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TMI Blog2020 (7) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... rd of directors of the Corporate Debtors as they withdrew, during the currency of the Corporate Insolvency process (CIRP) without the knowledge and/or consent of the Applicant, an amount of Rs. 6,72,12,170.22 (Rupees Six Crore Seventy Two Lakh Twelve Thousand One Hundred Seventy and Paise Twenty Two Only) from a bank account of the Corporate Debtor, out of which an amount of Rs. 1,22,00,000/- (Rupees One Crore Twenty Two Lakh Only) was deposited back by the Respondents in the bank account of the Corporate Debtor, leaving a balance of Rs. 5,50,12,170.22 (Rupees Five Crore Fifty Lakh Twelve Thousand One Hundred Seventy and Paise Twenty Two Only) in violation of moratorium order dated 27.09.2019 passed by the NCLT, Cuttack Bench under Section 14 of the Code, and also in violation of the order dated 23.10.2019 passed by the Hon'ble NCLAT in Company Appeal (AT) (Insolvency) No. 1113 of 2019. It is further submitted that the said amount withdrawn by the Directors of the suspended board of corporate debtor,(hereafter to be referred as directors) has not been deposited back despite giving the undertaking to the Hon'ble NCLAT which has resulted in to the said Appeal being dismissed in defau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the transaction to the resolution professional. He further would submits that if some more time is given he would see that the matter would be settled with the financial creditor and that he had contacted one Asset Reconstruction Company to furnish loan and enable the payout to the Corporate Debtor's account that he had availed a loan from HSBC bank in another Company viz., Giriraj Solvent Extractions Pvt. Ltd., and the sanction of the said loan has been received. Lastly he submits that a settlement proposal was submitted to the sole financial creditor State Bank of India. The last proposal was submitted on 05.05.2020 by the Respondent. The State Bank of India has itself admitted that it was unable to process the OTS proposal quickly due to lock down and limited functioning in view of Covid -19 pandemic. Upon the above said contentions he is attempting to show that the fund he was withdrawn was for genuine purposes in connection with the operation of the business of the corporate debtor. However, no materials or documents to corroborate the above said contentions brought to my notice or to the notice of the RP. 7). Today when this case was again heard through VC, the Ld. Advocate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... awn was paid to the Pack Power and Pooja Trading as an advance during the pre CIRP period and that amount is to be adjusted for the cost of purchase of raw materials from the Pack Power and Pooja Trading. She also submits that the Ld. Counsel for the RP misrepresent the fact that there is no fund in the account of the CD so as to run the business, but as per the account details more than 3 crores is available in the account sufficient enough to run the business of the CD and there is no urgency in moving this application during the difficult time of lock down. 10). In answering to the said submissions the ld. Counsel for he RP submits that the application is perfectly maintainable that Pack Power and Pooja Trading is not at all a necessary or proper party. According to him money transferred from the current account of the CD during the period of CIRP is in violation of the order of moratorium under section 14 and the auctions of the directors comes within the purview of section 66(1) and section 74 (1) of the Code. He also submits that the Hon'ble Appellate Tribunal directed the RP to approach RP for appropriate relief and therefore, filing of this application is perfectly mainta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is authorised to sign the bank cheques may preparte and sign cheques but only after approval of the Interim Resolution Professional and the cheques can be operated/issued only through the hands of the Resolution Professional" 12). Thereafter on 5 th February,2020, when the said interim application and another I.A. No. 516 of 2020 came up for consideration of the Hon'ble NCLAT, an undertaking affidavits were seen filed by Shri Deepak Daga and Manoj Daga undertaking to deposit the amount. Accepting the affidavits of the respondents/directors the Hon'ble NCLAT observed: "The Affidavits and undertakings of both these Respondents are accepted and taken on record. These Respondents shall comply with the Undertakings given. The Ld. Counsel for IRP accepts that Rs. 5,50,12,146/- (Rupees Five Crore Fifty Lakh Twelve Thousand One Hundred Forty Six Only) needs to be returned". It is understood that the respondents undertook to returned the money on or before 05.03.2020. 13). On 12.03.2020, the matter was again came to the consideration before the Hon'ble NCLAT. Till then the money withdrawn by the directors was not remitted back. The Hon'ble NCLAT dismissed the appeal. I am extracting pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers 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 regard to money illegally withdrawn from the accounts of the Corporate Debtor so as to trace the money and get it back in the Company accounts. Prima facie, it appears to us that the illegal withdrawals can, inter alia, be treated as criminal misappropriation and criminal breach of trust. Para 24: The Appellant Manoj K. Daga is present. The other Respondent Deepak Daga is stated to be not present, as not well. Para 25: Copy of this judgment and record of Appeal will be treated as Contempt Case to be registered as 'State vs. Manoj K. Daga and Deepak Daga' as these Directors who will face the contempt case. The Registry will give it a Contempt case number and the same is listed on 7th April, 2020. Counsel for the Appellant states that on that date, Manoj K Daga and Deepak Daga would both attend this Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade to the said supplier by Mr. Deepak Daga. So the said supplier is neither a necessary party nor a formal party. So this ground also found unsustainable under law. 17). Despite the above said proved facts, the directors are not shown any respect to the order. A prudent law obedient man never expected to do this kind of disobedience and breach of their own undertaking. What is attempted on the side of the directors is that they are willing to pay back the amount less Rs. 2 crore allegedly paid to the suppliers of raw materials as stated above and that for payment they need some more time due to disruption of bank transactions due to lock down. Neither the proposals discussed above seems to have genuine nor it would be workable. The conduct and approach of the directors indicates that they were willfully evading repayment on lame excuse under the guise of the lock down due to COVID-19. None of the submissions seen corroborated with any reliable materials on their sides. 18). So the directors are persons neither has any regard for the prices of law nor for the orders issued by the Hon'ble NCLAT. Repeated directions were disobeyed. Breached there own undertakings. Not even cared ..... X X X X Extracts X X X X X X X X Extracts X X X X
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