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2021 (1) TMI 1322 - Tri - Insolvency and BankruptcyContributions to the assets of the Corporate Debtor equivalent to the sums as stated in this application, in respect of benefits wrongfully availed by from the Corporate Debtor - recovery/ restoration of legitimate amounts due to the Corporate Debtor in terms of Section 67 of IBC - intimation to IBBI for initiating a complaint to the Special Court in terms of Section 236(2) of the Code - imposition of fine under section 70 and 71 of the Code. HELD THAT - The Bench is aware that section 66 (1) of IBC imposes a liability on any person who knowingly becomes party in carrying out the business with a dishonest intent to defraud the creditors have to make a contribution to the assets of the Company. Therefore, the Bench is of the considered view that the R1 i.e Baiju Trading investment Private Limited who is the principal beneficiary of this fraudulent transaction has to return at least Rs. 41.03 crores into the account of Corporate Debtor Company. The Bench is also of the view that R2 and R3 are the suspended directors of the Corporate Debtor company and are covered under section 66 (2) of the IBC with respect to their misconduct which makes them liable to make such contribution to the assets of the Corporate Debtor company. The Bench concludes that it is clear from the above that R1 is fairly covered under provisions of section 66 (1) and R2 and R3 are covered under section 66(2)(a) and 66(2)(b) of the Code. Since, the R1 is the principal beneficiary of this transaction and has clearly admitted to the dues owned to the Corporate Debtor, the Bench directs that an amount of Rs. 41.03 crore be remitted back by R1 into the bank account of the Corporate Debtor company within 7 days from the pronouncement of this order. Application allowed.
Issues:
1. Application seeking reliefs for contributions to assets of Corporate Debtor. 2. Directions/orders under Section 67 of the Code for recovery/restoration of amounts due. 3. Intimation to IBBI for initiating a complaint under Section 236(2) of the Code. 4. Imposition of fines under Sections 70 and 71 of the Code. Analysis: 1. The Applicant filed an Application seeking contributions to the assets of the Corporate Debtor from the Respondents, alleging wrongful benefits availed. The Applicant highlighted exceptional preference given to one Respondent in business transactions. 2. The Applicant emphasized non-cooperation from directors in providing information, leading to suspicions of fraudulent transactions. The Respondents, on the other hand, denied fraudulent intent and attributed non-repayment to financial difficulties. 3. The Tribunal noted discrepancies in ledger accounts and balance sheets, indicating potential fraudulent activities. The Respondents' attempts to write off outstanding amounts were viewed as fraudulent. 4. The Tribunal found the principal beneficiary and suspended directors liable under Section 66 of the Code for dishonest intent to defraud creditors. The judgment referenced relevant regulations and Supreme Court decisions to support the findings. 5. Consequently, the Tribunal directed the principal beneficiary to remit the outstanding amount to the Corporate Debtor within a specified timeframe, holding the Respondents accountable under the Code. This detailed analysis of the judgment showcases the legal proceedings, arguments presented by the parties, and the Tribunal's findings and directives based on the provisions of the Insolvency and Bankruptcy Code.
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