TMI Blog2021 (6) TMI 839X X X X Extracts X X X X X X X X Extracts X X X X ..... gulation 40A has been arrived at taking into consideration a period of 180 days. In any case, Regulations do not prevail over the Act and thus, the arguments as advanced by the Respondents in relation to this issue are required to be brushed aside. Whether the impugned transactions have been made during the 'ordinary course of business'? - HELD THAT:- The impugned transactions which have been carried out by the Respondents do not have any characteristics of transactions made during 'ordinary course of business' and thus the contentions raised by the Respondents in this regard stand rejected as being devoid of merits - It is also required to be noted that section also do not specify the 'related party' in relation to the Corporate Debtor or Individual being a Director of the Corporate Debtor, as both the definitions under Section 5(24) and 5(24-A) fall under Part-II concerning Insolvency Resolution and Liquidation for Corporate Persons. Validity of composite Application - Respondent contends that in view of the Judgment passed by the Supreme Court in ANUJ JAIN VERSUS AXIS BANK LTD. [2020 (2) TMI 1259 - SUPREME COURT ] , this Application being a com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elief as sought for by the Applicant in clause (a) of Para VII is granted - The 1st, 2nd and 3rd Respondents are directed to repay the sum of ₹ 5,26,99,936/-, ₹ 11,55,142/- and ₹ 1,00,000/- respectively along with interest chargeable at bank rates to the Applicant/Liquidator within a period of 60 days from the date of this order. Application disposed off. - MA/581/IB/2019 in CP/467/(IB)/CB/2017 - - - Dated:- 9-6-2021 - R. Varadharajan, Member (J) And Anil Kumar B., Member (T) For the Appellant : B. Dhanaraj, Advocate For the Respondents : Rohan Rajasekaran and M. Vijayan, Advocates for King Partridge ORDER R. Varadharajan, Member (J) 1. This is an Application which has been preferred by the Liquidator of the Company under liquidation viz., M/s. Tiruppur Surya Textiles Pvt. Ltd. u/s. 35(b), 35(k), 35(l), 45, 46 . 48 of IBC, 2016 r/w Rules 11 and 32 of NCLT Rules, 2016. The gravamen of the charge as against the Respondents, upon perusal of the Application, it is seen that they have been indulging in the avoidable transactions as contemplated under the provisions as stated above in relation to which this Application has been filed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lued transactions during the period as provided for. 7. In relation to the 1st Respondent, the following table is provided in the Application which is extracted as hereunder being relevant, namely:- 8. In support of the same, during the course of submissions made by him, the Learned Liquidator relied upon Page No. 14 of the typed set filed along with the Application being the ledger account extract of the 1st Respondent as maintained in the Books of the Company under liquidation for the period between 1st of April 2015 to 31st March 2016. The Learned Counsel for the Liquidator, more particularly, brings to the attention of this Tribunal the accounting entries as reflected in relation to cash transfer to the Director viz., the 1st Respondent in a sum of Rupees One Crore on 31.07.2015, again a sum of Rupees One Crore effected on 20.10.2015 and thereafter on 31.01.2016 being the payment of ₹ 1,15,00,000/- to the Director concerned/1st Respondent all of which were in cash. Again, in Page No. 15, Learned Counsel for Liquidator points out to the ledger accounts as maintained in the Books of the Company under Liquidation for the period between 1st April 2016 to 31st March ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom which a sum of ₹ 1,00,000/- it is pointed out being a payment made on 09.10.2015 to the said individual and it is highlighted by Learned Counsel for Liquidator that the said payment is not in relation to the ordinary course of business of the Company under liquidation/erstwhile Corporate Debtor. 13. During the course of submissions, the Learned Counsel for the Liquidator in all fairness, taking into consideration the decision of the Hon'ble Supreme Court as reported in (2020) 8 SCC 401 in Civil Appeals Nos. 8512-27 of 2019 with Nos. 6777-97 of 2019 and 9357-77 of 2019 decided on February 26, 2020 in the matter of Anuj Jain, Interim Resolution Professional for Jaypee Infratech Limited-Vs-Axis Bank Limited and Others sought for withdrawal of the relief portion as reflected in clause (b) of para VII of the Application and that he will not be pressing for the said reliefs in view of the Hon'ble Supreme Court holding in the Anuj Jain's case (supra) a composite petition cannot be filed in relation to the avoidable transactions and in the circumstances Learned Counsel for the Liquidator presses for the reliefs as prayed for in relation to clause (a) of paragraph V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on has been chosen to be filed in the month of June 2019 by the Applicant only consequent to the Liquidation order, which was passed by this Tribunal on 11.01.2018. 18. It is also contended that as against the 4th and 5th Respondents, the claim as sought to be portrayed by the Applicant as an actionable claim cannot also be sustained as nothing prevented the Applicant acting as a Resolution Professional in bringing forth the claim in relation to the Corporate Debtor as against the 3rd party and in this connection the decision of the Hon'ble NCLAT rendered in Union of India and another-Vs-Videocon Industries Ltd. and others in Company Appeal (AT) (Insolvency) No. 408 of 2019 decided on August 30, 2019 is sought to be relied on in as much as the provision under moratorium is only enforced from recovery of any amount from the Corporate Debtor and not vice versa. 