TaxTMI 
TaxTMI 
TaxTMI 
2022 (5) TMI 433
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.... herein to make good the losses caused on account of the fraudulent transactions entered into by them and refer the matter to IBBI in view of the provisions under Sections 236 of the Code. 3. Succinctly put, the facts in brief are that the 'Corporate Debtor' is in the courier business and was earlier known as Committed Worldwide Express Private Limited. It was averred that prior to December 2018, there were five Directors in the Company namely: 1. Mr. Nitin Bharal 2. Mr. Narendra Bisht 3. Mr. Rajeev Sharma 4. Mr. Yashpal Arora 5. Mr. Sujeet Kumar Chaudhary 4. The Directors mentioned in Sl. Nos. 1 to 4 are the Promoters who collectively owned 100% shareholding in 'Stock Flow Express Private Limited'. While so, on 27/12/2018, Mr. Shiv Kumar Chaturvedi was appointed as Director in the Company and on 31/12/2018, the Directors mentioned in Sl. No.1-4 resigned from their posts. It is stated that in the month of August 2019, Mr. Sujeet Kumar Chaudhary arrayed as a Director in Sl. No. 5 passed away and therefore effectively only Mr. Shiv Kumar Chaturvedi was the Director in the Company. As the 'Corporate Debtor' did not have any 'Financial Creditor' who is not a related party, ....
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....mitted Cargo Care Private Limited' has started operating in the courier business and the CoC Members advised the IRP that since the COC Members (other 'Operational Creditors' who are the CoC Members) are operating in the same market they have come to know that the Promoters were doing courier business in the related entity. It was averred that this business to the related entity was done to influence the Debtors of the 'Corporate Debtor' and misuse the amount receivable for the benefit of the related parties. It is also stated that the IRP approached Debtors YK Logistics and YK International who owes Rs.20,12, 383/- and Rs.22,20,651/-, as per the books of the 'Corporate Debtor', for recovery of the due amounts and was informed by the Debtors for an amount of Rs.3 lakhs was received by the 'Corporate Debtor' in cash as full and final settlement, while Mr. Shiv Kumar Chaturvedi, the current Director claims that the signature on the NOC was forged. Another Director by name RJ Logistics Services LLP owed Rs.10,71,250/- to the 'Corporate Debtor' which was also written off apart from other debts. It was averred that the IRP received cash from these debtors, issued large amount of credit ....
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....the Application preferred by the IRP, concluded as follows: "28. In view of the discussion made above, we are of the considered view that the cash transactions and the written off debt made with respondent Nos. 9 and 10 comes under the category of fraudulent transaction and same was done during the tenure of Respondent No. 1 to 4 and even after their resignation, they were having financial control in the affairs of the corporate debtor, therefore they are liable for these transactions. So far respondent No. 5 is concerned, since he is paid director and appointed on 27.12.2018, therefore, he is not responsible for any act or omission made by or on behalf of the Corporate Debtor. Similarly, respondent Nos. 6, 7 and 8 are also not held liable under Section 66 of the IBC. 29. Therefore, we find and hold the respondent Nos. 1 to 4, the Suspended Board of Directors/Promoters of the Corporate Debtor have been carried on business with intent to de-fraud the creditors of the Corporate Debtor or with fraudulent purpose and in this way, they have written off the debt of respondent No. 9 & 10 and also settled the amount on the payment of Rs. 3 lakhs against the total debt of Rs.42,33,304/-....
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....rate insolvency resolution process or a liquidation process, it is found that any business of the corporate debtor has been carried on with intent to defraud creditors of the corporate debtor or for any fraudulent purpose, the Adjudicating Authority may on the application of the resolution professional pass an order that any persons who were knowingly parties to the carrying on of the business in such manner shall be liable to make such contributions to the assets of the corporate debtor as it may deem fit. (2) On an application made by a resolution professional during the corporate insolvency resolution process, the Adjudicating Authority may by an order direct that a director or partner of the corporate debtor, as the case may be, shall be liable to make such contribution to the assets of the corporate debtor as it may deem fit, if- (a) before the insolvency commencement date, such director or partner knew or ought to have known that there was no reasonable prospect of avoiding the commencement of a corporate insolvency resolution process in respect of such corporate debtor; and (b) such director or partner did not exercise due diligence in minimising the potential loss to ....
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....Transaction Auditor not to have prepared the Report. It is also deposed by the IRP in his Affidavit, filed before the Adjudicating Authority in compliance of the Order dated 21/10/2020 that it was only on account of complete non-cooperation from the Appellants herein that conscious efforts were made by the IRP to ascertain the nature of transactions that were entered into by the Appellants herein. 16. Section 18 of the Code deals with duties of the IRP: "18. Duties of interim resolution professional.-The interim resolution professional shall perform the following duties, namely:- (a) collect all information relating to the assets, finances and operations of the corporate debtor for determining the financial position of the corporate 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 ....
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....hiv Kumar Chaturvedi was appointed as the sole Director to manage the affairs of the Company. It is significant to mention that Mr Shiv Kumar Chaturvedi was appointed only three days prior to their resignation, i.e., on 28/12/2018. There are no substantial reasons given for the share sales transactions, whereby the four Promoters sold their 100% shareholding to a related concern namely Committed Cargo Care Limited on 20/10/2017 when the Appellants were the Directors and subsequent to the resignation on 31/03/2018, i.e., about five months later, the same Committed Cargo Care Limited sold a part of its shareholding in the Corporate Debtor Company i.e., (Stock Flow Express Private Limited Company) to the four Promoter/Directors. In the absence of any relevant grounds, raised in this Appeal, we concur with the findings of the Adjudicating Authority that the four Promoters/ex-Directors of the 'Corporate Debtor' failed to explain the objective of making the circuitous share transactions between the Companies where they were all common Directors. 19. The Adjudicating Authority has also reproduced the bad debts which were written off during the year 2017-18, the period when the Appellants....
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....ation that is respondent no. 10 RJ Logistics Services LLP with Mr. Rohit Jasoria as the designated partner and RJ brother with Mr. Rohit Jasoria owes the debt of Rs.10,71,250/- and Rs.13,06,702/- respectively and their debts are also written off. The respondent No.9 and 10 by filing their reply claimed that they never owe any debt and they are not the debtor of the Corporate Debtor. The respondent No. 9 further claimed that the amount had already been settled after making the payment of Rs.3 lakhs. We failed to understand how the Rs.42,33,304/- will be settled only on the payment of Rs. 3 lakhs. Therefore, we are of the considered view these transactions also comes under the category of the fraudulent transactions. (Emphasis Supplied) 22. A perusal of the scanned copy of the Bank Statement evidences that the Adjudicating Authority has rightly concluded that there are no reasons given for how an amount of Rs.42,33,304/- has been settled for a mere payment of Rs.3 Lakhs/-. This fraudulent transaction took place during the time the Appellants were Directors of the 'Corporate Debtor' and squarely falls within the ambit of Section 66 of the Code. 23. Keeping in view, the copy of the....