TaxTMI 
TaxTMI 
2026 (9) TMI 830
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....ons 35, 36, 66, 68 to 72 of the Code, being IA No. 1568 of 2020 in CP(IB) No. 1267 of 2017, whereby the application filed by the liquidator has been partly allowed and the appellants have been directed to contribute, jointly or severally, an amount of Rs. 437.02 lakhs to the corporate debtor. 2. Brief facts necessary for the disposal of this appeal are that Respondent No. 2, who is the corporate debtor, was subjected to CIRP vide order passed by the Ld. Adjudicating Authority on the petition filed by the Punjab National Bank under Section 7 of the Code. Respondent No. 1, namely Mr. Manish Baldeva, was appointed as the Interim Resolution Professional (IRP) who was later on confirmed as the resolution professional (RP) and subsequently as the liquidator of the CD vide order dated 20/07/2018. 3. It is also reflected that the liquidator, in exercise of powers provided under Section 35 of the Code, took into his custody and control various assets and properties of the corporate debtor and thereafter took a decision to investigate the financial affairs of the corporate debtor under Section 35(1) of the Code and by letter dated 25th July 2019, the liquidator appointed ADB and Associ....
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....ties of Gopal Complex and Megh Complex received till date by either the Respondent Nos. 1-3 or by Respondents 5-8 to the Liquidator along with interest @ 18% p.a. and the tenants be directed to pay all arrears, if any and current rent to the liquidator. f. That this Hon'ble Tribunal may be pleased to direct the Respondent Nos. 1-3 and/or Respondent Nos. 5-8 to hand over vacant and peaceful possession of the said immovable properties i.e. Gopal complex and Megh/complex the details which are set out in Exhibit coin) to the Liquidator. g. That this Hon'ble Tribunal may be pleased to allow auction of the said properties Gopal Complex and Megh Complex of the Corporate Debtor as per the rules and direct the ex-directors / promoters of the Corporate Debtor and the sellers of the said property and all others concerned including the tenants of not to create any obstructions in respect thereof and submit all the original documents as required by Liquidator. h. That in the alternative the purported Sale in respect of the properties set out in Exhibit F be declared fraudulent and void accordingly be cancelled and the Respondent Nos. 5-8 i.e. the said Vendors ....
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....ri Bank as a housing loan to the corporate debtor. Despite the purchase of this property by the CD in 2013, the forensic auditor found possession of the vendors i.e. Mr. Sudhir Hiranwar and others. 8. It is further stated in the application that the forensic auditor's report further states that, in respect of Gopal Complex property, there are tenants in the six second-floor flats, and all of the six flats at the third floor are still not constructed. The building was found inhabitable, as more particularly set out in the site report. Out of these tenants, one of the tenants, without disclosing her name, mentioned that she was a tenant of the vendor, Mr. Sudhir Hiranwar. It is also mentioned that, since the possession of the property is still with the vendors, no rent paid or deposited has been shown to the bank or to the corporate debtor. 9. It is further stated in the application that the State Bank of Nagpur, Nagarik Sahkari Bank, Dharampeth branch, had sanctioned a loan of Rs. 2,45,00,000 for the said property, which was valued at Rs. 3,50,00,000. The sale deed was registered on 30 March 2013. The stamp duty of Rs. 19,25,000 was paid on the purchase price of Rs. 3,50,00,00....
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....2013. 14. With regard to this property also, in the record of the sub-registrar, the ownership was found to be of the vendors, and the said godowns were found occupied by tenants. The tenants informed that they consider Mr. Sudhir Hiranwar (vendor) as the owner and are paying rent to him. The first and second floors facing the main road were found occupied by tenants, including insurance companies, namely Tata AIG/Reliance, etc. and the respondents were collecting the rent of these properties. 15. In the case of these godowns also, the market value of the property for stamp duty is shown as 122.33 lakhs and the entire plot was found mortgaged to the Nagrik Sahkari Bank. Despite there being a charge of the bank, the same was not redeemed or cleared, and the bank sanctioned and disbursed the loan on the property. With regard to the flats situated on the first and second floors of Megh complex, the property was valued at Rs. 161.56 lakhs, whereas the market value of the said flats was only Rs. 85.77 lakhs. 16. It is also stated in the report that the amount of loan of Rs. 168 lakhs and Rs. 112 lakhs were transferred to the vendor's account on 10 June 2013. On the same day, wh....
