TaxTMI 
TaxTMI 
TaxTMI 
2022 (12) TMI 1594
X X X X Extracts X X X X
X X X X Extracts X X X X
....vocate for R-7. JUDGEMENT (Virtual Mode) [Per; Shreesha Merla, Member (T)] 1. Aggrieved by the Impugned Order dated 09.07.2021 passed by the Learned Adjudicating Authority (National Company Law Tribunal, Kochi Bench, Kerala) in IA No.38/KOB/2021 in IBA/04/KOB/2020, the present Appeal has been preferred under Section 61 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as 'The Code'). 2. Facts in brief are that I.A. 38/KOB/2021 was filed by Mr. K. Easwara Pillai/the Resolution Professional ('RP') against the Appellants herein/the suspended Directors of the 'Corporate Debtor' seeking the following reliefs: "II. To pass an order directing the Respondents to make good the losses caused to the creditors....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ere were no workers and employers working under the pay role of the 'Corporate Debtor'. 4. Though Notice was served on Respondents 3 to 6, who are the Appellant Nos. 3 to 6 herein, they did not appear before the Adjudicating Authority and hence were set as Ex-Parte. The first Appellant did not file any Reply and the second Appellant remained absent. M/s. Malayalam Industries Limited who is the 50% Shareholder of the 'Corporate Debtor' filed a Reply and stated that they did not have any dealings in any of the transactions mentioned in the Affidavit filed by the RP. 5. By the Impugned Order, the Adjudicating Authority has allowed the Application filed by the RP under Section 66 of the Code and observed as follows: "From a readi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....thout discussing evidence and only based on the assessment of facts pleaded in the Application that the transactions were 'fraudulent' as defined under Section 66 of the Code. The limitation for actions under the Code is three years and therefore Section 66 of the Code is also covered by the provisions of the Limitation Act, 1963 which constricts the period of 'look back' to three years. In this instant case, the third Respondent had taken over all rights for a period of five years and therefore, it is 'barred by Limitation'. 7. It is submitted that the Application filed by the RP does not demonstrate any act or fraud by the Appellants nor does it set out any facts to show any elements of fraud. It is laid down by the Hon'ble Supreme Cou....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as equitable mortgage for the loan availed by the 'Corporate Debtor' from Union Bank of India. It is the case of the RP that the said facts came to his notice on verification of the Claim filed by Union Bank of India by way of 'Form-C' dated 07.12.2020. The land on which the manufacturing unit of the 'Corporate Debtor' is located, has been handed over along with its Plant and Machinery to the third Respondent. It is the case of the RP that all the current Assets such as stock, raw materials, finished goods, trade debtors, Motorcars, Trade Advance were wilfully treated to m/s. Whispower Sales & Services Limited. 9. It is not in dispute that the Audited Annual Accounts with RoC was in default from 2015-2016 onwards. The RP, based on the st....
X X X X Extracts X X X X
X X X X Extracts X X X X
....stopped during 2013-14. 11. We observe from the Impugned Order that the Adjudicating Authority has passed an Order on merits and also having heard the first and the seventh Respondent. It is the matter of record that though the first Respondent was represented by an Advocate they did not choose to file a Reply. We also observe from the grounds of Appeal that M/s. Whispower Sales & Services Pvt. Limited is 100% owned by the Directors and Shareholders of the 'Corporate Debtor'. There is not a single whisper of denial regarding the statement by the RP. 12. As regarding the contention of the Learned Counsel for the Appellant that the look back period for Section 66 is to be construed as three years as the law of Limitation under the Code ....