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2022 (5) TMI 433 - AT - Insolvency and BankruptcySeeking directions to be issued to the Directors of the Corporate Debtor/the Appellants herein to make good the losses caused on account of the fraudulent transactions entered into by them - Seeking reference of the matter to IBBI in view of the provisions under Sections 236 of the Code - HELD THAT:- Section 18(1)(a) of I&B Code clearly specifies that the IRP shall collect all information relating to the assets, finances and operations of the ‘Corporate Debtor’. Section 18(9) to perform other duties as specified by the Board. In fact, in this case the appointment of the IRP was not ratified in the first CoC and he continued to function as IRP. Viewed from the provisions under the Code, in the event of suspicion of any fraudulent transaction, it cannot be said that the IRP did not have the power to collect information and furnish a detailed analysis to the Adjudicating Authority. The contention of the Learned Counsel for the Appellant that the Appellants herein did not operate the Bank Account or were not involved in any Bank Transaction, post their resignation, is untenable. These Bank Transactions post resignation, squarely fall within the ambit of Section 66(1) i.e., ‘it is found that the business of the ‘Corporate Debtor’ has been carried on with an intent to defraud Creditors’. Amounts written off as bad debts only because they could not be recovered - HELD THAT:- A perusal of the scanned copy of the Bank Statement evidences that the Adjudicating Authority has rightly concluded that there are no reasons given for how an amount of Rs.42,33,304/- has been settled for a mere payment of Rs.3 Lakhs/-. This fraudulent transaction took place during the time the Appellants were Directors of the ‘Corporate Debtor’ and squarely falls within the ambit of Section 66 of the Code. The debts written off to defraud the Creditors, the cash transaction post their resignation evidencing their financial control in the affairs of the ‘Corporate Debtor’, clearly establish that they are ‘fraudulent transactions’ done with a wilful intention of financial gain at the cost of negatively effecting the Creditors - Appeal dismissed.
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