TaxTMI 
TaxTMI 
2021 (6) TMI 192
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....ffected by the bank after June 14, 2017 (after initiation of moratorium) in the account of the corporate debtor. (iii) To pass an appropriate order for punishing the first and second respondent under sections 68 and 74 of the Code. (iv) To pass such further orders which this the hon'ble Tribunal may deem fit and proper in the circumstances of the case and render justice." 2. Learned counsel for the applicants submitted that the corporate debtor had filed an application under section 10 of the IBC, 2016 before this Tribunal and this Tribunal vide order dated June 14, 2017 had initiated the corporate insolvency resolution process (CIRP) against the corporate debtor and appointed one Mr. Muthuraju, the fourth respondent herein, as the interim resolution professional (IRP) and consequently, the applicant herein was appointed as the resolution professional (RP) in relation to the corporate debtor on September 20, 2017. 3. Learned counsel for the applicants submitted that the committee of creditors of the corporate debtor in its 6th meeting held on December 8, 2017 had passed a resolution unanimously to liquidate the corporate debtor and that this Tribunal vide order dated Janu....
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....submitted by learned counsel for the applicant that the first and second respondent who were in the management of the corporate debtor concealed the bank account held in the Bank of India and swindled the entire Income-tax refund which is the property of the corporate debtor, in contravention of moratorium and thereby attracting the provisions of sections 68 and 74 of the IBC, 2016. 7. Under such circumstances, learned counsel for the applicant submitted that the first and second respondent are responsible to contribute the monies fraudulently transferred after June 14, 2017 more particularly a sum of Rs. 79,65,070 in violation of section 14(b) of the IBC, 2016 and as such sought for the reliefs as extracted supra. 8. Counter filed by the first and second respondent 8.1. Learned counsel for the first and second respondent submitted that the present application is neither maintainable in law nor on facts as the same is ultra vires the liquidator. It was submitted that the present application is filed to falsely implicate these respondents. 8.2. It was submitted that the CIRP in relation to the corporate debtor was initiated on June 14, 2017 and the fourth respondent was appointe....
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....erification from the website of the National Company Law Tribunal, the third respondent had come to know about the CIRP in relation to the corporate debtor had already been initiated on June 14, 2017 and moratorium declared under section 14 of the IBC, 2016. 9.2. It was submitted that the fourth respondent/erstwhile IRP did not inform the admission order passed by this Tribunal and his appointment as the IRP to the third respondent and as such the third respondent was kept in the dark about the above proceedings. 9.3. It was submitted that in the usual course of business, a sum of Rs. 79,65,070 was received in the current account bearing No. 821420110001141 of the corporate debtor on June 29, 2019 and in the absence of any information or knowledge about the initiation of the CIRP in relation to the corporate debtor, the third respondent permitted the usual banking operations to the said account holder and almost the entire amount of Rs. 79,65,070 was withdrawn from the account by way of clearing instruments, payments by way of RTGS/NEFT at the instructions of the said creditors/account holder. 9.4. It was submitted that only when the applicant herein approached the third respond....
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....hat the impugned transfers from the bank account were not done with the knowledge of the IRP and hence the applicant/liquidator has to proceed by filing of avoidance transactions under the provisions of the IBC, 2016. It is also stated in the counter that since the CoC had at that time refused to pay the fee towards the services as IRP, the third respondent has requested the promoters to pay the same and that they have transferred the amount from the Bank of India through NEFT/ RTGS which came to the knowledge of the applicant only after filing of the present application. Thus, it was submitted that the prayers as sought for by the applicants are made without any jurisdiction. 11. Findings of this Tribunal 11.1. It is required to be noted that upon an application originally filed by the corporate debtor under section 10 of the IBC, 2016 seeking thereof to initiate the CIRP against itself the same came to be admitted by this Tribunal on June 14, 2017. As per the provisions of the IBC, 2016 once an application under section 7, 9 or 10 of the IBC, 2016 is admitted by the Adjudicating Authority, the moratorium as envisaged under section 14 of the IBC, 2016 irrespective of who had ini....
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....f moratorium, except where such corporate debtor has not paid dues arising from such supply during the moratorium period or in such circumstances as may be specified. (3) The provisions of sub-section (1) shall not apply to- (a) such transactions, agreements or other arrangement as may be notified by the Central Government in consultation with any financial sector regulator or any other authority ; (b) a surety in a contract of guarantee to a corporate debtor. (4) The order of moratorium shall have effect from the date of such order till the completion of the corporate insolvency resolution process : Provided that where at any time during the corporate insolvency resolution process period, if the Adjudicating Authority approves the resolution plan under sub-section (1) of section 31 or passes an order for liquidation of corporate debtor under section 33, the moratorium shall cease to have effect from the date of such approval or liquidation order, as the case may be. (*Provisions inserted only with effect from December 28, 2019 and not prevalent at the time of initiation of CIRP on June 14, 2017 of the corporate debtor)." Further, section 17 of the IBC, 2016 sets out ....
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....rate debtor, including information relating to- (i) business operations for the previous two years ; (ii) financial and operational payments for the previous two years ; (iii) list of assets and liabilities as on the initiation date ; and (iv) such other matters as may be specified ; (b) receive and collate all the claims submitted by creditors to him, pursuant to the public announcement made under sections 13 and 15 ; (c) constitute a committee of creditors ; (d) monitor the assets of the corporate debtor and manage its operations until a resolution professional is appointed by the committee of creditors ; (e) file information collected with the information utility, if necessary ; and (f) take control and custody of any asset over which the corporate debtor has ownership rights as recorded in the balance-sheet of the corporate debtor, or with information utility or the depository of securities or any other registry that records the ownership of assets including- (i) assets over which the corporate debtor has ownership rights which may be located in a foreign country ; (ii) assets that may or may not be in possession of the corporate debtor ; (iii) tangible ....
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....ctions 17 and 18 of the IBC, 2016. Further, in the application filed under section 10 of the IBC, 2016 the corporate debtor itself in the provisional balance-sheet filed as on February 28, 2017 has disclosed the details of banks in which they are maintaining the accounts wherein the name of the third respondent is also disclosed therein. In such circumstances, immediately after the admission of the petition by this Tribunal on June 14, 2017 if the fourth respondent had taken efforts to peruse the records, he could have intimated all the concerned bank authorities including the third respondent-bank about his appointment as IRP and under the circumstances, the present impugned transactions could have been avoided. Hence, the fourth respondent just cannot shy away from his duty/responsibility by stating that the CoC was not co-operating and there seems to be a serious omission on the part of the fourth respondent in this regard in performing his duties. 11.4. Admittedly, the transaction to the tune of Rs. 79,65,070 took place after the moratorium order was passed by this Tribunal on June 14, 2017. In fact the said sum of Rs. 79,65,070 as per the statement given by the third responde....
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....orporate debtor during the insolvency resolution, can be inquired into by the Adjudicating Authority under section 66. Section 69 makes an officer of the corporate debtor and the corporate debtor liable for punishment, for carrying on transactions with a view to defraud creditors. Therefore, the National Company Law Tribunal is vested with the power to inquire into (i) fraudulent initiation of proceedings as well as (ii) fraudulent transactions. It is significant to note that section 65(1) deals with a situation where CIRP is initiated fraudulently 'for any purpose other than for the resolution of insolvency or liquidation'." (underline supplied) Thus, by taking into consideration the decision of the Supreme Court in Embassy Property Developments P. Ltd. v. State of Karnataka [2020] 9 Comp Cas-OL 609 (SC) ; [2020] 13 SCC 308 and also by applying the same to the facts of the present case, we are of the view that section 66(1) of the IBC, 2016 can be invoked in the present case, wherein the first and second respondent after knowing that an order of moratorium has been imposed against the corporate debtor that too at its own instance and that their powers stood suspended ther....
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....olution Professional for National Plywood Industries Ltd. v. JSVM Plywood Industries Ltd. [2021] 226 Comp Cas 332 (SC) in Criminal Appeal No. 447 of 2021, wherein an issue similar to the present one of withdrawal of monies from the accounts held with the bank of the corporate debtor by the board of directors whose powers stood suspended, after declaration of moratorium, consequent to the admission of a petition under the provisions of the IBC, 2016 fell for consideration and at paragraph No. 18 in the course of its judgment has stated as follows (page 343 of 226 Comp Cas) : "The provisions of the IBC contemplate resolution of the insolvency if possible, in the first instance and should it not be possible, the winding up of the corporate debtor. The role of the insolvency professional is neatly carved out. From the date of admission of application and the appointment of interim resolution professional, the management of the affairs of the corporate debtor is to vest in the interim resolution professional. With such appointment, the powers of the board of directors or the partners of the corporate debtor as the case may be are to stand suspended. Section 17 further declares that th....