# In the matter of Servomax India Private Limited IA No. 421-2019 in CP(IB) No. 265-9-HDB-2017

> NCLT judgment dated 2019-05-13. Citation: TCN-2019-NCLT-03317. The case involves a Corporate Insolvency Resolution Process (CIRP) initiated against Servomax…

- **Court:** NCLT
- **Order date:** 13 May 2019
- **Citation:** TCN-2019-NCLT-03317
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/servomax-india-private-limited-ia-no-421-2019-in-cpib-no-265-9-hdb-2017-6298a1a1

## Summary

### Background

The case involves a Corporate Insolvency Resolution Process (CIRP) initiated against Servomax India Pvt Ltd. Murali Krishna Power Controls Pvt Ltd filed the company petition to initiate CIRP. The Resolution Professional (RP) observed irregularities relating to the corporate debtor and sought directions from the Tribunal to recover outstanding amounts and assets. The RP also requested the Tribunal to direct the ex-directors to provide necessary information and cooperate with the CIRP process.

## Facts

Murali Krishna Power Controls Pvt Ltd initiated Corporate Insolvency Resolution Process (CIRP) against Servomax India Pvt Ltd under Section 9 of the Insolvency and Bankruptcy Code (IBC). The petition was admitted on 22.02.2018. The Resolution Professional (RP) observed irregularities relating to the corporate debtor company, including outstanding amounts due from companies related to Mr. A. Venkateswara Rao, the ex-director. The RP also noted discrepancies in the books of accounts and a lack of cooperation from the suspended board of directors. The RP filed applications seeking directions from the Tribunal to compel the ex-directors to provide necessary information, recover outstanding amounts, and bring back assets transferred to other companies. The ex-directors

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## Issues and analysis

### Issue 1: Whether the ex-directors of the corporate debtor are obligated to provide all necessary information …

**Ratio:** Section 19 of the Insolvency and Bankruptcy Code (IBC) casts an obligation on

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**Reasoning:** The Tribunal reasoned that the ex-directors are legally bound to provide all necessary

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**Interpretation:** Section 19 of the IBC is interpreted to impose a mandatory duty on the

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**Application:** In this case, the Tribunal found that the ex-directors were not cooperating

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## Parties

- **Judges:** Ratakonda…
- **Appellants:** Murali Krishna…
- **Respondents:** Servomax India…; Avasarala…

## Timeline

- **2017-01-01 — CP(IB) F…**: Company petition bearing No. CP (IB) No. 265/09/HDB/2017 filed by Murali Krishna Power…
- **2018-02-22 — CIRP Init…**: Tribunal admitted the petition and initiated…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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