TMI Blog2022 (6) TMI 493X X X X Extracts X X X X X X X X Extracts X X X X ..... this Adjudicating authority had issued directions, but in spite of that the RP was not diligent enough to make use of it. Application dismissed. - I.A. (IB) No. 841/KB/2020 And I.A. (IB) No. 1288/KB/2020 In C.P. (IB) No. 1510/KB/2018 - - - Dated:- 30-5-2022 - Mr. Rohit Kapoor , Member ( Judicial ) And Mr. Harish Chander Suri, Member ( Technical ) For the Resolution Professional : Mr. Jatinder Singh Dhatt , Adv For the R1, R2, R3 R6 in IA/841/2020 : Mr. Kuldip Mallik, Adv. for R1,R2,R3,R6 to R11 in Ms.Labanyasree Sinha, Adv. IA/1288/2020 For the R4 R5 IA/841/2020 : Mr. Jitendra Patnaik, Adv. ORDER Per : Harish Chander Suri, Member (Technical): 1. This Court convened through video conferencing. 2. This Order will dispose of I.A (IB) No. 841/KB/2020 in C.P. (IB) No.1510/KB/2018. 3. The Interlocutory Application No. 841 of 2020 has been filed by the Applicant Shri Kuldeep Verma (Resolution Professional) under section 60(5) and section 25(2)(j) of the Insolvency and Bankruptcy Code, 2016, read with Rule 11 of the National Company Law Tribunal Rule, 2016, seeking the following reliefs from this Adjudicating Authority: a. For the combi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... distributed among approximate untraceable or dummy 120 numbers of stooges and henchmen . It is submitted that the holding company admittedly had Respondent no. 2 and 3 as controlling directors and Respondent No. 4 and 5 as other directors. It is submitted that the declaration of assets submitted to the Registrar of Companies have been found fictitious and that no access to documents and books of accounts has been allowed to the RP. 5. It is submitted that Respondent No. 1 holding company and the guarantor of loan/respondent no.6 have filed fabricated and unsigned documents on the record of this Adjudicating Authority through Form-C (submission of claim by Financial Creditors) dated 18/02/2020 to the RP and posing the holding company as creditor of the subsidiary/ Corporate Debtor herein . It is submitted that the intent is to dominate the COC, so as to restrain from exposing the patent illegality. It is submitted that the liability of the guarantor and borrower is co-extensive and consolidated liability. It is submitted that Respondent No. 4 and 5 by collusive letter dated 7th February, 2020, clearly refused to disclose anything or to cooperate with the RP. The total claim rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19(2) and directed the directors and officers of the Corporate Debtor to cooperate with the RP in successful completion of CIRP in time bound manner, failing which, the IRP may approach local police for assistance and local police shall assist the RP for taking possession of the assets and books of accounts of the Corporate Debtor. 9. It is reflected from the record placed before us by the applicant that in the 6th meeting of the CoC held on 13th March, 2020, it was recorded as under:- Item-1 Chairman of the Meeting Mr. Kuldeep Verma, holding registration no. IBBI/IPA-001/IP-P00014/2016- 17/10038, has been appointed as the Resolution Professional (RP) of Advance Multisystem Broadband Communications Limited ( hereinafter referred as AMBCL) by the Hon ble National Company Law Tribunal, Kolkata Bench vide order dated 13/01/2020.As per Regulation 24 of Insolvency and Bankruptcy Board of India ( Insolvency Resolution Process for Corporate Persons) Regulations, 2016, the Resolution Professional shall act as the Chairperson of the meeting of the Committee of Creditors. Accordingly, Mr. Kuldeep Verma, being the RP chaired the Meeting by welcoming all present. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hare purchase agreement for sale of 59% (approx.) shares for consideration of Rs.1 lakh only on 29.03.2019 in a private arrangement for a post-dated cheque of 02.05.2019. A copy of agreement is annexed as Annexrure-7. Action and legal remedies available with COC and other creditors On request of COC and other creditors Mr.Dhatt summarized as follows: IX. Hon ble NCLT has already directed police authorities to assist RP as per its order dated 24.02.2020. Request and reminders were made to the said police authorities to comply with Hon ble NCLT order dated 24.02.2020. No positive response received from the said authorities till date. X. A clear design of creation of holding /subsidiary layers to insulate the assets of the corporate debtor deliberately and hence being liable for preferential transactions/undervalued transactions/ Fraudulent trading transactions under IBC 2016 even during the twilight period wherein the intention to cause prejudice to the creditors is embedded and thus also prima facie attracts section 49 of the IBC. XI. Sale of shares of corporate debtor was done by holding company at a distress value without making a public offer to overcome i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umbai Dear Sir/Madam, The undersigned has been appointed as Resolution Professional by Hon ble National Company Law Tribunal, Kolkata Bench vide its order dated 13.01.2020. Advanced Multisystem Broadband Communications Limited (AMBCL) has taken credit facilities from Allahabad Bank, Bandel branch from time to time. On perusal of Allahabad Bank sanction letter dated 16.11.2017, it is noted that one of the terms and condition of sanction is that Shares of Promoters of AMBCL should not be transferred without prior consent of the Bank. The undersigned is in receipt of mail dated 29.11.2019 from the Company Secretary, Induslnd Media Communications Limited (IMCL) stating that IMCL has sold its whole investment in AMBC to an investor. The details of the mail sent by Company Secretary IMCL is as per trail mail. Kindly