TMI Blog2020 (6) TMI 690X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Authority and this Tribunal wilfully and there is wilful non-compliance of undertakings given. I.A. No. 1075 of 2020 to seek time to comply undertaking is not honest and appears to have been filed to create grounds of defence to further abuse process to kill time. The I.A. is rejected. Appeal disposed off. - COMPANY APPEAL (AT) (INS) NO.1113 OF 2019, I.A. NO. 3878 OF 2019 & OTHS. - - - Dated:- 12-3-2020 - A.I.S. Cheema, Judicial Member, A.B. Singh And Kanthi Narahari, Technical Member For the Appellant : Sanjay Hegde, Sr. Adv. Aditya Manubarwala, Ms. Prachi Johri, Pranjal Kishore, Varun Varma, Advs. and Manoj K. Daga For the Respondent : Shashank Bhansali, Sandeep Bajaj, Ms. Aakanksha Nehra, Dhananjaya Sud and Ashwini Kumar Singh, Advs. ORDER HEARD LEARNED SENIOR ADVOCATE 1. Shri Sanjay Hegde for the Appellant. Respondent No. 1 - Operational Creditor filed Application under section 9 of Insolvency and Bankruptcy Code, 2016 (IBC - in short) before the Adjudicating Authority (National Company Law Tribunal, Cuttack Bench, Cuttack) having number TP No. 105/CTB/2019 in CP (IB) No. 646/MB/2019 against M/s. Shree Vishnu Power Energy Pvt. Ltd. - C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cluding cash withdrawals started within two days of taking Interim Orders dated 23-10-2019 from this Tribunal which were in violation of the same. The Counsel for IRP complained of Violation of Sections 14, 17 and 19 of IBC. The IRP gave list of these transactions in the I.A. No. 3878 of 2019. The Chart of withdrawals/transfer between 25-10-2019 to 15-11-2019 was given as under:- Name of the recipient Date Amount transferred (in Rs. ) Deepak Kumar Daga 25-10-2019 85,00,000/- Pooja Trading Company 25-10-2019 2,00,00,000/- Chattisgarh State Power 25-10-2019 4,44,400/- Cheque Book Issue Charges 30-10-2019 295/- Self 04-11-2019 1,30,000/- Mukesh Khandelwal 11-11-2019 25,000/- Self 11-11-2019 2,38,000/- Self 11-11-2019 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary No. 16314. It is stated that after the admission of the Section 9 Application proceedings, the Directors of the Corporate Debtor have in violation of the Orders dated 23rd October, 2019 passed by this Tribunal in Appeal, made huge withdrawals including cash withdrawals without prior approval of the IRP. It is stated that the Order of this Tribunal had specified that the IRP will keep the Company a going concern with the assistance of the Board of Directors, officers and employees and had recorded that the person who is authorized to sign the bank cheques may issue cheques but only after approval of the Interim Resolution Professional. Learned Counsel for IRP states that without taking any approval of the IRP, the amounts as stated in the Application to the extent of ₹ 4,54,73,285/- have been withdrawn from the account maintained with Vijaya Bank. 3. It is stated on instructions by the learned Counsel for the Appellant that the cheques were issued by the authorized signatory -Deepak K. Daga - another Director of the Company, The IRP will add Deepak K. Daga in addition to Appellant as a Respondent in this Application. Issue Notice to Appellant and Deepak K. Daga also, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of Insolvency and Bankruptcy Code, 2016 management of Corporate Debtor after admission of Section 9 application is with the IRP/RP. The order dated 23-10-2019 required IRP of the Company to keep the Company as a going concern and the Board of Directors, Officers and employees were only expected to assist the IRP but in the present transaction the Directors have taken actions without involving the IRP. We are not happy with the Affidavits filed by Manoj Daga and Deepak Daga. 7. Considering the submissions made and serious objections that the learned Counsel for the IRP is raising and considering the fact that the order dated 23-10-2019 was passed by Three Judge Bench headed by Hon'ble Chairperson, considering the gravity and seriousness of the matter, we direct the Registry to place the matter before the Hon'ble Chairperson to constitute appropriate Bench. The matter may be re-listed before the Bench as the Hon'ble Chairperson may direct. Tentatively, we post the matter to 6th January, 2020. 8. The above two Respondent Directors shall remain present personally on next date. They need to deposit the money withdrawn/transferred without approval of the IRP in the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11-2019 7.22/- 5. Lokesha Chourasia 25-11-2019 2,17,886/- 6. Charges for RTGS Customer Payment: VIJBH19329020101 25-11-2019 7.22/- 7. Deepak Kumar Daga 26-11-2019 5,80,000/- 8. SMS Charges 19-12-2019 29.50/- Total Amount 12,68,861.34/- 10. Counsel for IRP stated that the total amount withdrawn or transferred was ₹ 6,72,12,146/-. He also pointed out that after the Order of this Tribunal, the Directors had returned back amount of ₹ 40/- Lakhs and again of ₹ 50 Lakhs, only. Our Order dated 3-2-2020 reads as under:- 03-2-2020 Heard