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....are genuine. These Transactions have been entered in the books of accounts of the Corporate Debtor under Five expense head and these expenses have been debited by Lump sum amount which in itself indicates that these expenses are not genuine. A screen short of debit to the one of the Accounts as found on the Transaction Report is reproduced below: 4.2.1. The manner in which transactions have been entered into the books of accounts of the Corporate Debtor in summary manner clearly indicates that these are fictitious expenses recorded by Respondents 1 to 3 to take out cash from the books of the Corporate Debtor. Since, these transactions are in the nature of carrying of the business of the Corporate Debtor for the Fraudulent purpose and falls u/s 66, we are satisfied that an appropriate order is required to be passed by us directing Respondent Nos. 1 to 3 to contribute these amounts within 30 days to the Corporate Debtor. 4.3. The Applicant has also prayed for the vacant and peaceful possession of the properties as well as agreements with tenants. The Applicant has also sought the recovery of rent received by the Respondents 5 to 8 from these tenants. Since these pro....
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....as paid directly by the bank to Respondent Nos. 3 to 6. So there exist no opportunity or occasion for the Appellants to have siphoned off the money? 24. It is further submitted that the quantum of the purchase price has been erroneously alleged to be overvalued in the forensic audit report. The basis of the same has been taken from the government ready reckoner, which does not take into account the prevailing market prices at that time. The prices taken by the forensic auditor are, per se, not based on any evidence or material. 25. It is further submitted that Respondent No. 7 bank, at the time of giving housing loan, has also recorded the valuations of these properties and has verified the valuations at which the properties are being purchased. The said value has been made the basis of financing by the bank. Therefore, the allegations levelled against the appellants are not true and substantiated by any material or evidence and despite many opportunities given to the Respondent bank, no evidence of any type was produced in contradiction of the contention of the appellants. 26. It is further submitted that non-mutation in records has been taken by Ld. Adjudicating Authorit....
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.... said order. It is also submitted that only 70% of the sale value was disbursed by the bank, therefore, there may not be any question of siphoning of any money or of overvaluation. 31. It is further submitted that the cash vouchers submitted by the appellants were not taken into consideration by the Ld. Adjudicating Authority without assigning any reason, while it was evident on record that the Appellant was working in remote areas of Jharkhand and Bihar. These areas were also affected by Naxalites, and therefore the payment through bank was not possible in these remote areas. Thus, the applicant was bound to make the cash payments, and this aspect of the matter should have been considered by the Ld. Adjudicating Authority. 32. Lastly, it is submitted that the Punjab National Bank has filed an application under Section 95 of the Code before the Learned Adjudicating Authority to declare that Appellant No. 1, Appellant No. 2, and other members of the family are insolvents on 8th August 2023. Thereafter, a letter dated 22nd September 2023 was issued by the Punjab National Bank stating that interim moratorium is in effect from the date of filing of the application and when no ami....
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....3 to 6, by cash from the CD, and no proof of the payment of the same is available. - Rs. 245 lakhs were paid to the Respondents 3 to 6 by way of a cheque bearing number 663411, drawn on Nagpur Nagrik Sahkari Bank. This amount was received by the CD and was paid by availing a loan facility from the aforesaid bank. 36. However, the record obtained from the office of the Sub-Registrar reflects the names of the original vendors (i.e., Respondents Nos. 3 to 6) as on 26th August 2019, and it shows that no efforts were taken by the CD to mutate its name. 37. It is also submitted that in flat numbers 201 to 206, tenants were in possession, and they recognized Respondent No. 3 as their landlord. The market value of all 12 flats was of Rs. 1,50,23,000, while the loan of Rs. 2,45,00,000 was taken from the Sahkari Bank and thereafter, respondent No. 3, Mr. Sudhir Hirinvar, transferred an amount of Rs. 99 lakhs by way of pay orders, each dated 30 March 2013 of Rs. 9 lakhs, and also a Demand Draft of Rs. 1 lakh in Favour of Linkson Ispat and Energy Private Limited, which is a related party to the CD and also having Appellant, Yash Vanth Sangla, as common director. Respondent No. 3....
