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2019 (9) TMI 1316 - AT - Insolvency and BankruptcyCIRP Process - allegation that fraudulent business activity carried on by Corporate Debtor - defrauding the creditors - HELD THAT:- From bare perusal of Section 66 of I&B Code, it is clear that if during the Corporate Insolvency Resolution Process or Liquidation Process, it is found that any business of the Corporate Debtor has been carried on with intent to defraud creditors of the Corporate Debtor or for any fraudulent purpose, it is always open to the Adjudicating Authority to pass appropriate orders in terms of the said provisions on the application filed by the Resolution Professional. The allegations as levelled by the Resolution Professional, prima facie attracts not only to the provisions of Section 66, but also provisions such as Section 68 punishment for concealment of property; Section 69 punishment for transactions defrauding creditors; Section 70 punishment for misconduct in course of corporate insolvency resolution process; Section 71 punishment for falsification of books of corporate debtor; Section 72 punishment for wilful and material omissions from statements relating to affairs of corporate debtor and Section 73 punishment for false representations to creditors, if found prove - No punishment for imprisonment can be imposed by the Adjudicating Authority (National Company Law Tribunal) except to pass order in terms of Section 66 of the I&B Code. In terms of sub-section (1) of Section 60, the National Company Law Tribunal is the Adjudicating Authority for the purpose of I&B Code. It is having concurrent jurisdiction as the National Company Law Tribunal under the Companies Act, as also as the Adjudicating Authority under the I&B Code - From bare perusal of Section 212 of the Companies Act, 2013, it will be evident that such investigation into affairs of company can be made only on receipt of a report of the Registrar or Inspector under Section 208 of the Companies Act, 2013 or on intimation of a special resolution passed by a company that its affairs are required to be investigated; or in the public interest; or on request from any Department of the Central Government or a State Government. Section 212 does not empower the National Company Law Tribunal or the Adjudicating Authority to refer the matter to the Central Government for investigation by the Serious Fraud Investigation Office even if it notices the affairs of the Company of defrauding the creditors and others - However, investigation into affairs of company at the instance of the Tribunal has been prescribed under Section 213 - For punishment of fraud in a manner as prescribed in Section 447 of the Companies Act, 2013, the matter is required to be tried by a Special Court as established under Section 435 which requires speedy trial for offences under the Companies Act, 2013. The same Court i.e. Special Court established under Section 435 is the Court empowered under Section 236 of the I&B Code for trial of such offence under the I&B Code also. The Tribunal/ Adjudicating Authority, on receipt of application/complaint of alleged violation of the aforesaid provisions and on such consideration and being satisfied that there are circumstances suggesting that defraud etc. has been committed, may refer the matter to the Central Government for investigation by an Inspector or Inspectors as may be appointed by the Central Government - the procedure laid down under Section 213 of the Companies Act, 2013 can be exercised by the Tribunal/ Adjudicating Authority. Appeal disposed off by way of remand.
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