# In the matter of Jay Polychem India Ltd. C.A.95-96-C-V-ND-2019 in (IB) 419 (ND)-2017

> NCLT judgment dated 12 Jun 2020. Citation: TCN-2020-NCLT-01173. The Resolution Professional filed applications (CA No. 95 of 2019 and CA No. 96 of 2019)…

- **Court:** NCLT
- **Order date:** 12 Jun 2020
- **Citation:** TCN-2020-NCLT-01173
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/jay-polychem-india-ltd-ca95-96-c-v-nd-2019-in-ib-419-nd-2017-161f37f1

## Summary

### Background

The Resolution Professional filed applications (CA No. 95 of 2019 and CA No. 96 of 2019) seeking penal action against the respondents, including the Ex-Directors and Statutory Auditors of the Corporate Debtor, based on findings of financial irregularities and misappropriations identified in a forensic audit report.

## Facts

M/s. Omni Media Communications Pvt. Ltd., an operational creditor, initiated corporate insolvency resolution process (CIRP) against M/s. Jay Polychem India Ltd. The Adjudicating Authority triggered the CIRP on April 13, 2018, and appointed Mr. Rajiv as Interim Resolution Professional. Subsequently, Mr. Ram Ratan Kanungo was appointed as Resolution Professional (RP) on July 25, 2018, following a resolution by the Committee of Creditors.

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## Issues and analysis

### Issue 1: Whether the Adjudicating Authority is competent to take penal action against the Ex-Directors and…

**Ratio:** The Adjudicating Authority (NCLT) is not competent to directly impose penal action…

**Reasoning:** The NCLT referred to Section 66 of the I&B Code, which allows the Adjudicating Authority…

**Interpretation:** The court interpreted **Section 66** of the I&B Code as empowering the…

**Application:** Given the forensic audit report indicating financial irregularities and…

## Parties

- **Judges:** ABNI RANJAN KUMAR…; K.K. V…
- **Advocates:** For the Respondent…; Shauray K…; +6 more

## Timeline

- **April 13, 2018 — CIRP Trig…**: The Adjudicating Authority triggered the Corporate Insolvency Resolution Process (CIRP)…
- **July 25, 2018 — RP Appointment…**: Mr. Ram Ratan Kanungo was appointed as Resolution Professional (RP) and confirmed by the…

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