TaxTMI 
TaxTMI 
2026 (2) TMI 1220
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.... The present appeal has been preferred under Section 61 of the Insolvency and Bankruptcy Code, 2016, assailing the order dated 14.11.2024, as subsequently modified by order dated 20.12.2024, passed by the Ld. National Company Law Tribunal, Delhi Bench-III, (Adjudicating Authority) in I.A. No. 3827 of 2022 filed in C.P. (IB) No. 495 (ND) 2017. By the impugned orders, the Ld. Adjudicating Authority directed the Appellants, namely M/s SSMP Agro Export Private Limited/Appellant No.1, Mr. Sagar Kunwar/Appellant No.2 and Mr. Shrey Kunwar/Appellant No.3, to deposit a sum of Rs. 1.00 crore along with interest @15% per annum into the liquidation estate of the Corporate Debtor through Mr. Yogesh Sethi/Respondent No.1 and Liquidator of M/s SSMP Industries Ltd. (Corporate Debtor). The said direction was based on the finding that an alleged agreement to sell dated 13.12.2019 for a property of Corporate Debtor (CD) was genuine and that the amount of Rs. 1.00 crore received by the appellant no. 1, constituted part of the sale consideration of land belonging to the Corporate Debtor. 2. The appellants have raised serious disputes regarding the authenticity of the document; absence of any adjud....
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....t submitted that the Respondents No.6 and 7, namely Sri A. Ravindra Naidu and Sri V. Kamalapathi Naidu, approached Appellant Nos.2 and 3, Mr. Sagar Kunwar and Mr. Shrey Kunwar, with a proposal to establish a new agro-export start-up, promising total funding of Rs. 6.00 crore, facilitation of government grants, and eventual merger of M/s DBA Enterprises LLP with Appellant No.1, M/s SSMP Agro Export Private Limited. vii. M/s SSMP Agro Export Private Limited, passed a Board Resolution authorising capital infusion on 12.08.2019. Pursuant thereto, an amount of Rs. 1.00 crore was received by the Appellant No. 1 by RTGS in two tranches of Rs. 50 lakh each from Respondents No.6 and 7, Sri A. Ravindra Naidu and Sri V. Kamalapathi Naidu, on 13.12.2019 to commence operations. viii. The appellant stated that the said amount of Rs. 1.00 crore was consistently reflected in the statutory books, audited balance sheets, and ROC filings of the Appellant No.1, M/s SSMP Agro Export Private Limited, as an unsecured loan from the financial year 2019-20 onwards, without any reference to a sale transaction or linkage with the Corporate Debtor M/s SSMP Industries Ltd. ix. No furt....
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.... Final arguments in I.A. No. 3827 of 2022, were heard on 05.01.2024, with liberty granted to file written submissions, though due to procedural lapses by the appellants counsel, the written submissions of the Appellants, namely M/s SSMP Agro Export Private Limited, Mr. Sagar Kunwar and Mr. Shrey Kunwar, were not taken on record. xvii. By the impugned order dated 14.11.2024, the Learned NCLT declared the Agreement to Sell void, restrained Respondents Nos. 8 and 9 from enforcement, and directed the Appellants and Respondents Nos. 1-3 to deposit Rs. 1 crore with interest @ 15% per annum, followed by a clerical modification dated 20.12.2024. Submissions of the appellant 4. Submissions of the appellant are as below: i. Ld. Counsel for the Appellants respectfully submits that the present appeal has been filed challenging the impugned orders dated 14.11.2024 and 20.12.2024 passed by the Learned National Company Law Tribunal, Delhi Bench-III, in IA-3827/2022 in CP (IB) No. 495(ND)/2017, whereby the Learned Adjudicating Authority directed the Appellants to deposit an amount of Rs. 1 crore along with interest at the rate of 15% per annum into the liquidation estate of....