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....so submitted that the Appellants have also committed various other financial irregularities. Despite continuous letters sent by the liquidator, they did not furnish any document, including leave and license agreements, with regard to the appellants and Respondent Nos. 2 to 8 and also that the third party is in possession of the properties. 43. It is vehemently submitted that, in utter disregard to the financial norms, the cash expenses to the tune of Rs. 103.15 lakhs were incurred while there was no supporting document provided by the corporate debtor and also that there was nothing on record which may suggest that these expenses are genuine. All these transactions have been entered in the books of account of the CD under the five head, and these expenses have been debited by a lump sum amount, which itself indicates that these expenses are not genuine and reliable and the way these expenses have been shown in the record in the ledger account of the CD would itself make it conspicuous that these cash transactions are not valid. Thus, having regard to all the facts and circumstances of this case, it is reflected that it is a case of round-tripping of money, and the fraud committe....
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....ade as on 30 March 2013, Which was registered on the same day, and the stamp duty value of the property was only about Rs. 1,50,00,000/-. 47. It is also observed that the six flats on the third floor, from flat number 301 to 306, are yet to be constructed, whereas in the sale agreement, no such observation has been mentioned. It is stated that the flat numbers 301 to 306 are being sold while they were not even constructed at that point of time. The amount of the loan was transferred to Shri Sudhir Hiranwar in their account at Nagpur Nagrik Sahkari Bank branch on 30 March 2013 and as per the bank statement of Sudhir Hiranwar he transferred by 11 pay orders of Rs. 9 lakhs each, total amount of Rs. 99 lakhs, and one draft of Rs. 1 lakh = Rs. 1 Crore, in favour of Linkson Ispat and Energy Private Limited by depositing in Punjab National Bank. 48. Further, Mr. Sudhir Hiranwar transferred Rs. 14 lakhs on 30 March 2013 through a cheque and Rs. 90,000 on 2 April 2013 to his savings account in the same branch. Thereafter, he issued two checks from this account: - Rs. 10 lakhs was transferred to Linkson Coal and Mining Limited through RTGS (cheque dated 2 April 2013) ....
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....o the vendor, Mr. Sudhir Hiranwar. The liquidator then asked the appellants, by writing various letters, to pay the rents received by them and also to submit copies of the leave and license agreements. However, no document was supplied, nor was the money paid. 56. With regard to the go-downs, the market value of the property, as set out for the purpose of stamp duty, was Rs. 122.33 lakhs. The entire plot number 3, on which the building was constructed, was mortgaged to Nagrik Sahkari Bank, and the said mortgage was never redeemed or cleared. Even then, the loan was sanctioned by the bank. 57. So far as the three flats constructed on each of the first and second floors of the Megh complex building, this property was valued at Rs. 161.56 lakhs, whereas the value for stamp duty of the same was only Rs. 85.77 lakhs. 58. It is also stated in the report that amount of loan of Rs. 168 lakhs and 112 lakhs were also transferred to the vendor's account in Nagpur Nagrik sahkari Bank Wadi branch on 10 June 2013, on which the sale deeds were executed and registered. The said vendor transferred: - Rs. 150 lakhs by cheque dated 11 June 2013 in favour of Linkson Ispat and Energy ....
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....nsic auditors are based on documentary evidence and material collected by them in the form of sale deeds, bank records, the sub-registrar office records, and the title verification reports obtained through an Advocate, therefore, it could not be said that the forensic report prepared by the forensic auditor was prepared without any supporting documentary material or evidence. 63. According to the Appellants, they did not contest the proceedings before Ld. Adjudicating authority, however we notice that fullest possible opportunity was provided by the Ld. Adjudicating Authority to the Appellants to contest the proceedings, however it is due to their own fault they did not contest the proceedings before the Adjudicating Authority and the explanation given by them for not contesting the proceedings before the Ld. Adjudicating Authority does not appear to be genuine and acceptable to us. 64. Even when the Appellants did not contest the proceedings before the Adjudicating Authority they can produce all the material/evidence in support of their defence before us. Once the copy of the Appeal along with the copy of the application moved by the Resolution Professional before the Ld. Ad....