AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2020 (2) TMI 1340
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....ate Debtor'). 2. Brief facts of the present case are as under: 2.1 The Corporate Debtor was incorporated on 17.05.2006 for manufacture of pharmaceuticals. The authorized share capital of the Corporate Debtor is Rs. 8,00,00,000/- (Rupees Eight Crores Only) divided into Rs. 80,00,000/- (Eighty Lakhs) Equity shares of 10/- each. Whereas, the paid-up capital is Rs. 7,38,50,000/- (Rupees Seven Crores Thirty Eight Lakhs Fifty Thousand Only) divided into 73,85,000 (Seventy Three Lakhs Eight Five Thousand) Equity shares of 10/- each. 2.2 That the Corporate Debtor was in need of fund to complete the construction of factory for carrying out the manufacture of pharmaceuticals and approached the Petitioner No. 1 for seeking financial assistance and he extended an unsecured loan of Rs. 1,07,62,000/- (Rupees One Crore Seven Lakhs Sixty Two Thousand only) from 15.11.2011 to 28.09.2014. 2.3 That in addition to the above said unsecured loans the Petitioner No. 1 had also advanced an amount of Rs. 2,74,65,773/- (Rupees Two Crores Seventy Four Lakhs Sixty Five Thousand Seven Hundred and Seventy Three only) by repaying outstanding dues of the Corporate Debtor to third parties. In total th....
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....financial creditors, aggrieved with the same the financial creditors have jointly invoked Section 7 of Insolvency and Bankruptcy Code, 2016 and filed a joint Petition before this Adjudicating Authority and the same was numbered as CP (1B) No.81/7/HDB/2017. 2.10 That there were some defects in the said Petition filed by the financial creditors, hence the counsel for the financial creditors decided to withdraw the Petition for rectifying the defects. Accordingly this Adjudicating Authority granted permission to the financial creditor to withdraw the Petition vide order dated 08.08.2017. 2.11 That when the matter stood thus, the Corporate Debtor had fraudulently filed an Application under Section 131 of the Companies Act, 2013 seeking revision of financial statements or Board Report. 2.12 That the Financial Creditors 1 to 3 apprehended that the Corporate Debtor filed that Application with a mala-fide intention of removing the names of the financial creditors as admitted by them in the Financial Statements which was already filed by the Corporate Debtor with the Registrar of Companies whereby Corporate Debtor admitted the existence of the liability and filed an application vide ....
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.... financial creditor of the Respondent Company viz. showing finished goods of the Respondent Company as Cash Sales without recording the same in the books of accounts, depositing the cash amounts realized from cash sales in her own personal account, bringing back the arnount so deposited in the personal account in the bank account of the Respondent Company as unsecured loans. 4.3 That the Petitioner No. 3 advanced the loans to the Respondent Company from his personal account and also from his HUF. It is a matter of elementary of knowledge that "Individual" and "HUF" are two distinct entities and a single petitioner cannot make a claim on behalf of both who allegedly made a claim against the Respondent Company. Section 3(23) of the Code defines the terms "Person" which clearly shows that an "Individual" and "HUF" are two separate person. It is also to be noted that even if the claim has been taken into consideration, the amount claimed by Petitioner 3 is barred by limitation and the demand is baseless without any enforceable right. Further it is pertinent to note that Petitioner No. 3 is not related to the Respondent Company in any way and the current management of the Respondent ....
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....ered Accountants to conduct Financial Due Diligence and hence the Board appointed them. M/S. Chanamolu & Co., Practicing Chartered Accountants conducted Financial Due Diligence based on the information and documents provided to them by Petitioner No. 1 and 2 as they were controlling and managing the complete business of the Respondent Company. M/S. Chanamolu & Co. in its Financial Due Diligence Report dated 21.07.2015 had provided certain vital observations. 4.7 Further, being unsatisfied with the Financial Due Diligence Report as the same did not cover all the aspects, Mr. Sailendra sent an email on 29 th July, 2015 to Mr. Kiran from BK and Associates enquiring about certain pending observations which were not included in the due Diligence Report. In reply to the said email, Mr. Kiran sent a reply on 1 st August, 2015 stating the following reply: 4.7. a The details of plant and machinery purchased and their bills and invoices are not provided to verify and report them; 4.7.b Details of Agreements during transfer of shareholding/ takeover from the previous owners are not provided to verify and report on them. 4.8.c Books of accounts is available for financial year 2012-20....
