The National Company Law Appellate Tribunal (NCLAT) has ruled that suspended directors of a corporate debtor are entitled to access a resolution plan only after providing an appropriate confidentiality undertaking. The decision emphasizes the need to safeguard commercially sensitive information disclosed during the Corporate Insolvency Resolution Process (CIRP).
Under the Insolvency and Bankruptcy Code, 2016 (IBC), suspended directors continue to enjoy certain participatory rights in insolvency proceedings, including attending meetings of the Committee of Creditors (CoC). However, access to confidential business information remains subject to statutory safeguards.
The Appellate Tribunal observed that resolution plans often contain proprietary business information, financial projections, valuation details, and strategic proposals submitted by prospective resolution applicants. Disclosure of such information without adequate safeguards could prejudice the interests of stakeholders and undermine the insolvency resolution process.
The NCLAT clarified that suspended directors cannot claim unrestricted access to resolution plans. Before such access is granted, they must execute a confidentiality undertaking agreeing not to disclose, misuse, or circulate the information obtained through the insolvency proceedings.
The ruling aligns with the broader objective of the IBC to maintain transparency while protecting commercially sensitive data. It also reinforces the responsibility of Resolution Professionals to ensure compliance with confidentiality requirements during CIRP.
Legal experts note that the judgment strikes a balance between the rights of suspended management and the need to preserve the integrity of the resolution process. The decision is expected to serve as an important precedent in future insolvency cases involving requests for access to confidential resolution documents.