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2021 (12) TMI 1374 - Tri - Insolvency and BankruptcySham and fraudulent transactions, therefore null and void - Contribution to the assets of the Corporate Debtor in terms of Section 66 of the Code by reimbursing/refunding the amount with an interest @ 12% - direction to erstwhile/suspended board of Directors i.e. Non-Applicants/Respondent Nos. 15 to 20, to provide the details and addresses of the independent parties - Section 68, 69, 70 of IBC - HELD THAT:- After the initiation of CIRP in terms of Section 14(1), all proceedings, the institution of suit or continuation of pending suits against the corporate debtor shall remain stay during the Moratorium. Similarly in terms of Section 33(5) when a liquidation order is passed no suit or other legal proceeding shall be instituted by or against the Corporate Debtor. Of course, it is subject to the provision contained in Section 52 of the IBC - A bare perusal of the provision shows that the exception referred to in Section 32A is not applicable in case of a promoter or in the management or control of the corporate debtor or a related party of such a person. Though the proceeding under Section 66 shall not be continued against the respondent No. 1, as the respondent No. 1 is under liquidation but the promoters, the persons in the management/control of the Corporate Debtor or a related party of such person are still liable under Section 66 of the IBC. There is no material produced on behalf of the respondents on the record, which controvert the pleadings of the applicant We further notice that the prayer of the applicant is based upon the Transaction Audit conducted by the Chartered Accountant for the period from 01.03.2013 (date of Incorporation of the Corporate Debtor) to 21.10.2019 (date of order of Initiation of CIRP against the Corporate Debtor). It is observed that so far the preferential transactions under section 43, avoidance of undervalued transaction under section 45 and section 50 are concerned, in the absence of the relevant documents and information, the Auditor has shown their inability to comment on these transactions - A perusal of the provision shows that if during the corporate insolvency resolution process or liquidation process, it is found that any business of the corporate debtor has been carried out on with intent to defraud creditors of the corporate debtor or for any fraudulent purpose the Adjudicating Authority may on the application of the resolution professional or liquidator as the case may be pass an order. The respondents No. 2 to 21, the suspended board of directors of the corporate debtor and other related persons were carrying on business with intent to defraud the creditors of the corporate debtor or with fraudulent purpose and accordingly, they misappropriated Rs. 2687.27 Lakhs and diverted to their own use with intent to defraud the creditors. Therefore, they are liable to make such contribution to the assets of the corporate debtor - the Respondents number 2 to 21 are directed to make contribution of Rs. 2687.27 Lakhs jointly or severely to the assets of the corporate debtor within a period of maximum 02 months from the date of this order. And if they fail to pay the aforesaid amount within the prescribed period, then same shall be realised from their property/properties. The present application is hereby allowed.
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