# In the matter of National Plywood Industries Limited CP (IB) 9-GB-2018

> NCLT judgment dated 2020-05-20. Citation: TCN-2020-NCLT-01347. The case involves an application filed by the Interim Resolution Professional (IRP), Mr.…

- **Court:** NCLT
- **Order date:** 20 May 2020
- **Citation:** TCN-2020-NCLT-01347
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/national-plywood-industries-limited-cp-ib-9-gb-2018-824bcce6

## Summary

### Background

The case involves an application filed by the Interim Resolution Professional (IRP), Mr. Sandeep Khaitan, against the respondents, seeking directions to the promoters and directors of the corporate debtor, National Plywood Industries Limited, to hand over the management for the smooth running and completion of the Corporate Insolvency Resolution Process (CIRP). The Tribunal had previously appointed Mr. Khaitan as IRP on 25/8/2019 and declared a moratorium. The suspended Board of Directors allegedly attempted to delay the CIRP, failed to fully cooperate, and made unaudited provisional accounts. The directors of the suspended board of the corporate debtor moved before the Hon'ble Supreme Court and till the date of passing of the order by the Apex Court on 20/1/2020, the

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## Facts

The Interim Resolution Professional (IRP), Mr. Sandeep Khaitan, filed an application against the respondents, seeking directions for the promoters and directors of National Plywood Industries Limited (corporate debtor) to hand over management for CIRP completion. The Tribunal had appointed Mr. Khaitan as IRP on 25/8/2019, declaring a moratorium. The suspended Board of Directors allegedly delayed the CIRP, failed to cooperate, and submitted unaudited provisional accounts. The corporate debtor had 19 bank accounts, but only 17 were disclosed to the IRP. The directors of the suspended board of the corporate debtor moved before the Hon'ble Supreme Court and till the date of passing of the order by the Apex Court on 20/1/2020, the transaction audit could not be completed

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## Issues and analysis

### Issue 1: Whether a direction for cooperation with the RP is to be issued against the suspended directors of …

**Ratio:** Section 19 of the Insolvency and Bankruptcy Code (IBC) mandates that the directors of the

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**Reasoning:** The Tribunal observed that the directors and their associates were not inclined to extend

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**Interpretation:** The provision emphasizes the mandatory nature of cooperation from the corporate

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**Application:** Given the non-cooperation of the directors, the Tribunal found it a fit case to

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## Parties

- **Judges:** Jinan…
- **Appellants:** Stressed Assets…
- **Respondents:** National Plywood…; Piyush Pe…

## Timeline

- **2017-11-27 — Suspension of Hosur…**: One unit of the corporate debtor at Hosur Plant…
- **2019-02-25 — Guwahati High Court…**: The erstwhile Directors of the suspended Board of the corporate debtor tried to derail…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 19 — Personnel to extend co-operation to interim…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-19)

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