confirm whether Allahabad Bank has given prior consent for transfer of Promoters shares to Induslnd Media Communications Limited (IMCL and if yes, kindly share the consent to undersigned. In case Allahabad Bank has not given prior consent for transfer of shares in AMBCL, then what action Allahabad Bank has taken so far. You are requested to r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the largest shareholder who funded the business operations. Mr. Santimoy Ghosh (DIN No. 00884993) and Mr. Sujit Das (DIN No. 00885256) were managing the day to day business affairs of the company and supervising all the business activities and the branch office at Chinsurah, West Bengal for last six years. The other set of directors appointed by Induslnd Media Communications Limited namely (Mr. Rouse Koshy and Mr. Subhashish Mazumdar) were based in Mumbai and were advising on strategic aspects, management and technical support and government/ regulatory approvals. In such a circumstance, it was difficult to conduct Annual General Meeting as 121 shareholders comprising of 99.18% of the total shareholders base have illegally shifted their business and abandoned the Company. However, we are committed to comply with the statutory filings and therefore we are filing the Financial Statement (Form AOC-4_XBRL) and Annual return (Form MGT-7) without holding AGM in view of the above circumstances. Kindly acknowledge receipt of the same. Yours faithfuly For IndusInd Media Communications Limited Bijay Kumar Authorised Signatory . 14. The m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not have been subject to the terms and conditions laid down in the sanction letter dated 16.11.2017. Therefore, the transfer of equity shares held by Respondent No.1 in the Corporate Debtor to Respondent No.7 cannot be said to be in violation of the sanction letter dated 16.11.2017. The respondents have further submitted that the petition filed under section 60(5) read with Section 25(2)(j) of the Code is not maintainable as the petition does not have any cause of action because no property of the Corporate Debtor has been sold. Respondent No.1 has transferred its own holding in the corporate debtor to Respondent no.7 and the same cannot be challenged under the Code. It is stated that these shares were not mortgaged with any Bank or Financial Institutions and were free from any encumbrance. 18.It is further submitted by Respondent No.1, in one of the Board meetings held on 1st February, 2019 (page 77 of the reply), the illegal act, mismanagement and fraudulent act caused by promoters and directors of the corporate debtor has been stated. It is stated that such mismanagement and fraudulent act had caused huge financial losses to the corporate debtor as well as depleted and erode ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated that this respondent even attempted to dominate the CIRP by filing vague and bogus Form-C with the RP. 24. The applicant had further submitted that the Directors of Respondent No. 1 have acted in contemptuous violation of the order dated 24th February, 2020 passed by this Adjudicating Authority under section 425 of the Companies Act, 2013. 25. It is submitted that Respondent no.1 is the promoter and holding company of the Corporate Debtor. Respondent no.1 has sold its shareholding in the corporate debtor thereby violating the terms and conditions as stated in the sanction letter dated 16th November, 2017 issued by Allahabad Bank. It is submitted by the applicant that the transfer of equity shares held by Respondent No.1 in the Corporate Debtor to the Respondent No.7 is a preferential and undervalued transaction. The Ld. Counsel for the Respondent No.1,2,3 and 6 to 11 in IA No. 1288/2020. 26. In reply to the arguments of the applicant, it is submitted by the respondents that the application is not maintainable. The order dated 13th January, 2020, in respect of which, it has been alleged that the same has not been complied with does not indicate in what manner and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, the order dated 24th February, 2020 passed by this Adjudicating Authority was not and could not possibly have been directed against them. 32. The Respondents, therefore, prayed that these two applications are not maintainable as against the respondents because there has been no illegal or fraudulent transaction done by the said Respondents. The said application are, therefore, liable to be dismissed. 33. During the course of arguments, Ld. Counsel for the Respondent No.4 and 5 submitted that the Corporate Debtor was one of the operating entities between the broadcasters and the Local Cable Operators (LCOs) and was instrumental in carriage revenue and placement fees as well as to comply with certain requirements. Some of the local cable operators (LCOs) in the Hoogly district had joined hands to form a multi System Operator (MSO)/CD. 34. It is submitted that prior to implementation of the Digital Addressable System (DAS) there was an analogue system of cable operation. But with the introduction of DAS, the supply of set top boxes was mandatory. The implementation of the said DAS was divided in 4 phases. However, the LCOs did not have the fund to supply set top boxes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt fee, increase in monthly recurring expenses and increase in interest cost. The LCOs through their representative directors in the Board repeatedly requested IMCL for their intervention to bail out the company. Ultimately IMCL agreed to pay an amount of Rs. 90 Lakhs in exchange of pledge of their entire shareholding of the LCOs. The LCOs having no other alternative but for their survival agreed to the said proposal and allowed IMCL to take over entire shareholding of the