Home Case Index All Cases Insolvency and Bankruptcy Insolvency and Bankruptcy + AT Insolvency and Bankruptcy - 2022 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (12) TMI 611 - AT - Insolvency and BankruptcyCIRP - bonafide nature of the transactions or not - recovery from the ex-directors of the corporate debtor - forensic and transaction audit of the corporate debtor was conducted - increase in quantum of commission from 5% to 32% - transfer to stock from one warehouse to another, instead of selling the same as scrap - HELD THAT:- An increase in commission percentage of 32% in the FY 2018-19 is appropriately explained by the Appellant as being related to ‘commission’ representing many services which were provided by the new company Y2Y Fashions. The “sealing” of the corporate debtor’s warehouse in early 2018 and also the cancellation of its teleshopping arrangement with channels such HomeShop18 and ShopCJ were driving factors that were instrumental in the decision of the promoters/ex-directors of the corporate debtor to set up a new company Y2Y Fashions International Limited which would do website hosting, and provide a number of services as covered in the T-commerce Vendor Agreement. We are convinced by the argument of the Appellant that this was done in the normal course of business to let the corporate debtor function in the changed business environment. Such an arrangement, even though with related party, cannot be termed as preferential transactions done to defraud the creditors of the corporate debtor. We are of the clear view that the Adjudicating Authority has committed an error in arriving at the inference that the amount of Rs.83.97 lakhs was transferred by the corporate debtor to Y2Y Fashions Pvt. Ltd., a related party, and is, therefore, a diversion by the corporate debtor and Y2Y Fashions Pvt. Ltd. with an intention to defraud the creditors of the corporate debtor by the ex-directors of the corporate debtor. Ex-directors of the corporate debtor and Y2Y Fashions Pvt. Ltd. shall not be liable to make contribution to the extent of Rs. 83.97 lakhs in the account of the corporate debtor. Appeal allowed
|