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2018 (8) TMI 1936 - Tri - Insolvency and BankruptcyCIRP process - Violation of section 17 of the Code and moratorium declared under section 14 of the Code by the RP and the directors of suspended board of directors of corporate debtor - direction to corporate debtor to recall the funds allegedly diverted by the directors during the period of moratorium. Whether the Directors of the suspended board of directors of the corporate debtor had transferred the funds of the corporate debtor in violation of section 14 of the Code or in disobedience of the direction issued by the IRP? - HELD THAT:- The RP has no power to permit the directors to operate the corporate debtor independently and that the fund transfer by the corporate debtor subsequent to the declaration of moratorium i.e from 15.01.2018 is illegal and in violation of sections 14 and 17 of the Code. Being found that the fund transfer to the creditors referred to in Annexure R-6 is found in violation of the Moratorium declared in the case in hand those funds to the tune of ₹ 25,78,23,428/- is to be recalled, otherwise the entire CIRP process could be a mockery. However, on going through the list of transfer of fund in the name of the creditors it is understood that certain transfers are related to payment of professional fees to one of its employee of the corporate debtor to whom allegations also leveled by the financial creditors and the audit fee payable to the auditor. Being satisfied that transfer of fund by the corporate debtor is illegal the interim relief as sought for is to be allowed in the case in hand - Accordingly interim relief as prayed for is allowed.
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