TaxTMI 
TaxTMI 
2023 (6) TMI 194
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Authority' ('National Company Law Tribunal', Division Bench - II, Chennai). 2. The 'Adjudicating Authority' ('National Company Law Tribunal', Division Bench - II, Chennai), while passing the 'impugned order' in IA (IBC) / 487 (CHE) / 2021 in IBA/1424/2019, at Paragraph Nos.36 to 38, had observed the following: 36. "From the averments and in the submissions made by the Applicant, it is seen that the Applicant has submitted that the agricultural lands at 9 locations belonging to the farmers were purchased with the funds of the Corporate Debtor during the month of February 2017 and March 2017 for a sum of Rs.1,97,97,187/-. It was submitted that the 3rd Respondent is a related party of the Corporate Debtor by virtue of having a common Directorship and is represented by the 4th to 6th Respondent Directors. However, on the contrary the Learned Counsel for the Respondent has submitted that the money for the lands that were purchased by the 3rd Respondent were given by RPPL to the Corporate Debtor which in turn provided that money to the 3rd Respondent which is one of the SPVs created by the Regen Group. It was submitted that the RPPL has funded the Corporate Debtor for the development....
X X X X Extracts X X X X
X X X X Extracts X X X X
....vide Pg No. 872 to 888, Vol VI of the Appeal Paper Book). 4. According to the Appellant, during the course of taking charge of the affairs of RISPL, she discovered that although as per the 'Audited Financial Statements', 'RISPL', had acquired 'Lands', in Morbi District, Gujarat, none of the documents relating to the same, were available in the Offices of 'RISPL'. Further, when queries were put to the Suspended Directors of 'RISPL' (the Respondent Nos. 1 and 2), they simply avoided the same, without furnishing any information or documents. 5. The Learned Counsel for the Appellant points out that the 'impugned order', is a 'perverse' one and further, in response to the 'Fraud', alleged against the Respondents, together with the overwhelming documentary evidence, substantiating the same, only, the Respondent Nos. 1 and 2, had filed a Counter, before the 'Adjudicating Authority' / 'Tribunal', and that the Respondent Nos. 3 to 8, had not filed any Counter, before the 'Adjudicating Authority'. 6. The Learned Counsel for the Appellant contends that although the Respondent Nos. 1 and 2, had filed their 'Counter Affidavit', before the 'Adjudicating Authority' / 'Tribunal', no documents w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....idence produced, which clearly points out that the lands in question, were purchased in the name of the 3rd Respondent, utilising the Funds of 'RISPL', which was not in the ordinary course of business, and provided 'no profit' or 'gain', to 'RISPL'. 11. The version of the Appellant is that, a mere perusal of the 'Memorandum of Association' of the '3rd Respondent / Company', would reveal that there are 'Two Subscribers', to the 'Memorandum of Association', which are not related, either to 'RPPL' or 'RISPL', and the 'Board Report', for the year 2018-2019, filed by the '3rd Respondent / Company', will show that there are 'Three Directors', in the '3rd Respondent / Company', who are also not related to 'RISPL' or 'RPPL', in any manner, whatsoever. 12. According to the Appellant, the 'RISPL' and the '3rd Respondent', do not form a 'Group Company', since the facts of the present case, do not satisfy the 'threshold', specified in 'Explanation (b) to Section 5 (b) of the Competition Act, 2002, which runs as under: "(b) group means two or more enterprises which, directly or indirectly, are in a position to- (i) exercise twenty-six per cent or more of the voting rights in the other ent....
X X X X Extracts X X X X
X X X X Extracts X X X X
.....) No. 356 of 2022. 16. While rounding up, the Learned Counsel for the Appellant prays for allowing the instant 'Appeal' or in the alternative, to remand the matter to the 'Adjudicating Authority' / 'Tribunal', for fresh consideration on 'merits', by considering all the materials placed on record. Appraisal : 17. Before the 'Adjudicating Authority' / 'Tribunal', the Appellant / Petitioner, had preferred IA(IBC)/487(CHE)/2021, in IBA / 1424 / 2019 (filed under Section 25 & 66 of the I & B Code, 2016, read with Rule 11 of the NCLT Rules, 2016), and sought the undermentioned reliefs, were prayed for: (i)To declare the following Sale of Immovable Properties for a total extent of 16.02 Acres in favour of the 3 Respondent M/s. Lakshmiranga Perumal Renewable Energy (P) Ltd., (LPREPL) as fraudulent, null and void and consequently, direct that the said Immovable Properties as detailed below are transferred and vested with the Corporate Debtor M/s. Regen Infrastructure and Services (P) Ltd., (a) Sale Deed Doc. No.174 / 2017 dated 30.03.2017 executed by Shri. Jayantilal Amarshibhai Kaila in respect of 1.65 Acres (00.66.77 Hectares) in Location PVKH61, S.No.92 / 1, Part 1, Khakharechi ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t IA /1040 / 2021, was filed under Section 19(2) of the I & B Code, 2016, in that Application, a direction was sought from the Respondents, to comply with the numerous requirements of the Appellant / Petitioner, including; "(i) RISPL Assets as on the Insolvency Commencement Date (19/02/2020) classified into appropriate categories for easy identification, with estimated values assigned to each category along with Copy of the Register of Fixed Assets (FA); (ii) Original Land Documents of RISPL and its Wholly Owned Subsidiaries with Index of Land Description including Leased Land, Survey No., Registered Document No., Name in which registered, Name / Address and Related Document of the Power of Attorney if the Land is not yet registered in Companies Name, Book Value, Details of Right to Way with documents; (iii) Lands in Inventory and Manual - Assets of RISPL and its Wholly Owned Subsidiaries - Original Documents." 