Sapna Singhal, RA Vs Naresh Kumar Harlalka & Four Others
IA (IBC)/73/GB/2022 In CP (IB)/20/GB/2021
Facts:
1. Mr. Akhil Ahuja was appointed as Interim Resolution Professional by this Tribunal vide order dated 01.04.2022 by allowing CP (IB) No.20/GB/2021- whereby CIRP against the Corporate Debtor / Byrnihat Coal Private Limited (‘BCPL’), a private limited company and a registered MSME. In the 2nd Meeting of the Committee of Creditors (hereinafter referred to as “CoC”) dated 06.05.2022, it was resolved to replace Mr. Akhil Ahuja and appoint Mr. Purshotam Gaggar, the Applicant herein, as the Resolution
Professional (RP) of the Corporate Debtor.
2. Applicant after perusal of the limited documents of the Corporate Debtor formed an opinion that certain transactions of the Corporate Debtor were within the purview of avoidable transactions. Thereafter, the Applicant in pursuance of his duties as the Resolution Professional appointed a Transaction Auditor to carry out investigation into the affairs of the Corporate Debtor and the report dated 02.09.2022, was submitted wherefrom it is clear that several transactions have been carried which amount to transactions entered into with the intention of defrauding creditors as stipulated under Section 49 of the Insolvency and Bankruptcy Code, 2016.
Issue: Whether the application can be allowed?
Argument:
Respondent:
1. Counsel submitted that Application of the Applicant is not maintainable for want of limitation as the Application is filed beyond the prescribed period i.e., 135 days as mentioned in Regulation 35A of Insolvency (Resolution Process for Corporate Persons) Regulations, 2016. It was further submitted that there is want of infirmity as there was no proper resolution of the CoC for appointment of Transaction Auditor and deciding their fees. The RP did not apprise the members of the CoC regarding the appointment of any Transaction Auditor.
2. Counsel submitted that opinion so formed by the RP that several transactions carried out, are fraudulent in nature and that the business of the CD was carried out to defraud the creditors is based solely on the report dated 02.09.2022 of the Transaction Auditor. The Transaction Auditor has not concluded that all the transactions referred in the Application are fraudulent in nature. Moreover, the Report clearly mentions that the RP needs to take legal opinion to determine criminality of the Promoter/Company and accordingly, take directions from Adjudicating Authorities.
3. It was submitted that CD, in terms of a Deed of Gift dated 09.09.2016, had absolutely and unconditionally granted, conveyed, transferred and gave unto the answering Respondent 80,000 equity shares of Mahalaxmi Continental Limited as gift to the answering Respondent in due compliance of the laws, execution of share transfer form, including Form SH – 4. The allegation that the transaction is undervalued and entered into with the intent to defraud creditors qua the answering respondent is baseless and has no legs to stand. Be as it may, the Respondent No. 5, being the donee, is ready and willing to return the shares back in favour of the CD to ensure amicable resolution of the dispute.
4. Counsel submitted that Transfer of shares by gift will not fall within the definition of transfer in gift which cannot be the nature of business of the CD.
Decision: NCLT allowed the application partly.
Rationale:
1. NCLT noted that the Respondents have failed to clarify/explain the urgent requirement of funds so mentioned by them and have also not provided any annexures with regards to the Corporate Guarantee. There is no justification for advance in respect of Corporate Guarantee. In the absence of any evidence in connection with the same, this Bench has no option but to determine that the transaction of advance sum of Rs. 38.60 Lakh is an avoidance transaction, made with the intention to defraud its creditors, as
soon after the said advance made in the FY 2018-19, the CD filed an Application with this Tribunal under Section 10 of the Code initiating CIRP against itself, which is clearly indicative of financial stress within the company during the preceding years.
2. It held that no valuation has been carried out for the shares to determine the fair value of the shares as on date of transfer and the loss has only been calculated on the basis of the difference in purchase price and sale price of the shares, it would not be proper for this Tribunal to presume any ulterior intent to defraud on part of the CD. Hence, in light of the aforementioned reasoning, this Tribunal cannot arrive at a conclusion that this sale of shares to M/s Ajay Ananya Kumar (HUF) is a transaction carried out with the intention to defraud its creditors.
Order: