NCLAT stays penalty on Writer Business Services by NCLT in Cox & Kings’ RP’s plea


The National Company Law Appellate Tribunal (NCLAT) has stayed the order of the National Company Law Tribunal (NCLT) imposing a fine of Rs 20 lakh on Writer Business Services Pvt Ltd.

The penalty was imposed for refusing to provide record management services and record retrieval services to the resolution professional (RP) of Cox & Kings Ltd. Subsequently, the Writer Business Services approached the appellate tribunal to challenge the order of Mumbai NCLT.

“Till the next date, we stay the fine of Rs 20 lakhs imposed on the Appellant (Writer Business) as well as direction to refund payments back to the Resolution Professional,” said the principal bench led by Justice Ashok Bhushan, Justice Jarat Kumar Jain and a technical member Dr Alok Srivastava on November 23.

The appellate tribunal also directed the RP of Cox & Kings to file his response within two weeks and has posted the matter for further hearing on January 10.

Earlier, on October 29, the tribunal had imposed a penalty of Rs 20 lakh on the Writer Business and directed the company to continue providing its services to the bankrupt travel company as per the agreement.

In this case, The travel company’s RP had approached the tribunal with the complaint that Writer Business Services had blocked access to the record management service by refusing to provide the list of businesses and information of the Cox & Kings that are stored by it.

The tribunal had observed in its order that the respondent’s (Writer’s) refusal to provide its record retrieval services to the RP is totally violation of Section 14 of the (IBC) Code.

Under Section 14 (2A) of IBC, when a company is undergoing corporate insolvency resolution process (CIRP), the supply of goods or services critical to protect and preserve the value of the corporate debtor as a going concern shall not be terminated, suspended or interrupted during the period of moratorium.

Email queries to Writer Corporation and Ashutosh Agarwala, RP of Cox & Kings Ltd remained unanswered till press time.

“Only part of the order to the extent of a penalty and the refund of the amount received has been stayed, however, the directions to provide services against the service provider will continue,” said Ashish Pyasi, associate partner at law firm Dhir & Dhir Associates. “If the appellate tribunal finds that the order is incorrect, then it may set aside or modify the order passed by the tribunal.”

In October 2019, NCLT admitted a plea filed by Rattan India Finance to initiate insolvency proceedings against Cox & Kings for defaulting on a loan of Rs 30 crore. The company owes over Rs 7,422 crore to its financial and operational creditors.

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