19. On behalf of the Appellant / Resolution Professional, it is pointed out before this 'Tribunal' that the 'Balance Sheet' of the Corporate Debtor, as on 31.03.2019, reflects the details of Land Assets of the Corporate Debtor as (i) Land in Fixed Assets Category at R....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ivate Limited'. Moreover, the said illegal 'Asset Transfer', in 'Related Parties Name', was made with the knowledge of the Respondents. Later, through an email dated 08.01.2021, the Appellant / Applicant, brought to the fore in respect of a 'Letter of Authority', dated 10.10.2019, by the 7th Respondent in his capacity as the 'Authorised Signatory' of the '3rd Respondent'. 24. The contention of the Appellant is that, some of the Properties which were transferred by the 3rd Respondent to other Parties (third parties), at a higher price than at which, it was purchased, and that the later Sales, were brough to the notice of the 'Committee of Creditors', in its 6th Meeting dated 02.02.2021. 25. The Learned Counsel for the Appellant points out that the 1st Respondent through email dated 19.02.2021, had stated that a sum of Rs.9,12,49,999/- was received from M/s. Regen Powertech Private Limited ('RPPL'), the Holding Company of the Corporate Debtor, to pay the Farmers, in regard to the purchase of land and the lands so purchased are held by one of the Special Purpose Vehicle ('SPV') of 'RPPL', but no evidence / proof, was produced by the 1st Respondent, for such transfers. 26. The other....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 11:10:56 itself comes to an end, an application for avoidance of transactions cannot be adjudicated. The purpose of avoidance of transactions is clearly for the benefit of the creditors of the Corporate Debtor. No benefit would come to the creditors after the Plan is approved. Thus, Form H cannot come to the aid of avoidance applications to remain pending beyond the CIRP process." 29. The submission of the Learned Counsel for the Appellant is that, the 'Resolution Professional', has a duty, under the I & B Code, 2016, to make an opinion instead of 'Corroborating a Transaction', to push it under Section 66 of the Code. In this connection, the Learned Counsel for the Appellant falls back upon the Judgment dated 04.05.2022 in Comp. App (AT) (INS.) No. 454 of 2022, between Mr. Nitin Bharal (Ex-Director / Promoter, New Delhi) and 3 Ors., v. Stockflow Express Private Limited, through Liquidator Mr. Sanjay Gupta, New Delhi, wherein at Paragraphs 22 and 23, it is observed as under: 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 f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....forts without the assistance or aid of the 1st and 2nd Respondents, and (d) the Extract of Transaction Audit Report submitted in IA(IBC)/591(CHE)/2021 in IBA/1424/2019, to establish the 'Fraudulent' basis of the whole transaction and the basis of such an opinion, before the 'Adjudicating Authority', and the Adjudicating Authority, had committed an 'error', in arriving at a conclusion that the 'Appellant' / 'Applicant', was making sweeping allegations. 31. The pith and substance of the Appellant's contention is that, the 'Lands', in question are capable to 'generate Wind Energy', a 'vital crucial element', in sustaining the 'Corporate Debtor's Operations', as a 'Going Concern', and the very fact, that these 'Assets', are sold at a 'Higher Amount' than at which, the same was purchased, indicate, that the Respondent Nos. 1 and 2, were carrying on the 'Corporate Debtor's business', with the main intent of 'defrauding', its 'Creditors', with the 'Respondent Nos. 3 to 8', colluding and being a 'Beneficiary' of the same. 32. Before the 'Adjudicating Authority', the Respondent Nos. 1 and 2, took a stand that they had not gained personally anything, from any transaction, with the '1st Res....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e, 2016, operate in a different arena. 39. At this stage, this 'Tribunal', aptly points out the decision of the Hon'ble High Court of Kerala, in South India Paper Mills Pvt. Ltd. v. Sree Rama Vilasam Publications (P) Ltd., reported in (1982) 52 Comp. Cas. 145 Ker., wherein, at Paragraph 10, it is observed as follows: 10. "This is a far cry from the "false representations" or the "false pretence" alleged in the affidavit, and I have not been referred to any authority to hold that the carrying on of business after the presentation of a winding-up petition, without disclosing the pendency of the proceedings, should by itself be presumed to be fraudulent. Mr. Vyasan Potti argued that where such presentation is actually followed by a winding-up order, even if it be nearly four years later as in this case, the effect of it is to hold that the company was unable to pay its debts at the time the petition was presented, and that the directors should be presumed to know even at that time that there was no reasonable prospect of repayment. A proposition so wide has not received judicial recognition so far. A company may actually be insolvent at a given time; but its directors may bona fide....