TaxTMI 
TaxTMI 
2020 (6) TMI 690
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.... by Impugned Order dated 27th September, 2019 and moratorium under section 14 of IBC was declared by the Adjudicating Authority, and Corporate Insolvency Resolution Process (CIRP) was initiated. 2. Against the Order of admission of Application under section 9, present Appeal came to be filed by the Appellant - Manoj K. Daga as Director of the Company. When the Appeal came up before this Tribunal on 23rd October, 2019, Notice was issued to the Respondent No. 1 - Operational Creditor and the Respondent No. 2 - Resolution Professional of the Corporate Debtor. At that time, this Tribunal had passed the following interim Order:- "In the meantime, the 'Interim Resolution Professional' will not constitute the 'Committee of Creditors', if not yet constituted. However, the 'Interim Resolution Professional' will ensure that the company remains a going concern and will take assistance of the (suspended) Board of Directors and the officers/Directors/employees. The person who is authorised to sign the bank cheques may issue cheques but only after approval of the 'Interim Resolution Professional'. The Bank Account of the 'Corporate Debtor' be allowed....
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.... Amount transferred (in Rs.) CSPDCL 24-10-2019 2,89,97,063/- CSPDCL 01-11-2019 80,646/- CSPDCL 08-11-2019 17,63,706/- Giriraj Solvent Extraction Pvt. Ltd. 13-11-2019 35,000/- CSPDCL 14-11-2019 1,46,00,101/- Total Amount 4,54,76,516/- " 5. The IRP attached bank statements in support. The IRP pointed out that on 17-11-2019, the balance left in the bank account was of mere Rs. 6315.27 paise. Learned Counsel for IRP states that this relates to the account in Vijaya Bank. IRP referred to various letters issued for meeting with Directors after the Application was admitted by Adjudicating Authority on 27-9-2019 and their non-cooperation; not providing of details and then IRP learning about Bank Account in Vijaya Bank. The IRP referred to the steps IRP took in the given circumstances and stated that the bank account of the Corporate Debtor was being used without prior approval of the IRP in breach of directions passed by this Tribunal. 6. The IRP prayed that the interim Orders should be modified. 7. Our Order dated 5th December, 2019 reads as under:- "05-12-2019 1. Counsel for Appellant wants to file Rejoinder. Rejoi....
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....te, the Appeal as well as the IA No.3878/2019 filed by the IRP will be taken up together for hearing. 8. The Reply may be filed by the Appellant as well as Shri Deepak K. Daga by 16th December, 2019. The Appeal as well as the Application to be heard on 17thDecember, 2019." 8. The matter was then posted to 17th December, 2019. On that date, the learned Counsel for the Appellant referred to Replies (Diary Nos.17047 and 17048) filed by Manoj K. Daga and Deepak Daga to I.A. No. 3878 of 2019. The Replies tried to justify that management was vehemently contesting the initiation of CIRP and that there was uncertainty in employees; that withdrawals made were only for running of the Company. Counsel for Appellant stated and we observed as under:- "6. Learned Counsel for the Appellant and Mr. Deepak Daga (Respondents in I.A.), fairly states that as per the order dated 23-10-2019, the authorised person could sign the Bank Cheques but only after the approval of the IRP, but approval was not taken while making the withdrawals. Learned Counsel is trying to refer to the Affidavits filed to state that the withdrawals were justified withdrawals for making payments to the suppli....
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....2019 (Interim Order passed by this Hon'ble Tribunal) Sl. No. Name of the recipient Date Amount transferred (in Rs. ) 1. Deepak Kumar Daga 16-10-2019 1,65,000/- 2. PAC Power 16-10-2019 2,00,00,000/- 3. Deepak Kumar Daga 17-10-2019 3,05,000/- Total Amount 2,04,70,000/- " "APPENDIX "C" Withdrawals made by the (Suspended) Board of Directors from 25-11-2019 (Date of Filing of I.A. 3878 of 2019) till 17-12-2019 (Date of Modification of the Interim Order dated 23-10-2019) Sl. No. Name of the recipient Date Amount transferred (in Rs.) 1. Cholamandalam-Investme 25-11-2019 70,000/- 2. Charges for NEFT Customer Payment: SO1146735196 25-11-2019 1.40/- 3. Chhattisgarh State Power 25-11-2019 4,00,930/- 4. Charges for RTGS Customer Payment: VIJBH19329020733 25-11-2019 7.22/- 5. Lokesha Chourasia 25-11-2019 2,17,886/- 6. Charges for RTGS Customer Payment: VIJBH19329020101 25-11-2019 7.22/- 7. Deepak Kumar Daga 26-11-2019 5,80,000/- 8. SMS Charges 19-12-2019 29.50/- Total Amount 12,68,861.34/- " 10. Counsel f....
