Where NCLT termed an application filed under Section 19(2) as frivolous and imposed a cost of Rs.25000/ on RP.

NATIONAL COMPANY LAW APPELLATE TRIBUNAL, PRINCIPAL BENCH, NEW DELHI

IN THE MATTER OF:

Sanjai Kumar Gupta, RP Stone India Limited, .... Appellant Vs

Gouri Prasad Goenka Respondent

The Company Appeal (AT) (Insolvency) No. 70 of 2023 was filed by the Resolution Professional ("RP") of the Corporate Debtor Stone India Limited against the order dated 02.12.2022 passed by the National Company Law Tribunal, Kolkata Bench, Kolkata. The RP had filed an IA(I.B.C.)/678(KB)2022 against the Respondent under Section 19, sub-section (2) of the Insolvency and Bankruptcy Code, 2016 seeking direction to disclose documents sought by the RP, after their being non-cooperation by the Respondent. The Adjudicating Authority dismissed the application as frivolous and imposed a cost of Rs. 25,000/- on the RP.

The RP challenged the decision and argued that the application was in accordance with an earlier order dated 25.04.2022, and that the Adjudicating Authority had issued several directions to the Respondent to extend cooperation, and had even summoned the Respondent to appear in person. The Respondent argued that the application was only filed to delay the process and that the Resolution Plan had already been approved by the CoC.

The National Company Law Appellate Tribunal, Principal Bench, New Delhi, concluded that the application filed by the RP was not frivolous and that the Adjudicating Authority had not applied its mind to the matter. The NCLAT allowed the appeal and set aside the order of the Adjudicating Authority, and directed the Adjudicating Authority to consider the application afresh. The NCLAT also set aside the cost imposed on the RP.