Learned Counsel Ms. Prachi Johri in I.A. No. 469 of 2020. This application is filed for modification of order dated 17th December, 2019, wherein para 8, this Hon'ble Tribunal had observed that the Directors shall remain present personally on next date, and that thus need to deposit the money ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same. The Affidavits and Undertakings of both these Respondents are accepted and taken on record. These Respondents shall comply with the Undertaking given. The learned Counsel for IRP accepts that ₹ 5,50,12,146/- needs to be returned. The learned Counsel for the Appellant states that the Appellant is taking steps to settle the dispute with the Original Operational Creditor as well as sole Financial Creditor - State Bank of India and will make efforts to settle with other Operational Creditors also. The Counsel makes request to continue the Interim Order not to constitute COC (Committee of Creditors) for short period to give time to the Appellant to settle with all the debtors. For reasons stated, one opportunity is given. List the Appeal in 'Orders category' on 26thFebruary, 2020 before which date the Appellant must ensure settlement as stated by the learned Counsel. In default, we will proceed to vacate the direction with regard to constitution of COC. 12. The undertakings given were thus accepted. Counsel for IRP did not remind us on this date contents of the proceedings noted in earlier Order of ours dated 18-11-2019 that Our Order regarding COC w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hattisgarh within 4 weeks. I have already deposited a sum of ₹ 1,22,00.000/- in the aforesaid account as follows: Date Amount 25-1-2019 ₹ 7,00,000/- 20-1-2020 ₹ 40,00,000/- 23-1-2020 ₹ 50,00,000/- 28-1-2020 ₹ 25.00,000/- TOTAL ₹ 1,22,00,000/- 15. The proceeding dated 26th February, 2020 shows the further developments as under:- 26-2-2020 Learned Counsel for the Appellant states that the Appellant has settled with the original Operational Creditor and is also making efforts to settle with the only Financial Creditor- State Bank of India and making efforts to settle with the other Operational Creditors who have responded to the IRP. Appellant may continue with the efforts stated being made with the Financial Creditor and Operational Creditors. It is stated that the Appellant and the Directors are taking steps to ensure that they comply with the undertaking given on 4-2-2020 accepted on 05-2-2020 for whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... possibility of settlement. It is stated that State Bank had to recover ₹ 45 Crores in September, 2019. 18. The learned Counsel for IRP submits that these Directors had withdrawn most of the amount of the Corporate Debtor after the CIRP had been initiated which is clearly not permissible when the moratorium had been applied. The learned Counsel for IRP states that COC meeting has been held on 6th March, 2020 but if the IRP is unable to give effect, the CIRP itself would get stranded or stayed and given the fact that the amounts withdrawn were withdrawn in an illegal manner after moratorium had been imposed, no further time needs to be given. Learned Counsel states that the IRP is under the responsibility under the provisions of IBC to keep the Corporate Debtor a going concern and if almost the whole money which was in the bank account, has been withdrawn, the IRP has been rendered helpless in the situation. 19. The learned Senior Counsel for the Appellant states that although the money was withdrawn, it was for the purpose of keeping the business a going concern. 20. The learned Counsel for IRP in Reply states that the IRP has verified each and every entry of the amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dertakings given. I.A. No. 1075 of 2020 to seek time to comply undertaking is not honest and appears to have been filed to create grounds of defence to further abuse process to kill time. The I.A. is rejected. The acts of the two Directors have obstructed the proceedings of CIRP, the proceedings before Adjudicating Authority and this Tribunal. The acts prima facie disclose serious Contempt, violating mandate of law of IBC applied by Orders of Adjudicating Authority and this Tribunal and breach of undertaking given on oath, actionable as NCLT established under the Companies Act, 2013 acts as Adjudicating Authority and this Tribunal is empowered under section 425 of Companies Act, 2013 read with enabling provisions to take action. 23. At the same time, considering record which shows that Appellant violated Orders of Adjudicating Authority and this Tribunal and looking to the apparent default on record where undertakings were given and not honoured, we find that the Appeal deserves to be dismissed in default. We dismiss the Appeal in default while permitting the IRP to move the Adjudicating Authority or any other authorities including Police authorities to pursue the matter with re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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