company. Since IMCL became 100% shareholding and at the same time since the local money lenders were after the representative directors of the local cable operators, they have resigned from the Board of the Corporate with effect from 4th August, 2018. The respondent no.4 and 5 have tendered their resignation letters upon all other directors, IMCL did not file the Form No. DIR-12 with RoC the Respondent No.4 and 5 themselves filed the Form No. DIR- 11 on dated 7th August, 2018 to record their resignation from the Board of the Corporate Debtor. As such the respondent no.4 and 5 are no more directors of the said Corporate Debtor and are not part of the suspended board of directors as they have resigned much prior to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clear that the RP himself was not sure as to whether the transactions impugned are wrong as alleged. He himself is seeking a Forensic Audit, as is evident from one of his prayers in the application. 41. We are of the view that the RP can file an application under section 25(2) (j) only after being satisfied about the particular transactions being avoidable, fraudulent or undervalued. Similarly, in terms of Section 25(2(d), it was incumbent upon the RP to seek assistance of the Forensic Audit if so required, to engage the services of accountants, legal or other professionals with a view to satisfy himself about the transactions being avoidable. 42. In the present case admittedly the RP has not sought the aid of any expert professional if it was required for ascertaining the transaction being avoidable. And for arriving at a complete satisfaction about the transaction to be avoidable, the RP could not have directly approached this Adjudicating Authority for the relief sought by him. 43. The Hon ble Supreme Court in the case Anuj Jain Vs Axis Bank Limited and others in Civil Appeal Nos. 8512-8527, 6777-6797 of 2019 and Civil Appeal Nos. 9357-77 of 2019 (Arising out of Diary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fraud the creditors or had been of wrongful/fraudulent trading are entirely different. Specific material facts are required to be pleaded if a transaction is sought to be brought under the mischief sought to be remedied by Sections 45/46/47 or Section 66 of the Code. As noticed, the scope of enquiry in relation to the questions as to whether a transaction is of giving preference at a relevant time, is entirely different. Hence, it would be expected of any resolution professional to keep such requirements in view while making a motion to the Adjudicating Authority . 44. The aforesaid directions and observations of the Hon ble Supreme Court directly apply to the facts of this case. We see from the contents of present application filed by RP, there are no specific material facts as required to be pleaded if , a transaction is sought to be brought under the mischief sought to be remedied by Sections 45/46/47 or Section 66 of the Code. We also note that there was no enquiry conducted by RP in the present case, as required by Hon ble Apex court, in relation to the questions as to whether a transaction is avoidable, fraudulent or avoidable. It has been clearly observed by Hon ble Sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation). 48.In reply to this contention of the applicant, respondent no.1 has duly submitted that there was no restriction and could not have been any restriction with regard to the sale of shares held by Respondent No.1 in the Corporate Debtor. The shares are not the properties of the Corporate Debtor and therefore, there is no question of transfer of any property of the Corporate Debtor at undervalued or in a preferential manner. It has specifically been denied by the respondents that they were ever the promoters of the Corporate Debtor. It is stated that Respondent No.1 had entered into a Share Subscription Agreement dated 18.05.2012 whereby Respondent No.1 had paid a consideration of Rs.5,16,07,381/- for allotment of 51% shares and thereafter when the Corporate Debtor required more financial investment, Respondent No.1 had paid a further sum of Rs.5,15,07,381/- and additional 274070 number of equity shares were allotted to Respondent No.1 thereby increasing the shareholding in CD of Respondent No.1 to 59.61%. Even thereafter, Respondent No.1 had advanced a loan of Rs.90 lacs to the Corporate Debtor and in lieu of the same, 47835 number of equity shares were pledged in favour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, agreement or document to which it is a party, or release any obligation to any person under such contract, agreement or document, or give any person the right to terminate any of its obligations under such contract, agreement or document . 52. In its reply respondent no.1 and 6 have submitted that, respondent no. 6 was one of the directors of respondent no.1.Ld. Counsel for the respondent submitted that there is no suo motu contempt, because the applicant has not been able to prove any violation done by the respondents. It is submitted that respondent no.1 has sold its own shareholding in the corporate debtor, which was not asset or property of the Corporate Debtor. 53. It is submitted by learned counsel for the respondents that the applicant has filed this application under section 60(5) read with section 25(2)(j) of the Code, 2016. Since Respondent No.1 has transferred its own holding in the Corporate Debtor to Respondent No.7, the same cannot be said to be an asset of the Corporate Debtor and therefore cannot be challenged under the provisions of IBC, 2016. This act of sale has been performed by Respondent No.1 pursuant to a Board meeting of the Respondent No.1 held ..... X X X X Extracts X X X X X X X X Extracts X X X X
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