NCLT Indore Dismisses Confidentiality Breach Plea: Auto-Suggest Email to Prospective Bidder Held Inadvertent, Not Deliberate

Background and Context of the Dispute

The National Company Law Tribunal, Indore Bench, recently adjudicated upon an interlocutory application filed by the liquidator of M/s Girdharilal Sugar & Allied Industries Limited — Mr. Amresh Shukla — against officers of the State of Madhya Pradesh's Commercial Tax Department. The application, filed under Rule 11 of the National Company Law Tribunal Rules, 2016, sought coercive directions on account of an alleged breach of confidentiality during ongoing liquidation proceedings.

The core controversy revolved around an email dated 09.02.2024, which was sent by the respondent government officers and inadvertently included M/s Labhanshi Multitrade Pvt. Ltd. — a prospective bidder — in the recipient list. The liquidator contended that by doing so, the respondents had disclosed confidential information discussed during the 9th Stakeholders' Consultation Committee (SCC) meeting, thereby jeopardising the integrity and fairness of the competitive bidding process.

The Liquidator's Contentions

The liquidator approached the Tribunal seeking the following specific reliefs:

  • A direction to Respondent Nos. 3 and 4 to furnish an explanation as to why the email dated 09.02.2024 was forwarded to a prospective bidder
  • A direction compelling the respondents to submit an affidavit affirming that confidentiality of all future SCC discussions would be maintained
  • A direction to Respondent Nos. 1 and 2 to initiate departmental action against the concerned officer under the M.P. Civil Service (Conduct) Rules, 1965

Statutory Basis Cited by the Liquidator

The liquidator grounded his application in the following statutory provisions:

  1. Regulation 7(2)(h) of the IBBI (Insolvency Professionals) Regulations, 2016 — obligating insolvency professionals to maintain confidentiality of all process-related information
  2. Regulation 21 of the IBBI (Insolvency Professionals) Regulations, 2016 — reinforcing the duty of confidentiality
  3. Regulation 5(3)(c) of the IBBI (Liquidation Process) Regulations, 2016 — empowering the liquidator to obtain confidentiality undertakings from stakeholders
  4. Section 208(2)(e) of the Insolvency and Bankruptcy Code, 2016 — requiring insolvency professionals to act within the prescribed framework

He also placed reliance on the Supreme Court's observations in Vijay Kumar Jain v. Standard Chartered Bank (2019), where it was acknowledged that while transparency is vital, dissemination of commercially sensitive information must be balanced against the preservation of confidentiality.

Factual Narrative as Per the Liquidator

The Tribunal, by its order dated 25.01.2024, had directed a bidding exercise between two competing entities, namely Radheshyam Dairy and M/s Labhanshi Multitrade Pvt. Ltd. The 9th SCC meeting was originally scheduled for 05.02.2024, subsequently rescheduled to 09.02.2024, during which the modus operandi for negotiations between the two bidders was discussed at length.

According to the liquidator, shortly after this meeting concluded, Respondent Nos. 3/4 sent an email at 4:46 PM on 09.02.2024 which included M/s Labhanshi Multitrade Pvt. Ltd. in the recipient list, thereby exposing that bidder to internal deliberations of the SCC — information which, in the liquidator's submission, should have remained confined to the committee.

The liquidator further submitted that despite promptly flagging this issue through a reply email dated 10.02.2024, recording the incident in the Minutes of Meeting dated 11.02.2024, and sending multiple reminders on 14.02.2024, 16.02.2024, 17.06.2025, 19.06.2025, and 11.08.2025, the respondents consistently refused to furnish the requisite affidavit. This persistent refusal was characterised as an act demonstrating deliberate disregard for confidentiality obligations.

Respondents' Defence

Denial of Intentional Breach

The respondents categorically denied any deliberate breach of confidentiality. Their defence rested on three principal pillars: