TaxTMI 
TaxTMI 
2021 (8) TMI 1240
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....liefs, as contained in the Petition and which are as follows: Interim Reliefs: I. That the Petitioner be permitted to serve the Respondents Through Joint Director working in office of post, publication in the newspapers, email, WhatsApp messaging, wherever required, in order to ensure due service of notice to all Respondents present in India and overseas; II. That the Respondent Nos. 2 to 6 be immediately directed to disclose on affidavit their moveable and immovable properties/assets, including bank accounts, owned by them in India or anywhere in the world; III. That the Central Depository Services Ltd. (CDSL) and National Securities Depository Ltd. (NSDL) be directed that securities owned/held by the Respondent nos. 2 to 6 in any company/society be frozen, and be prohibited from being transferred or alienation and details thereof be shared with the Petitioner; IV. That the Central Board of Direct Taxes (CBDT) may be directed to disclose information about all assets of the Respondent nos. 2 to 6, in their knowledge or possession, for the purpose of freezing and restrain on alienation of such assets; V. That the Indian Banks Associati....
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....adings that the balance sheets of the flagship company, i.e. Videocon Industries Ltd., the reserves and surplus as declared in the financial statements in the year 2014 as Rs. 10,028.09 crores (in December, 2014) and the same is declared as Rs. (-)2,972.73 crores in the F.Y. ended 2019, showing the steep downfall in the reserves and surplus just within the period of five years. The same is the case when it comes to secured loans wherein it is declared as Rs. 20,149.23 crores in the year 2014 and the same increased to Rs. 28,586.87 crores in the year 2019, showing a steep rise in the loan component. 5. Coming to the investment in the year 2014, the Company recorded Rs. 5,626.93 crores and the same is increased to Rs. 9,635.75 crores, showing a rise in the investment but according to the Petitioners, the amount so invested by the Company is, in fact, dead investment which ought not to have been made by the company in any prudent manner, in view of the accumulated/loans resulting into depletion of networth of the company. This is also reflected in the adjusted Profit and Loss Account wherein in 2014, it is shown as Rs. 3.04 crores and the same is shown as Rs. (-)5,347.41 crores in th....
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.... out of the receivable to Respondent No. 1 from 36 entities, aggregating to Rs. 2,891.3 crores, an aggregated amount of Rs. 1,209.25 crores was settled against the amount payable by Respondent No. 1 to the 19 entities as per the table contained below: 10. The Auditor was tasked to perform transaction review and identify transactions undertaken by the Respondent No. 1 in the review period which fall within any of the following categories: (i) Preferential transactions under Section 43 of the Code (ii) Undervalued transactions under Section 45 of the Code (iii) Extortionate credit transactions under Section 50 of the Code and (iv) Fraudulent transactions under Section 66 of the Code. 11. The entire table as contained above clearly shows that while the receivables amount was Rs. 2891.3 crores, the payable amount adjusted was at Rs. 1,209.25 crores. The Auditor stated that on inquiring with the Respondent No. 1 above settlements, ascertaining whether any approval was sought from the Joint Lender Forum and Board of Directors of Respondent No. 1, in reply it was stated the same have been recorded on approval from only Mr. Venugopal Dhoot, Respondent No. ....
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....d documents, the Auditor has stated that it has not been able to establish the appropriateness or the business rationale of the above mentioned transactions. In view of the failure of the representatives of the Respondent No. 1 to supply any supportive information or documents, adverse inference must be taken against as these were not undertaken during the 'ordinary course of business'. Further, the auditor too has not made any qualifying remarks in his report vis-à-vis transactions mentioned in Table 1, which goes to show that the auditor's involvement in respect of purported fraud in Respondent Companies. 16. In the light of the evidences reviewed by the auditor, arguments held and observations of the transaction auditor, the Audit report concludes that the transactions mentioned in Table 1 have had an effect of putting such creditor entities connected/known to the Respondent No. 1(whose payable balances aggregating to Rs. 1,209.25 crores have been settled with receivables from other entities) in a beneficial position than they would have been in the event of distribution of assets being made in accordance with Section 53 of the Code. Accordingly, the Auditor ....
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....ssional for writing off the advances and backdating the same. The written request for such approval were sent to the Respondent No. 1 vide email dated 04.02.2019. The email dated 04.02.2019 is annexed to the Audit Report as Exhibit 33. 21. It has also been mentioned that the Auditor made several inquiries with the erstwhile management of the Respondent No. 1. The writing off of Rs. 931.45 breakup is tabulated hereunder. 22. Basing on the above observations made by the Auditor, the Petitioner states that Respondent No. 1 and other connected declared group entities have not come clean before this Bench which goes to show the prima facie that Respondents were directly involved in the objectionable transactions with regard to the affairs of the Company. This preferential and fraudulent transactions are the same with regard to the other companies as contained in the above cause title. We have also perused the pleadings made in the above said petition wherein the contentions raised by the parties are one and the same and the transaction audit report is also more or less point out fraudulent conduct of erstwhile management. There has been thorough leakages taken place which has got a re....
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....sent actions are covered within the scope of Section 241(2) of the Act. 28. The proviso 241(2) "The Central Government, if it is of the opinion that the affairs of the company are being conducted in a manner prejudicial to public interest, it may itself apply to the Tribunal for an order under this chapter." 29. The use of words "are being conducted", does not mean it does not cover the past acts. It is to be interpreted that the acts so mentioned in the above proviso also indicates past acts of mis-management, the present acts of mis-management and also to contain the future acts, especially when it comes to dealing with fraudulent transactions. In this present case, the company is still in operation under the control of RP and hence all the acts so mentioned are not just past continuous but also present perfect continuous. 30. Further it is argued that Section 14(1)(a) of IBC which clearly shows that the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgement, decree or order in any court of law. 31. The cover under moratorium and the same could not be instituted or proceeded with. This is not a pr....
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....unal direct: I. That the Petitioner is permitted to serve the Respondents Through Joint Director working in office of post, publication in the newspapers, email, WhatsApp messaging, wherever required, in order to ensure due service of notice to all Respondents present in India and overseas; II. That the Respondents (except companies) are immediately directed to disclose on affidavit their moveable and immovable properties/assets, including bank accounts, owned by them in India or anywhere in the world; III. That the Central Depository Services Ltd. (CDSL) and National Securities Depository Ltd. (NSDL) is directed that securities owned/held by the Respondents (except companies) in any company/society be frozen, and be prohibited from being transferred or alienation and details thereof be shared with the Petitioner; IV. That the Central Board of Direct Taxes (CBDT) is be directed to disclose information about all assets of the Respondents (except companies) in their knowledge or possession, for the purpose of freezing and restrain on alienation of such assets; V. That the Indian Banks Association (IBA) is directed facilitate disclosure of the d....