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....as unsecured debt since 2019, and no material links it to the Corporate Debtor. iv. Ld. Counsel submits that allegations of forgery involve complex questions of fact requiring trial and expert evidence, falling within the jurisdiction of civil courts. The Learned NCLT exceeded its summary jurisdiction by adjudicating upon alleged forgery and agreement validity. Further, fraudulent transaction under Section 66 requires proof of intent, which has not been established. v. Ld. Counsel submits that by directing deposit of Rs. 1 crore into the liquidation estate, the Learned NCLT has extinguished the Appellants' legitimate claims for damages, interest, and business loss against Respondents Nos. 8 and 9 (Respondents Nos. 6 and 7 in this appeal). Notably, Respondents Nos. 8 and 9 have never issued any demand notice or instituted any proceedings for refund. The impugned order grants them an unjust windfall and allows them to benefit from their own wrong. vi. Ld. Counsel submits that the imposition of 15% interest is unsupported by any contract, statute, or regulation. The Insolvency and Bankruptcy Code does not permit speculative interest on third-party transactio....
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.... that during the CIRP, the Resolution Professional caused a special audit, the report of which was submitted on 18.03.2019. The said audit unearthed serious financial irregularities, including the submission of two separate balance sheets for the same financial year 2015-2016, one reflecting a profit of Rs. 15,41,157/- and the other reflecting a loss of Rs. 3,00,33,676/-. The audit further revealed that assets worth Rs. 2.39 Crores were sold by Mr. Manoj Kunwar, both prior to and subsequent to the commencement of CIRP, and that destruction of stock worth Rs. 8.5 Crores was falsely declared. v. These facts clearly demonstrate systematic manipulation of accounts and diversion of assets with the intent to defraud creditors, laying the foundation for the subsequent proceedings under Section 66 of the Code. vi. Ld. Counsel for the Respondent submits that owing to the failure of CIRP, the Learned Adjudicating Authority passed an order dated 31.07.2019 directing liquidation of the Corporate Debtor. The liquidation estate included, inter alia, an immovable property bearing Survey No. 242/1242/2242/3 situated at Gundlakattamanchi, Bangarupalem Mandal, Chittoor District, An....
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....unwar filed a reply to I.A. No. 3827 of 2022 contending that the claim of the Liquidator was baseless and alleging that the purchaser had entered into a fraudulent transaction to recover Rs. 1 Crore. Significantly, while raising such contentions, Mr. Manoj Kunwar did not deny the execution of the Agreement to Sell. xii. It is further submitted that Appellant Nos. 2 and 3 did not file any reply to the application, but filed written submissions before the Learned Adjudicating Authority, contending that they were not signatories to the Agreement to Sell, that the principle of limited liability and separate legal personality of a company protected them, and that receipt of Rs. 1 Crore under the Agreement to Sell was denied. These defences were examined and rejected by the Learned Adjudicating Authority after appreciating the factual record. xiii. Ld. Counsel for the Respondent submits that the Appellants have raised entirely new and contradictory pleas before this Hon'ble Appellate Tribunal by way of an additional affidavit dated 12.03.2025. It has now been claimed that the amount of Rs. 1 Crore was received as initial funding and shown as an unsecured loan in the boo....
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.... Moons Technologies Ltd. & Ors.', reported as 2025 SCC OnLine SC 690, particularly paragraph 50, which affirms the powers of the Adjudicating Authority in dealing with avoidance and fraudulent transactions. xx. Reliance is also placed on the judgment of this Hon'ble Appellate Tribunal in 'SMBC Aviation Capital Ltd. & Ors. v. Interim Resolution Professional of Go Airlines (India) Ltd. & Anr.', reported as (2023 SCC OnLine NCLAT 230), paragraph 32, which reiterates that transactions undertaken without authority during insolvency proceedings are liable to be set aside and appropriate restitution ordered. Submission of Respondent No. 2: Suspended Director of the Corporate Debtor- Mr. Manoj Kunwar 6. Submissions of Respondent No.2 are as below: i. Ld. Counsel for Respondent No.2 in his opening remarks submits that by way of the Impugned Orders, the Learned NCLT has travelled far beyond the scope of its jurisdiction inasmuch as it has, firstly, adjudicated serious allegations of forgery and fabrication in a summary proceeding under the Insolvency and Bankruptcy Code, 2016, and secondly, granted reliefs which were never prayed for in the underlying application. It ....
