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TaxTMI 
TaxTMI 
2022 (7) TMI 1122
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.... this Applicant/Resolution Professional, he contacted the erstwhile Directors of the Corporate Debtor and intimated them of the initiation of the CIRP and requested them to provide him necessary information and records of the Corporate Debtor. 4. The applicant, in the first meeting of the CoC held on 25th September, 2019, informed the CoC that he had not received much information from the Corporate Debtor and the Corporate Debtor had provided him with a copy of FIR, which he had filed earlier, wherein it was stated that a theft has taken place in the factory. The applicant further informed the CoC that the Corporate Debtor's business operations were suspended since 2015 and Annual Accounts of the company were filed till financial year 2013-14 with the RoC. 5. It is submitted by the applicant that since the applicant did not receive any cooperation from the officials of the Corporate Debtor, the applicant filed an application under Section 19(2) of the Code and vide order dated 16th December, 2019 the officials of the Corporate Debtor were directed to cooperate with the applicant. Thereafter, the suspended Board of Directors provided some documents and information but the same....
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....et as is and where is basis without taking concern of the employees, financial institutions, lenders, outsiders etc. who may be directly or indirectly associated with the company. ii. Inventories Due to non submission of any evidence in support to the existence of inventories, the value of inventories as recorded in the books of account for the year ended 31-03-2014 seems to be inflated/fake. Since there are no records available or explanation, they are presumed to be taken away/sold by the management and the proceeds being taken away for their personal benefit. iii. Trade Receivables We were neither provided the list of debtors nor their outstanding balances. The management had not provided with Tally data for the relevant period under audit showing whether it had not existed or even if they had existed. It appears to the sham and bogus, the amount of Trade Receivables are being drained off by the management for their own benefit and identical to deceit. Sales, purchases and other financial transactions done by the Corporate Debtor including the quantum of the dues to the West Bengal Sales Tax Department, hints at huge siphoning of the funds to ....
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....ly fraudulent in terms of Section 66 of the IBC,2016. In view of the above, it is submitted that these transactions are clearly within the definition of transactions to defraud creditors in terms of Section 66 of the IBC, 2016 and hence, the present application is being filed to reverse the effect of such transactions and seek orders in respect of the Respondents who knowingly carried on business in a fraudulent manner and are obliged to make such contribution to the assets of the Corporate Debtor as deemed fit and proper. Furthermore, the Directors of the Corporate Debtor are also obliged to make such contribution to the assets of the corporate debtor as deemed fit and proper. 12. It is further submitted that apart from the transactions being fraudulent, it is evident that the affairs of the corporate debtor were not being managed in a diligent manner and the conduct of the management of the corporate debtor reeks of siphoning off borrowed funds for a purpose other than the intended use. Additionally, the suspended board of directors are not cooperating with the Applicant and have not provided clear and complete books of accounts and other relevant information pertaining to the....
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....at the IMFL plant of the company at Plot No.S-1 Budge Budge Industrial Estate, Pujali, Kolkata-700138 and fire caused at the plant on 27th June, 2017, causing huge loss to the stock and plant premises". 17. The complainant who is one of the employees of the group company of the Corporate Debtor has lodged this FIR and submitted that; "..... ..... .... Due to certain reason the contract between the Madhusala Drinks (P)Ltd. and United Sprits Ltd.was terminated sometime in the year 2015 and as effect the production of the company was stopped and on 20th January 2016 the company issued the closure notice and informed all concerned authorities including the Police Station, Labour Commissioner, Officer of W.B. Commercial Taxes and others. The huge stock of finished goods and raw materials and plant machinery were lying ideal in the closed plant. The considering the value of the stock and machinery at the closed plant the management also appointed one Bengal Protective Guards (P) Ltd., a security agency, to protect the valuable stock and machinery at the closed plant". 18. It would be seen from the contents of the F.I.R., that due to the reason of the cont....
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....I.R. on record to wash their hands off all their faults and /or offenses under the law. The suspended directors have not been able to give any details as to how and when the security agency had been engaged and by whom, because there was no record to show any payment having been made to the security agency which was allegedly guarding the premises nor has any document been shown as to whether the premises, plant and machinery and the stocks stated to be lying in the premises were insured by the then Directors /respondents in the present application. 21. It is not understood why the Corporate Debtor had not insured this premises which allegedly had its plant and machinery along with other finished goods and raw materials lying therein. There is no further report as to what happened after lodging the F.I.R.. Simply, intimating the Police Authority that everything has been spoiled and is destroyed in the fire is not a sufficient and justifiable response from the Corporate Debtor, and it is unbelievable. 22. In the reply affidavit filed by Respondent No.1 Sarbjit Singal Johal for himself and on behalf of Respondent No.2. 23. It is submitted that the application is filed in gro....
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.... of attachment were issued by the Tax Recovery Officer in respect of the premises belonging to the corporate debtor over which the said facility is situated. By such order of attachment, the Commissioner of Commercial Taxes, Government of West Bengal had prohibited and restrained the Corporate Debtor for transferring or charging the property attached. iii. In the light of the said order of attachment by the West Bengal Sales Tax Authority, the Respondent herein had no means of accessing the said facility and ensuring the safe keeping of the fixed assets situated thereat. In the light of the attachment of the said facility of the Corporate Debtor by the West Bengal Sales Tax Authority, the Corporate Debtor was compelled and constrained to declare a lockout of the said facility with effect from 20 January, 2016. A copy of the closure notice dated 20th January, 2016 is annexed as Annexure-B to the reply affidavit. iv. As the Corporate Debtor had defaulted in its repayment obligations to the State Bank of India, the account of the Corporate Debtor with State Bank of India, the account of the Corporate Debtor with State Bank of India was declared an NPA (Non-Performing....
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....has admitted that as per the FIR dated 1st July, 2017, the said premises under the possession of the State Bank of India since 20th January, 2017 which is prior to the incident of fire at the said premises. 28. Similarly, as regards the Trade Receivables, the Respondents submitted that pursuant to a garnishee order dated 9th November, 2015 issued by the West Bengal Sales Tax Authority, the Sales Tax Authority had attached the trade receivables of the Corporate Debtor and the said Authority had pursuant to said garnishee order recovered a sum of Rs.6,73,63,457/- from the Corporate Debtor (Annexure-G to the reply affidavit). 29. Pursuant to the garnishee order dated 9th November 2015, the bank account of the Corporate Debtor maintained with HDFC Bank was also attached by the West Bengal Sales Tax Authority, and all proceeds from the business of the Corporate Debtor credited in the said account were forfeited by the West Bengal Sales Tax Authority. The Respondents have, therefore, submitted that this application is not maintainable and harrassive in nature is liable to be dismissed. 30. In the Rejoinder, the applicant submitted that the allegations made in the reply affidavit....
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....ir possession up to the financial year 2016, even if that the contention is accepted the movement of the inventories since the Financial year 2013 -2014 was intentionally never produced to the applicant. It is stated that no record relating to the receivable by the Corporate Debtor has never been produced. It is submitted that the accounts and records of tally data whether in the soft format or the hard copy has never been submitted with the applicant. The whole exercise for holding back the information has been done to defraud the creditor, which is detrimental to the interest of all the stakeholders. The applicant, therefore, submitted that the application should be admitted, and the respondents should be directed to contribute to the liquidation account and further orders be passed for investigation into the affairs of the Corporate Debtor. 35. We have seen the application and documents placed on record by the applicant, it appears that the respondents have sold out the fixed assets without passing it through the books of account. The Respondents have not provided any books of account, list of debtors and their outstanding balances. 36. We find that the whole story has bee....