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Judgment
ORAL ORDER
IA-1288/2024: The prayer made in the captioned petition reads thus:-
“A. Pass appropriate orders to summon and punish the Respondent for committing contempt and wilful disobedience of the directions passed by this Hon’ble Tribunal vide its order dated January 11, 2024 in IA No. 5545 of 2021;”
Ld. Counsel for the Petitioner submitted that order dated 11.01.2024 passed in IA-5544/2021 alleging disobedience of which present contempt petition could be preferred has been stayed by Hon'ble NCLAT. In the wake of the order dated 05.04.2024 passed by Hon'ble NCLAT, present contempt application is disposed of. However, it is made clear that subject to outcome of the appeal preferred before Hon'ble NCLAT, the Applicant would be entitled to prefer fresh petition if the circumstances warrant.
CA-1625/2019: The prayer made in the captioned application reads thus:-
“1.Direct Respondent No. 1 to disgorge an amount of Rs. 3,64,00,000/-(Rupees Three Crores Sixty and Four Lakhs Only) which was withdrawn by the Respondent No. 1 without the permission of the Financial Creditor and in contravention of the terms of the sanction letter issued by the Financial Creditor (Indian Overseas Bank).
2.Direct Respondent No. 1 to disgorge an amount of Rs. 3,18,00,000/-(Rupees Three Crores and Eighteen Lakhs Only) which was siphoned away by the Respondent No. 1 by way of showing non genuine LED Bulb transactions by using fake and forged vendor bills.
3.Direct Respondent No. 4 to clear the outstanding amount of Rs. 32,78,551/- (Thirty Two Lakhs Seventy Eight Thousand Five Hundred and Fifty One Only) against the sale of goods dated October 29, 2017,
4.Direct Respondent No. 2 (a related party) to disgorge an amount of Rs. 18,00,000/- (Rupees Eighteen Lakh Only) which was paid to him from the account of the Corporate Debtor by Respondent No. 1 without giving priority to the running financial creditor Le Indian Overseas Bank,
5.Direct Respondent No. 2 to disgorge the amount of Rs. 8,00,000/-(Rupees Eight Lakh Only) having been mischievously withdrawn by Respondent No. 2 and shown as imprest in the books of accounts of the Corporate Debtor,
6.Allow the application in favor of the Applicant and direct to Respondent No. 1 to provide unconditional cooperation to the Applicant until the completion of the current liquidation proceedings and provide the following documents and assistance at the earliest for the consideration of the Liquidator:
a. HR and employment records of the Corporate Debtor,
b. Assistance in identification, segregation and counting of Stock;
c. Stock records of the Corporate Debtor';
d. Agreement with vendors and customers;
e. Correspondence relating to recovery of outstanding dues from the debtors of the Corporate Debtor.
7.Direct the Respondent No. 1 to handover the remaining boxes of documents which were taken by him from the Applicant for the purpose of indexing and numbering.
8.Pass an order making a reference to the Special Court so that necessary action can be taken against Respondent No. 1.
9.Pass any other order as this Hon'ble Tribunal may deem just, fit and proper to meet the ends of justice and in the interest of the Corporate Debtor.”
The Applicant has captured the factual position in Paras 8 to 21 of the application. Subsequently in the wake of the judgment of Hon’ble Supreme Court in Anuj Jain vs. Axis Bank Limited and Ors., Civil Appeal Nos. 8512-8527 of 2019 dated 26.02.2020, the Resolution Professional/Applicant filed an affidavit confining his relief to Section 43 of IBC, 2016. The affidavit reads thus:-
During the course of hearing, Ld. Counsel for the Liquidator/Applicant could draw our attention to forensic audit report dated 12.09.2019 and submitted that from the report it is clear that the R-1 could withdraw the amount from current account of the Corporate Debtor to satisfy the financial facility (unsecured loan) he extended to the Corporate Debtor. The relevant excerpt of the forensic audit report reads thus:-
From the aforementioned report of the forensic audit it is apparent that the Applicant had withdrawn an amount of Rs. 3.52 Crore from the account of Corporate Debtor. Mr. Rahul, Ld. Counsel for the R-1 contended that at the first place the R-1 had invested the withdrawn amount in equity of the Corporate Debtor, thus, the money remained with the Corporate Debtor and it cannot be alleged that the R-1 benefited himself in any manner. Secondly, he contended that there is nothing on record to reflect that the R-1 had withdrawn the money to satisfy the amount of financial facility extended by him to the CD.
As far as first contention raised on behalf of the R-1 is concerned, indubitably no company hold its own shares and even if the R-1 had invested the withdrawn money to the share capital of the Corporate Debtor, the investment was in his own name and it was he who turned as equity shareholders qua the Corporate Debtor.
In other words, it is immaterial that how the R-1 utilizes the money which he could withdraw from the account of the Corporate Debtor, i.e. whether he invested the same in the equity of the Corporate Debtor or elsewhere.
What we are concerned about is that the R-1 had withdrawn an amount of Rs. 3.52 Crores from the account of the Corporate Debtor within two years preceding the date of commencement of CIRP. There is no dispute that the R-1 being Director qua the Corporate Debtor is a related party. A question may arise that how it can be presumed that the amount withdrawn was towards the financial facility extended by R-1 to the Corporate Debtor. The answer to the proposition can be simple that as per books of accounts of the Corporate Debtor the R-1 had extended the financial facility of Rs. 3.64 Crores to the Corporate Debtor but still he did not stake any claim either before the Resolution Professional or before Liquidator. Thus, apparently he could withdraw the amount to satisfy the financial facility/loan extended by him to the Corporate Debtor.
