# In the matter of Ajudhia Distributors Ltd. CA (IB) No. 418-KB-2017 IN CP (IB) No. 181-KB-2017 (Cost Imposed)

> NCLT judgment dated 2017-11-08. Citation: TCN-2017-NCLT-00229. The case involves a petition filed by the Resolution Professional (RP) under Section 70 of the…

- **Court:** NCLT
- **Order date:** 8 Nov 2017
- **Citation:** TCN-2017-NCLT-00229
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/ajudhia-distributors-ltd-ca-ib-no-418-kb-2017-in-cp-ib-no-181-kb-2017-cost-impos-578768a4

## Summary

### Background

The case involves a petition filed by the Resolution Professional (RP) under Section 70 of the Insolvency and Bankruptcy Code, 2016 (IBC), seeking directions and punishment for the officer, director, and representative of the corporate debtor, Ajudhia Distributors Ltd., for not extending assistance and cooperation to the RP in managing the affairs of the corporate debtor. A show cause notice was issued to the Director and the corporate debtor on 09/10/2017, which was served via email on 10/10/2017. Despite the notice, no one appeared from the corporate debtor's side, and no reply was received by the Tribunal.

## Facts

Radico Khaitan Limited initiated proceedings against Ajudhia Distributors Ltd. under Section 9(1) of the IBC. The Resolution Professional (RP) filed C.A. (IB) No. 418/KB/2017 under Section 70 of the IBC, alleging that Ajudhia Distributors Ltd. was not cooperating with the RP in managing the affairs of the corporate debtor. A show cause notice was issued on 2017-10-09 and served via email on 2017-10-10, but no one appeared on behalf of the corporate debtor, and no reply was received. The Tribunal concluded that the corporate debtor was deliberately disobeying its directions. Mr. Mohit Korpal, the Director, was penalized Rupees Three Lakhs, to be deposited within 15 days, failing which the amount would be recovered from the corporate debtor according to law. The

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## Issues and analysis

### Issue 1: Whether the corporate debtor, Ajudhia Distributors Ltd., was in non-compliance with the directions …

**Ratio:** A corporate debtor is obligated to cooperate with the Resolution Professional (RP) during

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**Reasoning:** The Tribunal observed that despite the issuance of a show cause notice and its service

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**Interpretation:** The interpretation of Section 70 of the IBC emphasizes the importance of

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**Application:** In this case, the corporate debtor's failure to respond to the show cause

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## Parties

- **Judges:** Vijai Prata…; Jinan…
- **Appellants:** Radico Khaitan…
- **Respondents:** Ajudhia Distributo…

## Timeline

- **2017-10-09 — Show Cause Noti…**: A show cause notice was issued to the…
- **2017-10-10 — Service of…**: The show cause notice was served on…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 70 — Punishment for misconduct in course of corporate…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-70)

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