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....me was not made for the Company's purpose. That the repayment of loans of M/S. Thiru Pharmaceuticals on behalf of Ms. K. Vijaya Reddy, erstwhile Managing Director of the Respondent Company and sister of Ms. Jaya Reddy, Director of the Respondent Company were in no way relating to the Respondent Company and or they are outstanding liabilities of the Respondent Company. Infact there are no business transactions between M/S. Thiru Pharmaceuticals and Respondent Company. The amounts were credited to the loan account of Petitioner No. 1 with a corresponding debit account to the account of Petitioner No. 2. 4.11 That the Petitioner No. 1 in the Petition states that he had granted unsecured loans to the Respondent Company in the year 2012 for payment to the creditors of the Respondent Company. On demanding proofs for the same, the Petitioner No. 1 in the Rejoinder filed by them enclosed a fabricated and unreliable document which was given by Ms. Vijaya Reddy (sister of Petitioner No. 2) to Petitioner No. 1. A simple glance of the letter will show that the said letter is fabricated letter. The contents of the letter are as follows: "Our Company is in need offunds to sustain the o....
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....6,90,000/- 9 N. Pavan Kumar Rs. 1,50,000/- 10 Sailendra Loan Rs. 5,20,160/- 11 S. P. Kiran Loan Rs. 4,00,000/- 12 V. Aarthinarayan Rs. 1,70,000/- Grand Total Rs. 3,86,42,365/- For the period 01.04.2015 to 31.03.2016   6.1 It is stated by the learned counsel of Petitioner that the Corporate Debtor did not dispute the above figures and in fact admitted the various unsecured loans extended by the four Petitioners. Balance Sheet for the year 2014-15 also confirms unsecured loan of the Corporate Debtor. 7. The present petition was filed on 08.08.2018 and after scrutiny the same was first listed on 23.08.2018 and the counsel for Financial Creditor was directed to issue notice to the Respondent/ Corporate Debtor for appearance and the matter was adjourned to 19.09.2018. 7.1 During the hearing held on 19.09.2018, Mr. Y. Suryanarayana, counsel filed vakalat for the Corporate Debtor and prayed time for filing counter. At his request, time was enlarged. The matter was adjourned to 23.10.2018. 7.2 During the hearing held on 23.10.2018, counsel for the Respondent prayed time and stated that there is need to examine the crucial documen....
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....so been filed by the Petitioner as evidence, which has not been disputed by the Corporate Debtor. 12.However, a petition under section 131 of the Companies Act, 2013 has been filed by the Corporate Debtor for revision of accounts, the maintainability of which is under challenge. 13.Considering the fact that Petitioners have been shown as unsecured related party creditors of in its Balance Sheet, which has not been challenged by the Corporate Debtor, this Adjudicating Authority is of the view that the Petitioners are Financial Creditors of the Corporate Debtor to the extent of financial debts admitted in the Book of Accounts of the Corporate Debtor. Accordingly, this Adjudicating Authority is inclined to admit the instant application filed under section 7 of the Code. 14.The instant petition is hereby admitted and this Adjudicating Authority Orders the commencement of the Corporate Insolvency Resolution Process which shall ordinarily get completed as per the time line stipulated in section 12 of the 1B Code, 2016, reckoning from the day this order is passed. 15.This Adjudicating Authority hereby appoint Mr. Venkateswarlu Kari having Regn. No. IBB1/1PA-001/1P-P00052/2017-2018/10....