TaxTMI 
TaxTMI 
TaxTMI 
2022 (8) TMI 236
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....ate For the Respondents : Mr. Abhishek Naik (for R-1) and Ms. Gulafsha Kureshi, Advocates JUDGMENT ( Per Hon'ble Mr. Justice M. Satyanarayana Murthy ) Aggrieved by the order in I.A. No. 2844/2020 in CP (IB) 1359/ND/2019 dated 13.12.2021, this appeal is preferred by Mr. Rakesh Kumar Jain, Resolution Professional of HBN Homes Colonizers Ltd., the Adjudicating Authority decided the I.A. No. 2844/2020 filed under Section 66 of IBC in CP (IB) 1359/ND/2019 issues the following directions: "26. In sequential to above, we are, therefore, of the considered view that Respondent Nos. 2 to 21, the suspended board of directors of the corporate debtor and other related persons were carrying on business with intent to defraud the creditors of the corporate debtor or with fraudulent purpose and accordingly, they misappropriated Rs. 2687.27 lacs and diverted to their own use with intent to defraud the creditors. Therefore, they are liable to make such contribution to the assets of the corporate debtor. 27. Accordingly, we direct the Respondent Nos. 2 to 21 to make contribution of Rs. 2687.27 lacs (Two Thousand Six Hundred Eighty Lakhs and Twenty Seven Thousand) jointly or severely to the a....
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.... Adjudicating Authority committed a grave error in passing the impugned order since the Resolution professional of HBN Homes Colonizers Pvt. Ltd., he was appointed by the order dated 24.07.2019 by Adjudicating Authority in CP (IB)-82/2019, a moratorium was also imposed in accordance with Section 14 of IBC, therefore, no proceeding could be initiated against the Appellant/ HBN Homes Colonizers Pvt. Ltd. The Adjudicating Authority passed the impugned order without applying its mind and the appellant being represented by resolution professional, passing impugned order by Adjudicating Authority is ex-facie erroneous and against law. Hence, the order is unsustainable and requested to allow the appeal setting aside the impugned order. The respondent filed a detailed reply contending that the Corporate Debtor entered into fraudulent transactions which is against the interest of operational and financial creditors. The appellant did not choose to file the counter despite affording reasonable opportunity, thereby, the appellant is not competent to raise any plea in the absence of any pleading. It is specially contended that the appellant was represented by an advocate, on 19.08.2020, 21.08....
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....the order in I.A. No. 2844/2020 dated 13.12.2021 is sustainable?" The dispute is between resolution professional of the Corporate Debtor, the appellant herein and the operational creditor is represented by its resolution professional. The corporate debtor is undergoing process of insolvency resolution and it is alleged that during the process of insolvency resolution the appellant herein representing HBN Homes Colonizers Pvt. Ltd. entered into fraudulent transaction and the same is supported by audit report called for by the Adjudicating Authority. The legality of the report or otherwise is not challenged by the appellant in the present appeal, however, the appellant limited his submissions as to the legality of the order passed under Section 66 of the IBC during currency of moratorium under Section 14 of IBC, therefore, we find it appropriate to confine ourselves to the limited question as to the legality of the order passed by Adjudicating Authority during currency of moratorium. In view of the limited challenge it is apposite to extract Section 14 (1) (a) for proper appreciation and it is extracted hereunder: 14. Moratorium - (1) Subject to provisions of sub-sections (2) and....
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....sets 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 the 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 minimizing the potential loss to the creditors of the corporate debtor. (3) Notwithstanding anything contained in this section, no application shall be filed by a resolution professional under subsection (2), in respect of such default against which initiation of corporate insolvency resolution process is suspended as per section 10A." A bare reading of Section 66 of IBC it is clear that the Tribunal is competent to pass appropriate orders against suspended board of director or resolution professional and related parties, in terms of clause 2 of Section 66 of IBC, when fraudulent transaction was entered into by the corporate debtor through its resolution professional or suspended Directors. The core contention of the appellant is that the prohibition under Section 14 (1) (a) is applicable to Section 66 of....
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....Act and, "whenever it is possible to do so, to construe provisions which appear to conflict so that they harmonise" vide University of Allahabad Vs. Amritchand Tripathi AIR 1987 SC 57 Accordingly, the provisions of the Maharashtra Regional and Town Planning Act, 1966, were read together by the Supreme Court after noting the purpose of the Act. The Act was held not to envisage a situation of conflict, and therefore, the edges were required to be ironed out to read those provisions of the Act which were slightly incongruous, so that all of them are read in consonance with the object of the Act, which is to bring about orderly and planned development vide Manohar Joshi Vs. State of Maharashtra and Ors. (2012) 3 SCC 619, P.676 Applying the principles laid down by the Apex court in the above judgments it is the duty of this Tribunal to construe Section 14 (1) (a) and Section 66 of IBC harmoniously to make the enactment effective and workable. In the present facts of the case there is absolutely no inconsistency or repugnancy between Section 14 (1) (a) and Section 66 of IBC. Section 14 of IBC is a bar against institution and prosecution of any suits or proceedings or execution of order....