19. Learned Counsel for Respondents viz., R1, R4 and R5 during the course of his submissions also points out as contended in the reply statement that no prior notice has been given to these Respondents and in the absence of the same it cannot be construed as a 'gift' in relation to these Respondents as sought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent has also contended in its counter individually filed that a sum of ₹ 19,55,500/- as recorded is in relation to the Opening Balance on 01.04.2015 and never transferred and the same was not received by the 3rd Respondent and that even assuming and without admitting that the said transaction had taken place, it seems to be beyond the period of two years period and hence is barred by the period of limitation as provided in the concerned provision itself. 25. In relation to a sum of ₹ 1,00,000/- as reflected in page No. 18 being the ledger account of the 3rd Respondent as maintained in the Books of the Company under liquidation/Corporate Debtor on 09.10.2015 it is contended that the same was transferred for incurring expenditure in relation to negotiate with State Bank of India regarding for one time settlement and during the said process the 3rd Respondent was required to make multiple travels to meet the Senior Executives of the State Bank of India and in the circumstances he had spent more than ₹ 1,00,000/- towards travel, accommodation etc. and hence the amount which was received is as a reimbursement of expenses incurred and was not received as income fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; (c) require any person to pay such sums, in respect of benefits received by such person, to the liquidator or the resolution professional as the case may be, as the Adjudicating Authority may direct; or (d) require the payment of such consideration for the transaction as may be determined by an independent expert. 49. Transactions defrauding creditors.- (1) Where the corporate debtor has entered into an undervalued transaction as referred to in sub-section (2) of section 45 and the Adjudicating Authority is satisfied that such transaction was deliberately entered into by such corporate debtor- (a) for keeping assets of the corporate debtor beyond the reach of any person who is entitled to make a claim against the corporate debtor; or (b) in order to adversely affect the interests of such a person in relation to the claim, the Adjudicating Authority shall make an order- (i) restoring the position as it existed before such transaction as if the transaction had not been entered into; and (ii) protecting the interests of persons who are victims of such transactions: Provided that an order under this section- (a) shall not affect any i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under Section 43, 45 and 50, which entitles the Liquidator also to file an Application, would be rendered as otiose. Moreover, section 12 of IBC, 2016 states that CIRP period has to be completed within a period of 330 days, while the model timeline as found in Regulation 40A has been arrived at taking into consideration a period of 180 days. In any case, Regulations do not prevail over the Act and thus, the arguments as advanced by the Respondents in relation to this issue are required to be brushed aside. 29. Further, the Respondents have also tried to set up a defence that the impugned transactions have been made during the 'ordinary course of business'. The Respondents, apart from the above assertion of statement being made, have not placed on record any document in order to substantiate the same. Further, the impugned transactions which have been carried out by the Respondents do not have any characteristics of transactions made during 'ordinary course of business' and thus the contentions raised by the Respondents in this regard stand rejected as being devoid of merits. Further the plea of the 2nd and 3rd Respondents that the extended period provided for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dy stated, however once again reiterated, was initiated based on an Application filed under Section 10 of IBC, 2016 and hence it is a peculiar case wherein the Directors/Promoters of the Corporate Debtor themselves have approached this Tribunal to declare the Corporate Debtor as insolvent and thereby initiate CIRP. In relation to the documents being filed by the Liquidator, the same being a ledger account, in the absence of any rebuttal by the Respondents in relation to the entry being made in the books of account, this Tribunal necessarily has to presume prima facie that the entries are true and the transactions in relation to the same have been carried out. All those entries are necessarily being shown in the balance sheet of the Corporate Debtor. In diverse context, the Supreme Court has held that balance sheet would amount to acknowledgment of debt, in the sense that the entries made in balance sheet are presumed to be true entries and the Court/Tribunal is required to proceed with the same, unless or otherwise it is proved to the contrary. 32. Further, Section 3 of the Commercial Documents Evidence Act, 1939 states that the Court shall presume that the documents as mentione ..... X X X X Extracts X X X X X X X X Extracts X X X X
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