# In the matter of Nysa Communications Private Limited IA-2085,2688 & 3571-2023 in (IB)-556(ND)2020

> NCLT judgment dated 2023-03-23. Citation: TCN-2023-NCLT-04091. The case involves an application under Section 9 of the Insolvency and Bankruptcy Code (IBC),…

- **Court:** NCLT
- **Order date:** 23 Mar 2023
- **Citation:** TCN-2023-NCLT-04091
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/nysa-communications-private-limited-ia-20852688-3571-2023-in-ib-556nd2020-6883f486

## Summary

### Background

The case involves an application under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016. The Adjudicating Authority admitted IB-556/ND/2020 and appointed Late Navjit Singh as the Interim Resolution Professional (IRP). Subsequently, the NCLAT set aside the order passed by the Adjudicating Authority, leading to the cessation of the RP's appointment. The RP transferred a significant amount from the Corporate Debtor's (CD) CIRP account to his personal account. The court expresses strong disapproval of the IRP's conduct.

## Facts

On 2021-10-13, the Adjudicating Authority admitted IB-556/ND/2020 and appointed Late Navjit Singh as IRP. On 2022-05-09, the NCLAT set aside the order. On 2022-05-11, Late Navjit Singh transferred Rs. 34,67,162.33 from the CIRP account of the CD to his personal account. The court found this transfer fraudulent. The IRP has since passed away. IA-2085/2022 was filed by the erstwhile RP, who has since passed away, and there is no application for substitution of any LR for the Applicant. IA-2688/2022 is related to IA-3571/2022.

## Issues and analysis

### Issue 1: Whether the transfer of funds by the IRP from the CIRP account to his personal account constitutes …

**Ratio:** The legal principle is that an IRP has a fiduciary duty to act in the best interest of

…

**Reasoning:** The court reasoned that the IRP's action of transferring funds to his personal account

…

**Interpretation:** The interpretation is that an IRP must act with utmost honesty and integrity.

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**Application:** In this case, the IRP, Late Navjit Singh, transferred Rs. 34,67,162.33 from the

…

## Parties

- **Judges:** SHRI. ASHOK KUMAR…; SHRI. L. N.…
- **Appellants:** M/s. Computer…
- **Respondents:** M/s. Nysa…

## Timeline

- **2021-10-13 — Admission of IB-556/ND/2…**: The Adjudicating Authority admitted…
- **2022-05-09 — NCLAT Or…**: The NCLAT set aside the order…

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