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.... bare comparison with the admitted signatures of the Answering Respondent on official and contemporaneous documents. vii. Ld. Counsel submits that the Answering Respondent became aware of the existence of the forged Agreement only upon receipt of a legal notice dated 09.06.2022, wherein Respondent Nos. 6 and 7 demanded execution of a Sale Deed on the basis of the said fabricated document. The Answering Respondent immediately and unequivocally denied the allegations and issued a detailed reply dated 06.07.2022, categorically refuting the execution of any such Agreement and cautioning Respondent Nos. 6 and 7 against relying upon the same. viii. Ld. Counsel further submits that despite the explicit denial, Respondent No. 1, acting in his capacity as Liquidator, maliciously relied upon the forged Agreement and filed the same before the Learned NCLT in I.A. No. 3827 of 2022, seeking recovery of Rs. 1,00,00,000/- from the Appellants and the suspended directors, including the Answering Respondent. It is submitted that Respondent No. 1 was fully aware that the said amount was never received by the Answering Respondent and pertained solely to an independent transaction inv....
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....nt Nos. 6 and 7 for the remaining consideration of Rs. 5,00,00,000/-, a relief wholly dehors the pleadings. xvi. Ld. Counsel submits that such grant of relief, in the absence of a specific prayer, is impermissible in law and vitiates the entire order. xvii. Ld. Counsel places reliance on the judgments of the Hon'ble Supreme Court in 'Desh Raj & Ors. v. Rohtash Singh' [(2023) 3 SCC 714] and 'Akella Lalitha v. Konda Hanumantha Rao & Anr.' [2023 SCC OnLine SC 928], wherein it has been unequivocally held that courts cannot grant reliefs beyond the pleadings. xviii. Ld. Counsel submits that owing to the mala fide and malicious conduct of Respondent No. 1, the Answering Respondent was compelled to file I.A. No. 5634 of 2021 seeking replacement of the Liquidator, which remains pending adjudication before the Learned NCLT. xix. Ld. Counsel further submits that the objections raised by Respondent No. 1 in the present Appeal are misleading and suppress the material fact that all such objections are already sub judice before the Learned NCLT, including challenges to the Special Audit Report and applications seeking impleadment of the Special Auditor. ....
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.... 25.38% 3) Smt. Brij Kishori Devi (Mother of Manoj Kunwar. 1,60,000 8.60% We can see from the above that out of total 18,39,150 shares of the CD, 18,38,550 shares (99.97%) were held by the family of Sh. Manoj Kunwar/ Respondent No.2. The CD in effect is a family concern of the Respondent No.2. 13. Mr. Sagar Kunwar and Mr. Shrey Kunwar, the sons of Mr. Manoj Kunwar, are the directors and shareholders of M/s SSMP Agro Export Private Limited, which is Appellant No. 1 in the present appeal. This company was incorporated after commencement of CIRP of the Corporate Debtor and during the pendency of insolvency proceedings. M/s SSMP Agro Export Private Limited carries on business similar to that of the Corporate Debtor, namely agro-export and fruit pulp related activities. The shareholding and control of this company vest entirely with Mr. Sagar Kunwar and Mr. Shrey Kunwar. 14. Another relevant entity is M/s DBA Enterprises LLP, which was a family-controlled business associated with the Kunwar family and engaged in similar agro-based activities. The operational business of M/s DBA Enterprises LLP was subsequently transferred within the family fold, thereby ensuring co....
