TMI Blog2022 (7) TMI 312X X X X Extracts X X X X X X X X Extracts X X X X ..... tue of the said lease deed dated 30th November 2016, the Applicant/ Resolution Professional has also been successful to show that the entire business of the corporate debtor has been transferred to a related party to corporate debtor, being Respondent No. 3. Without even considering the aforesaid facts, the applicant/ resolution professional has been successful in showing that the lease deed dated 30th November 2016 itself is grossly fraudulent, illegal and void ab initio in as much as the same has been executed after the issuance of the notice under Section 13 (2) of the SARFAESI Act, 2002 in light of Mannalal Khetan v. Kedarnath Khetan [ 1976 (11) TMI 135 - SUPREME COURT ]. The lease deed dated 30th November 2016 has been executed fraudulently and is grossly undervalued in order to defraud the creditors of Corporate Debtor and accordingly the such act of respondents is liable to be prosecuted under Section 45, Section 49 and Section 66 of the I B Code, 2016. Accordingly, the lease deed dated 30th November 2016 is hereby set aside by this Adjudicating Authority in light of the powers conferred under Section 45, Section 49 read with Section 66 of the I B Code, 2016. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribed in Section 45 of the I B Code, 2016 and reverse the transaction in accordance with Section 49 of the I B Code, 2016 or such other relevant provision; b. Declaration that the lease deed executed on 30th November 2016 and registered on 15th December 2016 with Imax Infrastructures Private Limited, Respondent No. 3, be declared as cancelled, null and void in terms of Section 49 of the I B Code, 2016; c. Direct Imax Infrastructures Private Limited, Respondent No. 3, to forthwith make the differential lease consideration payment after determination of market value of annual lease consideration of the premises; d. Pass appropriate orders in terms of Section 66 of the I B Code, 2016; e. Direct M/s. Shree Ram Saw Mills, Respondent No. 6, to forthwith make the payment amounting to Rs. 11,10,000/- (Rupees Eleven Lakh and Ten Thousand only) along with interest to the corporate debtor with respect to the preferential related party payments; f. Direct M/s. Shova Properties Private Limited to forthwith make the payment amounting to Rs. 5,50,000/- (Rupees Five Lakh and Fifty Thousand only) along with interest to the corporate debtor with respect to the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed an application under Section 19 of the I B Code, 2016 and this Adjudicating Authority vide order dated 9th December 2019 directed the suspended board of directors to hand over custody of all assets, liabilities, and books of accounts to the Applicant. 8. Despite directions passed in the order dated 9th December 2019 the suspended board of directors did not cooperate and accordingly by an order dated 4th February 2020, this Adjudicating Authority suo motu issued show cause notice for initiation of contempt proceedings against the suspended board of directors of CD, being Respondent Nos. 1 and 2 herein. 9. It is also important to observe here that during the first round of hearing of the present application, none of the Respondents chose to either appear or file their reply in the matter, despite notices having been issued and delivered to the said respondents by this Adjudicating Authority. It is also noteworthy to mention here that even before the Hon ble Appellate Tribunal, the Respondents chose not to file any reply despite numerous opportunities given to the said respondents. The Respondents, having given numerous opportunities have purposely not filed any response to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. These persons control R3 and their family companies, Rishikesh Marketing (P) Ltd., Prakash Ply Centre (P) Ltd., Omkar Tradelink (P) Ltd., Sonal Tie-Up (P) Ltd., Shova Properties (P) Ltd. and N.K. Patel Exim (P) Ltd. All these companies and the respective Boards of Directors of these companies, when analysed, show that it is the Pandey family which controls all the above companies by crossholding of shares. Full particulars are contained in the transaction review report of the Chartered Accountant (@ page 56 at 67-71 of application). Therefore, the Pandey family, which controlled CD, have now taken away the entire assets of CD to another company, R3, and is carrying on the same business, selling the same material through that company. Therefore, it is evident that the same business of the CD is being carried on with the intent to defraud its creditors and/or for a fraudulent purpose of wrongful usurpation. Persons responsible are the respondents herein. 14. It is stated that all the Respondents are related parties to the Respondent Nos. 1 2 and all the transactions impugned in the present application have been executed between related parties only, which has also been conclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opted a multiplier of 10. In Gurcharan Singh and Airports Authority of India this Court applied a multiplier of 8 for arriving at the market value of orchard land. The general trend is to adopt a multiplier of 8 to 10 in regard to plantations, fruit groves and orchards and a multiplier ranging from 10 to 12 for agricultural crop land. 17. Accordingly, CD should be entitled to a sum of Rs. 52,67,362/- (Rupees Fifty Two Lakh Sixty Seven Thousand Three Hundred and Sixty Two only) per annum towards lease of only rent, thus cumulating to outstanding of Rs. 2,94,09,437/- (Rupees Two Crore Ninety Four Lakh Nine Thousand Four Hundred and Thirty Seven only) till June 2022 only for the land, excluding the entire working plant, factory and equipments also fraudulently given to Respondent No. 3 on lease. 