Coming to the factual position, from the forensic audit report (ibid) it is clear that the equity shares for an amount of Rs. 0.91 Crores and Rs. 2.64 Crores were issued in the name of R-1 i.e. Mr. Gopal Kalra. It is immaterial that how and where the R-1 utilized the withdrawn amount. As has been noted hereinabove what is relevant is that the R-1 had withdrawn the amount from the current account of the Corporate Debtor to satisfy the financial facility extended by him to the Corporate Debtor on preference basis.
It is stare decisis that all the Creditors need to stake their claim before Resolution Professional, in response to the notice issued in terms of the provisions of Regulation 6 and 6A of IBBI (CIRP) Regulations, 2016 and then the Resolution Professional has to complete the exercise in terms of the provisions of Regulation 11 to 15 regarding verification of the claim. Thereafter all the Creditors are paid the amount either as offered in insolvency resolution plan or by disposing of the assets of the Corporate Debtor in Liquidation process in accordance with the provisions of Section 53 of the IBC, 2016.
In the present case, apparently, the R-1 could withdraw the amount from the account of the Corporate Debtor to satisfy the financial facility extended by him to the Corporate Debtor. We do not find any reason to ignore the finding and report of the forensic audit to the effect.
The oral submissions put forth on behalf of R-1 cannot be relied upon to defy the forensic audit report. During the course of hearing, Ld. Counsel for the R-1 could also raise the plea that the ingredient of the provisions of Section 43 of IBC, 2016 are not satisfied.
As can be seen from Section 43 of the Code, a Corporate Debtor shall be deemed to have given a preference if there is a transfer of property or an interest thereof of the corporate debtor for the benefit of a creditor or a surety or a guarantor for or on account of an antecedent financial debt or operational debt or other liabilities owed by the corporate debtor and the transfer under clause (a) has the effect of putting such creditor or a surety or a guarantor in a beneficial position than it would have been in the event of a distribution of assets being made in accordance with Section 53. The provisions of Section 43(2) of the Code reads thus:-
“43. Preferential transactions and relevant time.—
…..
(2)A corporate debtor shall be deemed to have given a preference, if—
(a)there is a transfer of property or an interest thereof of the corporate debtor for the benefit of a creditor or a surety or a guarantor for or on account of an antecedent financial debt or operational debt or other liabilities owed by the corporate debtor; and
(b)the transfer under clause (a) has the effect of putting such creditor or a surety or a guarantor in a beneficial position than it would have been in the event of a distribution of assets being made in accordance with section 53.”
There is no dispute that the R-1 was doing transaction on behalf of Corporate Debtor and in discharge of such function he transferred the amount from the account of Corporate Debtor to his own account, giving preference to the amount of debt payable to him in the account and jointly held by him and his wife, thus, violated provisions of Section 53 of IBC, 2016.
As far as the contention regarding withdrawal of an amount of Rs. 18,00,000/- by Mr. Ankit Mehra is concerned, there is nothing on record to show that Mr. Ankit Mehra had extended any financial facility to the Corporate Debtor in satisfaction of which he had withdrawn the aforementioned amount from the account of the Corporate Debtor. The contention put forth by the Ld. Counsel for the Liquidator is that it was wife of Mr. Ankit Mehra, namely Mrs. Charu Mehra who had extended the financial facility of Rs. 18,00,000/- to the Corporate Debtor and in lieu of such amount, Mr. Ankit Mehra had withdrawn the amount of Rs. 18,00,000/- from the account of the Corporate Debtor. It would be open to Liquidator to move an appropriate application to the effect. Our attention could be drawn to the excerpt of the ledger account qua Mrs. Charu Mehra reproduced in the IA which reads thus:-
From the aforementioned it is clear that an amount of Rs. 18,00,000/-could be paid to Mrs. Charu Mehra on preferential basis in disregard of Section 53 of IBC, 2016 and account of Mrs. Charu Mehra could be squared. Even in the forensic audit report also, it has been concluded that the preferential transaction could be made in favour of Mrs. Charu Mehra by way of withdrawal of money by her husband Mr. Ankit Mehra. The relevant excerpt of forensic audit report reads thus:-
In the totality, of the facts and circumstances, we are convinced that the Applicant is liable to contribute to the account of the Corporate Debtor, the amount which he received on preference over the other Creditors. In the wake, the application is disposed of with the direction to R-1 to contribute Rs. 3,23,25,000/- to the liquidation account of the Corporate Debtor within 8 weeks from today and Mrs. Charu Mehra, R-2 and R-3 would also contribute an amount of Rs. 18,00,000/- to the liquidation account of the Corporate Debtor. It is made clear that it would be open to R-1,R-2 and R-3/Charu Mehra to stake claim of the above amount as unsecure financial loan before the Liquidator and on submission of such claim they would be entitled to such amount of money which is payable to them as per waterfall mechanism. They would be entitled to do so within one week after contributing to the liquidation account of the Corporate Debtor. The application stands disposed of, accordingly.
IA-5625/2020: As prayed by the Ld. Counsel for the Liquidator, the hearing is deferred to 10.07.2025.