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....ell is a vital document giving factual details about the transaction. We now examine the relevant portions of agreement to sell dated 13.12.2019, which is extracted below: 21. The following points are noted from the sale agreement: (i) The sale agreement is for Rs. 6,59,52,000/- and was executed on 13.12.2019 at Bangarupalaym Mandal, Chitoor Distt. A.P. (ii) M/s SSMP Industries (Corporate Debtor), represented by its Managing Director/ Authorised signatory Mr. Manoj Kunwar (Respondent No.2) is the vendor. The vendor is the absolute owner of the scheduled property. (iii) Sh. Manoj Kunwar, Managing Director of the vendor company has been authorised by the Directors of the vendor company as per resolution dated 25.11.2019 to sign and to deal on behalf of the vendor company (iv) Sh. A. Ravindra Naidu (Respondent No.6) and Sh. V. Kamalapathi Naidu (Respondent No.7) are the vendees. (v) In pursuance of the above agreement the Vendees herein have paid 1,00,00,000/- (Rupees one crore only) from their bank accounts through RTGS in to the bank Account of Vendor Account bearing No. 03361100051790 in the following manner: (a) Rs. 50,00,00....
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....or fraud was lodged since 2019 till 12.12.2023. This is significant because, according to the Appellants, the Agreement was forged from the very beginning. If that were so, a reasonable and expected course of conduct would have been to immediately approach the police or a competent court upon discovering the alleged forgery. 29. From a reading of the police complaint dated 12.12.2023 (Annexure- F), it is clear that the grievance raised therein relates to alleged coercion, intimidation, and forcible extraction of cheque and cash amounts by the accused persons. The complaint refers to offences under Sections 384/386/34 IPC and narrates allegations of threats, forced signatures on a cheque of Rs. 20,00,000, seizure of mobile phones, and removal of cash. Importantly, there is no specific allegation in the complaint that the Agreement to Sell dated 13.12.2019 was forged or fabricated, nor is there any averment stating that the Agreement itself is fraudulent. The complaint does not even refer to the Agreement to Sell as being void, manipulated, or forged. The entire narration is confined to alleged coercive acts on 12.12.2023 and the demand for money. Thus, the police complaint does n....
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.... to note here that the appellants have now claimed that the amount of Rs. 1 Crore was received as initial funding and shown as an unsecured loan in the books of account. However, if this was the case, they should have taken this plea before the Adjudicating Authority in the first place. The records on the contrary shows that no such plea was taken by the appellant in their submissions/ reply before the Adjudicating Authority. This plea has been taken for the first time before us. The relevant portion of their submission in Reply to IA No. 3827 has been extracted below: "3. The said Application has been filed by the Liquidator solely on the basis of the information provided by the Respondent No. 8 to 9 that Rs. 1 Crores were paid to SSMP Agro Export Private Limited (Respondent No. 5) as part-consideration under the Agreement to Sell. The entire basis of the present Application qua the Answering Respondents is statement of the Respondent No. 8 to 9. Surprisingly, Respondent No. 8 to 9 have never entered appearance in the present Application, perhaps they may not have been served with the notice or wilfully choosing to remain absent. 5. Further, the present Applicati....
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....t the amount was merely an unsecured loan appears to have been developed subsequently in this Appellate Forum. 37. It is true that learned counsel for the Appellants has submitted that the amount of Rs. 1 crore is reflected in their balance sheet as an unsecured loan. However, a mere accounting entry cannot by itself determine the true nature of a transaction. No loan agreement with the creditor, no board resolution, no repayment schedule, no interest clause, and no correspondence have been placed on record to show that the amount was advanced as a genuine unsecured loan. In the absence of supporting documentation, a subsequent book entry cannot override the surrounding facts, which consistently connect the payment with the Agreement to Sell dated 13.12.2019 relating to the Corporate Debtor's land. Therefore, the plea that the amount was merely an unsecured loan appears to have been developed subsequently in this Appellate Forum. 38. In view of the above factual sequence and surrounding circumstances, we note that the transaction under question is related party transaction, as CD is a family business of Father, Mother and grandmother of the appellant No. 2 and 3, who are the ....
