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2020 (2) TMI 1572 - NATIONAL COMPANY LAW TRIBUNAL, CHENNAI BENCHTransfer of an amount (Corporate Debtor funds) within two years before commencement of CIRP - professional fee paid to R1 to organise a loan of ₹ 20 Crore for the business needs of the Corporate Debtor or not - fraudulent intent present or not - burden to prove - HELD THAT:- The money was transferred from the Corporate Debtor to R1. From the records of the corporate debtor there is no material to say that these monies were transferred as commission towards the consultancy services rendered by R1. There are no supporting entries from the books of the Corporate Debtor to prove that this money was paid to R1 towards business purpose. As to the monies shown as paid to R1 by the Corporate Debtor, if at all, monies were paid in relation to the services rendered by R1, the Corporate Debtor should have deducted TDS from those amounts but no information or details reflecting TDS was deducted from the monies paid by the Corporate Debtor to R1 - Normally when an agreement is entered into, both the parties enter into agreements signed by them on behalf of themselves or on behalf of Companies or Partnerships, as the case may be. A case falls within the ambit of Sec. 43 of the Code when repayment was made to the Creditor within the look back period for putting such creditor in a beneficial position than it would have been in the event of distribution of assets made in accordance with Section 53 of the Code - RP says that R1 has not provided any consultancy services to the Corporate Debtor, it was only payments made to R1 to cause unlawful gain to R1 based on sham transactions causing loss to other Creditors. When material is absent to prove that the transaction is genuine, the Respondents shall prove that transaction is not fictitious and they must prove that R1 is entitled for commission and that entitlement was cleared by the Corporate Debtor. In this case, no material is there to prove that R1 acted as commission agent to facilitate the Corporate Debtor to secure loan from SREI and also to secure Purchase Order from Regen. As long as this aspect is not proved, it cannot be said that, the relation in between the Corporate Debtor and R1 is debtor and creditor relationship. If any money has been shown as siphoned from the Corporate Debtor Accounts, as to those monies, if the Corporate Debtor failed to show it as payment to a Creditor, then such payment has to be considered as a fraudulent transaction falling within the ambit of Section 66 of the Code - related party concept comes into existence to look into, when transaction taken place in the period beyond one year look back period and before lapse of two year look back period. As to section 66, look back period and relative or related party concepts will not come into picture, this Bench need not ascertain whether it is in compliance of Section 43 elements. In companies, management is answerable to every transaction, it has to explain and prove every transaction is based on business needs and part of business, mere oral saying will not make any transaction genuine unless supported by material proof, which normally happens in every transaction. In this case, it is shorn of such supporting material. As to the party not in the management of the Corporate Debtor, that is R2, though he is not part of the management of the Corporate Debtor, he knows that R1 has no claim against the Corporate Debtor, therefore he ought to have refunded it to the Corporate Debtor as soon as it came to the account of R1. Had it been genuine transaction, it must have reflected tax payments and tax deductions and R1 must have disclosed that it has been providing similar services to others, but no such material placed - for R3 having not stated that he is not the cause for release of the funds from the Corporate Debtor to R1 and R1 having not proved that this money has come to his partnership firm towards commission, it is held that the impugned transfer of the Corporate Debtor funds to R1 is for fraudulent purpose. R2 and R3 jointly and severally are directed to contribute ₹ 65 lac to the Corporate Debtor within fifteen days from hereof - application allowed.
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