9911796707
TMI Blog2019 (7) TMI 1823X X X X Extracts X X X X X X X X Extracts X X X X ..... porate debtor. 2. Thereafter, four company applications were filed. These are discussed briefly as below : (i) C. A. No. 337/C-2/ND/2018 has been filed by M/s. Phoenix ARC P. Ltd. (in its capacity as trustee of Phoenix Trust FY 16-15) against the inclusion of Spade Financial Services Ltd., as financial creditor in the CoC. The applicant is one of the financial creditors and is also member of the CoC of M/s. AKME Projects Ltd. In this application the following prayers are made : (a) Direct the interim resolution professional/resolution professional for the removal of the name of Spade Financial Services Ltd., from the committee of creditors of AKME Projects Ltd., and not to allow Spade Financial Services Ltd., from either participating or voting or representing in the committee of creditors ; and/or (b) Direct for constitution of the committee of creditors as per pro visions of the Insolvency and Bankruptcy Code, 2016, read with the Insolvency and Bankruptcy (Amendment) Ordinance, 2018 ; (c) Pass appropriate orders against Spade Financial Services Ltd., and its promoters/directors for contravening the provisions of the Insolvency and Bankruptcy, 2016 ; (d) Pass any other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade : (a) Allow the present application and direct the interim resolution professional to reconstitute the committee of creditors in terms of the pro visions of the Insolvency and Bankruptcy Ordinance, 2018 ; (b) Allow the present application and pass directions prohibiting the interim resolution professional from allowing M/s. Spade Financial Services Ltd., to represent, participate and vote in the meeting of committee of creditors ; and (c) Pass any such further order(s) that this hon'ble Tribunal may deem fit in the facts and circumstances of the case. 3. The main issue in these four applications is the challenge by two financial creditors, Yes Bank and Phoenix, regarding the inclusion of Spade Financial Services Ltd., and its whole owned subsidiary AAA Landmark P. Ltd., as financial creditors in the committee of creditors formed in the case of AKME Projects Ltd. The main ground of challenge is that Spade Financial Services Ltd., and AAA Landmark P. Ltd., are companies promoted and managed by Shri Arun Anand who is a related party of the corporate debtor. 3.1 Yes Bank Ltd., has stated in C. A. No. 268 of 2018 and C. A. No. 269 of 2018, that their voting share in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts P. Ltd. (JIPL), acting through Mr. Anil Anand (director of corporate debtor) became a majority shareholder of corporate debtor by purchasing the shares from Mr. Arun Anand. Presently, there are only two shareholders of the CD, namely, Joint Investments P. Ltd. (JIPL) (80 per cent.) and Helmut Nanz (20 per cent.). The major shareholders of JIPL who have more than 5 per cent. shareholding are Anil Nanda (65.60 per cent.) Hari Raj Investment and Consultants P. Ltd. (24 per cent.) and AN Enterprises P. Ltd. (9.60 per cent.). (ii) M/s. Spade Financial Services Ltd. (referred to as Spade) was incorporated on October 21, 1994 and was promoted and managed by Mr. Arun Anand who is the director and majority shareholder. The other directors include his wife and daughter. As on March 31, 2014 the details of its shareholders having more than 5 per cent. shareholding is as follows : Name of shareholders % shareholding Class A Mr. Arun Anand 58.75% Mrs. Renu Anand 13.11% Mr. Aditya Anand 11.82% Ms. Gayatree Anand 10.92% Joint Investments P. Ltd. 5.39% Class B Mr. Arun Anand 100.00% * M/s. AAA Landmark P. Ltd. (referred to as A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons done before and after the date of agreement to sell and this indicates that the agreement was not at a fair price and indicates other con siderations. 5. Connection between Mr. Arun Anand and the CD. Mr. Anil Nanda is the director and major shareholder of JIPL, the company holding 80 per cent. of the CD's share. The corporate debtor is a part of Anil Nanda Group of Companies (TANG). The details of employment of Mr. Arun Anand in executive positions in companies where Mr. Anil Nanda held managerial positions and also companies promoted and managed by Mr. Anil Nanda is as follows : Years Positions held Company 1. 1979-1993* Various Positions Including General Manager Escorts Ltd. 2. 1993-1995 General Manager (Finance) Nanz Foods Products Ltd. 3. 1996 General Manager GI Power Corporation Ltd. 4. 1996-2003 Various positions including whole-time director the executive director Goetze India Ltd. 5. 2005-2007 Vice Chairman and Managing Director Federal Mogul Goetze 6. 2007-2011 Consultant (Through Spade) AKME Projects Ltd. 7. 2012-2013 Group CEO Anil Nanda Group of Companies 8. 