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.... filed Affidavits. The Affidavit filed by Shri Deepak Daga is at Diary No. 18601. It is along with Undertaking. The other Respondent - Manoj Daga has tendered Affidavit at Bar along with Undertaking dated 5thFebruary, 2020. Shri Manoj Daga is present and states that Deepak Daga had attended this Court in the morning but as he was not feeling well, he has left. The learned Counsel - Ms. Prachi Johri and Shri Abhijeet Sinha are present for both these Respondents (in I.A.) and state that these Respondents have understood the Affidavits which are tendered and after understanding the Undertakings they have signed the same. The Affidavits and Undertakings of both these Respondents are accepted and taken on record. These Respondents shall comply with the Undertaking given. The learned Counsel for IRP accepts that Rs. 5,50,12,146/- needs to be returned. The learned Counsel for the Appellant states that the Appellant is taking steps to settle the dispute with the Original Operational Creditor as well as sole Financial Creditor - State Bank of India and will make efforts to settle with other Operational Creditors also. The Counsel makes request to continue the Interim Order not to c....
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....o solemnly undertake that If the Hon'ble Appellate Tribunal grants me time of 4 weeks from 05 02 2020 i.e., time upto 04 03 2020, I shall deposit a sum of Rs. 5,50,12,146/- (Rupees Five Crore Fifty Lakh Twelve Thousand One Hundred and Forty Six only) into the account number 763600591000005 in the name of Shre Vishnu Power and Energy Pvt Ltd maintained with Vijaya Bank, Rajnandgaon branch, Chattisgarh within 4 weeks. I have already deposited a sum of Rs. 1,22,00.000/- in the aforesaid account as follows: Date Amount 25-1-2019 Rs. 7,00,000/- 20-1-2020 Rs. 40,00,000/- 23-1-2020 Rs. 50,00,000/- 28-1-2020 Rs. 25.00,000/- TOTAL Rs. 1,22,00,000/- 15. The proceeding dated 26th February, 2020 shows the further developments as under:- "26-2-2020 Learned Counsel for the Appellant states that the Appellant has settled with the original Operational Creditor and is also making efforts to settle with the only Financial Creditor- State Bank of India and making efforts to settle with the other Operational Creditors who have responded to the IRP. Appellant may continue with the efforts stated being made with the Financial Creditor and Operational C....
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....f CIRP (Corporate Insolvency Resolution Process). The learned Counsel for the State Bank of India - the sole Financial Creditor which constitutes the COC (Committee of Creditors), submits that there is no settlement or possibility of settlement. It is stated that State Bank had to recover Rs. 45 Crores in September, 2019. 18. The learned Counsel for IRP submits that these Directors had withdrawn most of the amount of the Corporate Debtor after the CIRP had been initiated which is clearly not permissible when the moratorium had been applied. The learned Counsel for IRP states that COC meeting has been held on 6th March, 2020 but if the IRP is unable to give effect, the CIRP itself would get stranded or stayed and given the fact that the amounts withdrawn were withdrawn in an illegal manner after moratorium had been imposed, no further time needs to be given. Learned Counsel states that the IRP is under the responsibility under the provisions of IBC to keep the Corporate Debtor a going concern and if almost the whole money which was in the bank account, has been withdrawn, the IRP has been rendered helpless in the situation. 19. The learned Senior Counsel for the Appellant stat....
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....eginning were aware of nature of the acts they were committing in the illegal withdrawals. They disobeyed Orders of Adjudicating Authority and this Tribunal wilfully and there is wilful non-compliance of undertakings given. I.A. No. 1075 of 2020 to seek time to comply undertaking is not honest and appears to have been filed to create grounds of defence to further abuse process to kill time. The I.A. is rejected. The acts of the two Directors have obstructed the proceedings of CIRP, the proceedings before Adjudicating Authority and this Tribunal. The acts prima facie disclose serious Contempt, violating mandate of law of IBC applied by Orders of Adjudicating Authority and this Tribunal and breach of undertaking given on oath, actionable as NCLT established under the Companies Act, 2013 acts as Adjudicating Authority and this Tribunal is empowered under section 425 of Companies Act, 2013 read with enabling provisions to take action. 23. At the same time, considering record which shows that Appellant violated Orders of Adjudicating Authority and this Tribunal and looking to the apparent default on record where undertakings were given and not honoured, we find that the Appeal deserv....