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....orative in nature, aimed at protecting the liquidation estate, and is not in the teeth of the ratio laid down in Balwant Rai Saluja (supra). 40. We will now examine the judgments cited by the Respondent in the context of the present factual matrix: i. In Satori Global Limited & Anr. v. Shailja Krishna & Ors., 2023 SCC OnLine NCLAT 249, this Tribunal held that serious allegations of forgery or fraud cannot be finally decided in summary insolvency proceedings and must be examined by a competent civil court after full evidence. Similarly, in Shelendra Kumar Sharma v. DSC Limited, 2019 SCC OnLine NCLAT 1274, it was held that complex disputes involving fraud should not be conclusively determined in IBC proceedings. These judgments support the Respondents in the present case. The Adjudicating Authority has not decided whether the Agreement to Sell is forged or genuine. It has not given any finding on criminal liability. Instead, it has simply directed that money received in connection on unlawful sale of property included in the liquidation estate during the moratorium period must be restored. Therefore, the NCLT has acted exactly in line with the above judgments by not enter....
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....ctor/Authorized signatory Mr. Manoj Kunwar. S/o Dharmanath Kunwar, aged about 48 years, residing at Door No. 416A, 3"" Floor, Gali No.2. Ganesh Nagar-II, Shakarpur Delhi-92, hereinafter called the "VENDOR' which expression shall wean and includes his heirs, Ingal representatives lind assigns of the ONE PART . To and in favour of 1 1) Srl. A.Ravindra Naidu S/o A.Venkatadri Naldu, aged about 52 years, residing at No.71. 16" Main, EWS BTM Il atage, Banglore -76 and 2) V.Kamalapathi Naidu, S/o late Chinnaswami Naidu, aged about 56 years, residing at Thinunojl palle, Bangarupalyam Mandal. Chittoor district hereinatter called the "VENDEES" which expression shall men and Include thele heirs, legal representnuves and assigns are the OTHER PART. 1) A. Raide malus 2) V SoactivesEnse (Vendas ) Document 3 24 1 à¤à¤¾à¤°à¤¤à¥€à¤¯ गैर नà¥à¤¯à¤¾à¤¯à¤¿à¤• पचास रà¥à¤ªà¤¯à¥‡ FIFTY RUPEES Rs.50 55.50 INDIA NON JUDICIAL Sá» ANDHRA PRADESH 3.No. 2608 888/2/02/09/200/- AL 199239 T."BALAJI LICENCED STAMP VENDOR L.No. 10-11-002/2015 R. No 10-11-014/2018 CHENN....
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....ance sale (vendors) ( vendees ) 1 Document 5 28 à¤à¤¾à¤°à¤¤à¥€à¤¯ गैर नà¥à¤¯à¤¾à¤¯à¤¿à¤• पचास रà¥à¤ªà¤¯à¥‡ FIFTY RUPEES Rs.50 रà¥.50 INDIA INDIA NON JUDICIAL Äá»” Äối apa xègi ANDHRA PRADESH AL 199243 T. BALAJI LICENCED STAMP VENDOR L.No-10-11-002/2015 R. No 10-11-014/2018 CHENNAMMAGUDIPALLI OR.CELL :9959069812 Sold To A. Raviminareusb Avvenkatachimiche For whom ... 1 Both parties agreed that if any dispute arises relating to this agreement, IF6116615 6656 1 through arbitration only. The vendor agreed to execute regular sale deed in the name of the vendee and or his [ nominees without any sort of objection after getting entire sale consideration. 1 in witness where on the Vendor hereby execute this deed of agreement of sale with his free [ will and consent. SCHEDULE PROPERTY All the piece and parcel of Non-agriculture land situate In Sy No. 242-2 (before conversion [ of the agriculture land into non-agriculture land, the land situated In S.Nos. 242-1, 242-2 & 242-3) af Gundlakattamanchi Rav....