18. It is further contended that the execution of the lease deed dated 30th November 2016 is further grossly illegal and executed with mala fide and ulterior motive in as much as the CD s accounts were declared as Non-Performing Asset on 30th September 2014 (refer para 3 @ pg. 8 of Supplementary Affidavit) and the land premises along with the entire factory, premises, buildings, sheds, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Professional that due to complete noncooperation by the suspended board of directors of CD, being Respondent Nos. 1 and 2, the RP could identify that such transactions have been made during the look-back period, however, there is no document provided by the suspended board of directors or by respondent nos. 6 and 7 in order to justify that the said transactions were not preferential transactions. 22. It is also stated that there have been huge discrepancies in the stock maintained by the corporate debtor and reporting done on the said stocks of the corporate debtor. The applicant, after examination of the limited documents made available by the suspended directors, has come to the opinion that the suspended directors have been continuously indulging in fraudulent transactions and undervalued transactions and consequently there are huge discrepancies in the stock of the corporate debtor (Transaction Audit Report @ pg. 56). 23. Accordingly, directions have been sought to the Respondent No. 6 and 7 to make payments of Rs. 11,10,000/- (Rupees Eleven Lakh and Ten Thousand only) and Rs. 5,50,000/- (Rupees Five Lakh and Fifty Thousand only) (refer para V (xv) (2) @ pg. 17 of appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntion of Money Laundering Act, 2002 and which was further confirmed by an order dated 6th December 2021 as passed in OC No. 1473/2021 titled as Dy. Director, Directorate of Enforcement v/s. M/s. M.K. Patel Exim Private Limited Ors by Sh. Vinodanand Jha, Chairman (Acting)/ Member (Finance), Adjudicating Authority (under PMLA, 2002), New Delhi. 30. In light of the aforesaid orders having been passed, the Ld. Counsel for the Respondents contend that the present proceedings deserves to be stayed due to the pendency of PMLA proceedings which supercede the insolvency proceedings. 31. The Ld. Senior Counsel for the Applicant/ Resolution Professional informed this Adjudicating Authority that the property under provisional attachment is different from the property in dispute in the present applicant. It was stated that the property bearing the following description has been provisionally attached under the Prevention of Money Laundering Act, 2002: All that piece and parcel of land, building, factory shed, office etc. measuring an area of 13.90 decimal equivalent to 42 Bighas, 15 chattak, lying and situated at Mouza- Banganagar Gotra, Pargana - Azimabad, Touzi No. 392, J. L. No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Respondents have further contended that the corporate debtor only has a meagre share in the land premises and it is Mr. Satya Prakash Pandey and Mr. Murlidhar Pandey who own the major share of the land premises. In such a scenario, there cannot be any cancellation of the lease deed without their permission in as much as the landed property vests with them. 36. The Respondent No. 3 in its reply has further contended that investments to the tune of Rs. 17.62 Crore alleged to have been invested towards additional construction, development and maintenance of factory, plant and equipments of CD. However, the Respondent No. 3 has failed to make any submissions before this Adjudicating Authority during the course of hearing with respect to the said alleged investments. 37. On perusal of the documents annexed with the reply of Respondent No. 3, the invoices annexed at Annexure D does not in any manner reflect that the said invoices have been issued with respect to additional construction, development and maintenance of factory, plant and equipments of CD. It is also pertinent to mention here that the figure of Rs. 17.62 crore itself does not tally from the invoices annexed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 66 of the I B Code, 2016. 42. In addition to the above, the Respondent Nos. 6 and 7 have failed to appear and/ or place their submissions before this Adjudicating Authority. In the absence of any justification to the transactions entered into with related parties, being Respondent Nos. 6 and 7 within the lookback period, the said transactions fall under the ambit of Section 43 of the I B Code, 2016 and accordingly, Respondent Nos. 6 and 7 are hereby directed to make payments of Rs. 11,10,000/- (Rupees Eleven Lakh and Ten Thousand only) and Rs. 5,50,000/- (Rupees Five Lakh and Fifty Thousand only) respectively for being related party preferential transactions under Section 43 of the I B Code, 2016. 43. With respect to the reliefs sought pertaining to infringement of trademark, this Adjudicating Authority refuses to interfere in disputes arising out of Intellectual Property Rights. However, we make it clear that in the absence of any valid agreement assigning the trademark of corporate debtor in favour of respondent no. 3, the respondent no. 3 is hereby restrained from using the property of the corporate debtor. 44. In light of the aforesaid, the present application is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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