2012-2013 Group CEO Anil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 5(24)(b) of the IBC, 2016 being a key managerial person. Even otherwise, both Mr. Arun Anand and Spade Financial Services Ltd., on account of their being CEO/Strategic Advisor/Consultant at the relevant time would fall within the ambit of a related party in terms of section 5(24)(h) and section 5(24)(m)(i) of the IBC, 2016. ► Both Mr. Anil Nanda and Mr. Arun Anand were the directors of Federal Mogul Goetze (India) Ltd., while Mr. Anil Nanda was the director of the said company from April 7, 1997 to January 22, 2007 and Shri Arun Anand was the managing director from September 24, 2002-September 24, 2007. This clearly established a close nexus between the three entities. (CD, Spade and AAA). ► Mr. Arun Anand is closely related to one of the directors of the corporate debtor, i. e., Mr. Sonal Anand being his co-brother, brother of Shri Arun Anand's wife who was also director of the corporate debtor till November 7, 2013. ► Mr. Sonal Anand and Mr. Anil Nanda are still directors in AKME Westover Projects P. Ltd. (however, this company has since been struck off). The said Mr. Sonal Anand and Mr. Anil Nanda have been common directors on the board of foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 02 which has also been concealed before this hon'ble Tribunal. In the said suit pending before the hon'ble Delhi High Court, Spade Financial Services Ltd., and owned subsidiary AAA Landmark P. Ltd., have tried to show that they are entitled to receive payments against the alleged ICDs sanctioned to the corporate debtor. This leads to only one conclusion that the corporate debtor and AAA Landmark P. Ltd., and Spade Financial Services P. Ltd., are hand in glove with each other. ► It is stated by the applicants that the contention put forth by AAA Landmark P. Ltd., and Spade Financial Services P. Ltd., that they were no longer related party to the corporate debtor at the time of filing of the petition or the initiation of CIRP and therefore, it cannot be contended that they are a related party within the ambit of section 5(24). In this regard, it is submitted that the applicants have been able to demonstrate that AAA Landmark P. Ltd., and Spade Financial Services P. Ltd., were related party of the corporate debtor at the time when the alleged transaction took place and if the interpretation as sought to be put forward by AAA Landmark P. Ltd., and Spade Financial Servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nies on other hand, ever. * The holding company of the CD, JIPL, holds shares equivalent to 1.45 per cent. voting rights in Spade. * Mr. Sonal Anand was only a non-executive director of the CD and he was never in employment of the CD or held shares in CD. Further, Sonal Anand was never in employment nor was a director or shareholder in either Spade or AAA. * The audited balance-sheets of the CD duly reflected the ICDs of Spade as well as the interest being paid thereon at the time of grant of such facilities and the facilities must have been granted and were granted after detailed due diligence of CD thus with full knowledge of the ICDs and transactions outstanding. * There are several suits and litigations pending between the CD and Spade/AAA including suit filed by Spade in the Delhi High Court in 2017 seeking recovery from CD's holding company. It is seen that JIPL invested Rs. 73.58 crores in Spade in 2007, and subsequently, Spade gave the corporate deposit of Rs. 66 crores to the corporate debtor and directed the corporate debtor to adjust Rs. 43 crores against AAA for property development agreement. 7. An affidavit was filed on July 31, 2018 by Anil Nanda, suspen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8.1 AAA Landmark P. Ltd., has also alleged that the applicant Yes Bank Ltd., is acting in cahoots with the ex-management. It is also stated that the IRP has not been able to discharge his duty in an appropriate manner due to ill health as recorded in the meeting of the CoC vide order dated January 1, 2018. 9. C. A. No. 224/ND/2018 has been filed on June 8, 2018 by Mr. Anil Nanda, the suspended director of the corporate debtor. In this application he is questioning the legality of the first CoC meeting on June 1, 2018 where the CD's representative was asked to leave and another financial creditor, namely, Mrs. Susheelamma was not given notice. Apart from this several allegations of siphoning of funds of CD and illegal acts by Mr. Arun Anand and his companies, Spade and AAA Landmark, have been made on behalf of the CD. Details of suits and police complaints filed by the CD against Mr. Arun Anand, Spade and AAA Landmark have also been given. In view of the details given in this application, it is submitted by the CD that no amount can be said to have been financed or paid by the abovementioned two companies to the corporate debtor. There is no loan facility against the time val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er any acceptance credit facility or its dematerialised equivalent ; (c) any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument ; (d) the amount of any liability in respect of any lease or hire purchase contract which is deemed as a finance or capital lease under the Indian Accounting Standards or such other accounting standards as may be prescribed ; (e) receivables sold or discounted other than any receivables sold on non-recourse basis ; (f) any amount raised under any other transaction, including any forward sale or purchase agreement, having the commercial effect of a borrowing. Explanation.