Redirecting RP To MCA Website Does Not Constitute Cooperation Under IBC: NCLT Indore

Merely directing a Resolution Professional (RP) to obtain information from public portals such as the MCA website and responding with "refer MCA website" or "not applicable" does not amount to cooperation during the insolvency resolution process, the National Company Law Tribunal (NCLT) at Indore has reiterated while directing the suspended management of Xyron Technologies Limited to furnish records sought by the RP.

A bench of Judicial Member Brajendra Mani Tripathi and Technical Member Man Mohan Gupta allowed an application filed by Resolution Professional Teena Saraswat Pandey and directed the suspended directors and former management of Xyron Technologies Limited to furnish the documents and information sought by the RP within 30 days.

Explaining why such responses were inadequate, the tribunal observed,

“The scope of cooperation envisaged under Section 19 is not limited to a mere token or mechanical response..... Reference in this regard may be made to the reasoning adopted by this Tribunal and various co-ordinate benches wherein it has been consistently held that redirecting the RP to public portals, giving evasive replies such as 'Not Applicable' or 'Refer MCA Website', or citing nonavailability of records which were statutorily required to be maintained, does not constitute compliance with Section 19 of the IBC”

The company's Corporate Insolvency Resolution Process (CIRP) commenced on March 24, 2025, after an application filed by Bank of Baroda was admitted. Pandey subsequently approached the Tribunal, alleging that despite repeated emails, reminders, and even a personal visit, crucial records required for carrying out the process had not been furnished.

According to the RP, the missing documents included signed and board-approved audited financial statements for FY 2022-23 and FY 2023-24. She also sought detailed information relating to the company's assets, lists of creditors and debtors, and provisional financial statements as on the insolvency commencement date.

The suspended management denied any non-cooperation. It contended that all available credentials and records had been shared with the RP.

The former management argued that the company had carried on only minimal operations since being classified as a non-performing asset and that certain records were unavailable.

In relation to assets, it submitted that the company owned only one wind turbine at Ratlam. It further stated that symbolic possession of the asset had already been handed over to the RP.

Rejecting the contention that references to public records amounted to cooperation, the Tribunal reiterated that the obligation imposed on former management requires active assistance.

“The scope of cooperation envisaged under Section 19 is not limited to a mere token or mechanical response. It requires active, substantive and contemporaneous assistance including furnishing of financial records, statutory books, asset registers, creditor-debtor details and all other information within the knowledge, possession or control of the Suspended Management, so as to enable the RP to effectively discharge its statutory functions under the IBC,” the tribunal observed.

The tribunal noted that several responses sent by the suspended management simply directed the RP to refer to the MCA website, ROC records or NCLT filings.

Such replies, it held, did not satisfy the obligation to provide records and information within the knowledge, possession or control of the suspended management.

It also rejected the defence that the company's non-operational status excused the absence of records. The tribunal reiterated that statutory obligations to maintain books of account and financial statements continue irrespective of whether a company is carrying on business.

“A failure to maintain such records in earlier years cannot be used as a shield to frustrate the CIRP process,” the tribunal observed.

The tribunal further found that signed and approved audited financial statements had not been provided. It also found that complete details of assets reflected in the company's own financial filings had not been furnished.

In addition, creditor and debtor lists containing names, addresses, and amount-wise particulars required by the RP had not been supplied.

Finding that the suspended management had only partially complied with its obligations and had furnished evasive responses in several instances, the tribunal directed the suspended directors and former management to provide the information and documents sought by the RP within 30 days.

The tribunal also granted liberty to the RP to move a fresh application in the event of non-compliance.