Tribunal Directs Suspended Directors and Service Providers to Cooperate with Resolution Professional; Claims Against AWS India Rejected
In a significant ruling, the National Company Law Tribunal (NCLT) Bengaluru Bench has provided partial relief in the case of Aditya Birla Finance Ltd v. Shapos Services Pvt Ltd. The tribunal has directed the suspended directors of Shapos Services and certain service providers to cooperate with the Resolution Professional (RP) in the Corporate Insolvency Resolution Process (CIRP), while dismissing claims against Amazon Web Services (AWS) India due to the absence of a direct contractual relationship.
The case arose from the insolvency proceedings initiated against Shapos Services Pvt Ltd, with Aditya Birla Finance Ltd as the petitioner. The tribunal examined allegations of non-cooperation by the suspended directors and service providers, who were accused of failing to provide access to the company's critical data and records stored on the AWS cloud.
In its judgment dated June 25, 2026, the NCLT directed Respondent Nos. 1 and 2, the suspended directors of Shapos Services, to extend full cooperation to the RP. The tribunal mandated them to provide all necessary information, documents, records, and credentials related to the company's affairs. It criticized their failure to disclose the status of the AWS account, which had become inaccessible due to unpaid dues, labeling it as non-cooperation under Section 19 of the Insolvency and Bankruptcy Code (IBC), 2016.
The tribunal also issued directives to Respondent Nos. 3 and 4, identified as service providers facilitating AWS services for Shapos Services, to assist the RP by providing accessible data and records. The NCLT emphasized their contractual relationship and the obligation to cooperate as per the IBC provisions.
However, the tribunal refused to extend these obligations to AWS India and its officials (Respondent Nos. 5 to 7). It noted that there was no direct contractual relationship between AWS India and the Corporate Debtor, as services were availed through a distributor-reseller model. The tribunal further acknowledged that the data had been permanently deleted before the CIRP commenced, making it impossible for AWS India to provide access.
The judgment clarifies that AWS India, a third-party service provider, cannot be considered "personnel of the Corporate Debtor" or associated with its management, thus exempting it from statutory obligations under the IBC. The tribunal dismissed the reliance on the Companies Act, 2013 and the Digital Personal Data Protection Act, 2023, as these provisions could not fasten liability on AWS India without a direct legal or contractual nexus.
The NCLT's decision partially allows the application filed by the erstwhile Interim Resolution Professional, providing directives for cooperation from the suspended directors and certain service providers. It leaves the RP with the option to pursue legal steps against continued non-cooperation by these parties.
The judgment highlights the complexities involved in insolvency proceedings, especially when dealing with digital data and third-party service providers. It underscores the mandatory cooperation required from parties directly associated with the Corporate Debtor, while delineating the boundaries of such obligations concerning third-party entities.
Bottom line:-
Insolvency and Bankruptcy Code, 2016 - Respondents' obligation to cooperate with the Resolution Professional under Section 19 - Suspended directors and service providers directed to provide necessary access to data and records; claims against AWS India rejected due to lack of direct contractual relationship and absence of data in possession.
Statutory provision(s): Insolvency and Bankruptcy Code, 2016 Sections 19, 60(5), Companies Act, 2013 Section 128, Digital Personal Data Protection Act, 2023.