-For the purposes of this sub-clause,- (i) any amount raised from an allottee under a real estate project shall be deemed to be an amount having the commercial effect of a borrowing ; and (ii) the expressions, 'allottee' and 'real estate project' shall have the meanings respectively assigned to them in clauses (d) and (zn) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016) ; (g) any derivative transaction entered into in connection with protection ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is transaction does not qualify as a financial debt as defined under section 5(8) of the Code, and Spade Financial Ser vices Ltd., does not qualify as a financial creditor under section 5(7) of the Code. 11.2 The details of transaction and entered by CD with AAA Landmark have been discussed in detail in paragraph 4.3 above. It is seen that as regards to the same property the parties entered into several agreements over a period of 3 years, including plot buyers agreement, the memorandum of understanding, development agreement and finally agreement to sell dated October 25, 2012. By the development agreement dated March 1, 2012 38.3 per cent. of the development rights of the project named "AKME Raaga" were sold to AAA for Rs. 32.80 crores and subsequently on October 25, 2012 the agreement to sell was executed to superseding the development agreement with an enhanced value of Rs. 43.06 crores. The multiplicity of agreements regarding the same property, with no explanation or rational reasoning regarding variation in values of transaction, shows that these transactions are also collusive in nature and an attempt to divert the properties of the CD to AAA for reasons best known to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relative of a director or partner of the corporate debtor ; (b) a key managerial personnel of the corporate debtor or a relative of a key managerial personnel of the corporate debtor ; (c) a limited liability partnership or a partnership firm in which a director, partner, or manager of the corporate debtor or his relative is a partner ; (d) a private company in which a director, partner or manager of the corporate debtor is a director and holds along with his relatives, more than two per cent. of its share capital ; (e) a public company in which a director, partner or manager of the corporate debtor is a director and holds along with relatives, more than two per cent. of its paid-up share capital ; (f) anybody corporate whose board of directors, managing director or manager, in the ordinary course of business, acts on the advice, directions or instructions of a director, partner of manager of the corporate debtor ; (g) any limited liability partnership or a partnership firm whose partners or employees in the ordinary course of business, acts on the advice, directions or instructions of a director, partner or manager of the corporate debtor ; (h) any person, on whose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s or instructions, the individual is accustomed to act ; (i) a company, where the individual or the individual along with its related party, own more than fifty per cent. of the share capital of the company or controls the appointment of the board of directors of the company. Explanation.-For the purposes of this clause,- (a) 'relative', with reference to any person, means anyone who is related to another, in the following manner, namely :- (i) members of a Hindu Undivided Family, (ii) husband, (iii) wife, (iv) father, (v) mother, (vi) son, (vii) daughter, (viii) son's daughter and son, (ix) daughter's daughter and son, (x) grandon's daughter and son, (xi) granddaughter's daughter and son, (xii) brother, (xiii) sister, (xiv) brother's son and daughter, (xv) sister's son and daughter, (xvi) father's father and mother, (xvii) mother's father and mother, (xviii) father's brother and sister, (xix) mother's brother and sister, and (b) wherever the relation is that of a son, daughter, sister or brother, their spouses shall also be included." There is no doubt in our mind that Arun Anand and hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
