensic Auditor and to provide all the necessary documents to complete the Audit in a specified time frame. Vide email dated 02.04.2020, the Corporate Debtor responded denying any obligations in complying with the forensic audit in view of the approval of the Resolution Plan.
- Vide email dated 07.01.2021, the Forensic Auditor, informed the Applicant that the Corporate Debtor had communicated that it had not received any notice of the Writ Petition and that it was not a party thereto. Moreover, the Corporate Debtor alleged that it had no knowledge of any order requiring a fresh forensic audit of the Corporate Debtor and that it would not act in support of the conducting such audit.
- It is submitted that, by virtue of section 32A(1) of the Code, the Respondents are obligated to extend all assistance and cooperation to any authority investigating an offence committed prior to the commencement of the corporate insolvency resolution process of the Corporate Debtor.
Decision of the Adjudicating Authority
Hon’ble Adjudicating Authority holds that:
- Provisions of Section 32A(3) of the Code are explicitly clear and mandates the corporate debtor and any person who may be required to provide assistance under such law as may be applicable to such corporate debtor or person, shall extend all assistance and co-operation to any authority investigating an offence committed prior to the commencement of the CIRP.
- Accordingly, we consider it appropriate to direct the Corporate Debtor and Respondent No. 2 to cooperate and provide all such documents and assistance, as may be requested and requisitioned by the Forensic Auditor M/s. New Haribhakti Business Services LLP or any person authorised by the Applicant in this regard from time to time for the necessary completion of the forensic audit pursuant to the aforesaid order dated 05.12.2019.
- The Respondents shall provide all the information they are seized and possessed of and all documents necessary for completion of the forensic audit and are duty-bound to provide the same.
- In view of the foregoing, this IA 2737/2021 is disposed of as allowed.(p6-7)
Judgment/Order:
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