Case Note & Summary
The appeal was filed by Mega Mall Management Services Pvt. Ltd. against an order from the National Company Law Tribunal, Kolkata, which directed the Appellant to disclose financial details related to rent and parking income from Avani Riverside Mall for the financial years 2021-22 and 2022-23. The dispute arose during the Corporate Insolvency Resolution Process (CIRP) of Avani Projects & Infrastructures Ltd., where the Resolution Professional contended that information regarding the mall's revenues was necessary for the successful completion of the CIRP. The Appellant argued that it was an independent third-party entity with no financial or operational nexus to the Corporate Debtor after the execution of agreements dated 31.01.2018, which they claimed novated the previous arrangements. The Appellant sought to set aside the Tribunal's order, asserting that it compelled disclosure without establishing any ownership or financial interest of the Corporate Debtor in the mall. The Appellant's submissions included references to previous orders and agreements, emphasizing that the Corporate Debtor had no rights to the revenues generated from the mall. The Respondent, however, maintained that the Corporate Debtor had a continuing interest in the mall's revenues and that the agreements executed in 2018 were suspect, given the ongoing winding-up proceedings against the Corporate Debtor. The Tribunal noted that the impugned order did not determine ownership or entitlement but merely required the Appellant to furnish requested information. The court emphasized that the Resolution Professional's request for financial information was legitimate and necessary for the CIRP, and the Appellant's claims of being a third party were insufficient to deny disclosure. Ultimately, the Tribunal upheld the order for disclosure, reinforcing the obligations of parties involved in the CIRP to cooperate fully with the Resolution Professional.
Headnote
A) Insolvency Law - Disclosure of Financial Information - Obligation to Disclose - Insolvency and Bankruptcy Code, 2016, Section 19 - The court held that the Resolution Professional is entitled to seek information related to revenues generated from the mall, as it is essential for the Corporate Insolvency Resolution Process, and the Appellant's refusal to disclose such information was unjustified (Paras 33-40).
Issue of Consideration
Whether the Appellant was justified in refusing to disclose financial information related to the Corporate Debtor's assets during the Corporate Insolvency Resolution Process.
Final Decision
The Tribunal upheld the order directing the Appellant to furnish details of rent and parking income collected from Avani Riverside Mall for the specified financial years, emphasizing the necessity of such information for the CIRP.
Law Points
- Insolvency and Bankruptcy Code
- 2016
- Corporate Debtor
- Resolution Professional
- disclosure of financial information
- third-party obligations
- contractual arrangements
