TMI Blog2022 (9) TMI 1294X X X X Extracts X X X X X X X X Extracts X X X X ..... was outstanding and due for payment. Following this discovery, we find that the RP/Respondent methodically took up the matter, as obligated under the IBC, by sending emails/letters at regular intervals to the Appellant No. 1 company including the statutory auditor as well as to Appellants No. 2 to 4 being Directors of Appellant No. 1 company to make good the outstanding amount along with interest @18% per annum. There are no reasons to disagree with the findings of the RP/Respondent that the contents of the SPA do not indicate any role of the Corporate Debtor in the entire transaction - in the absence of any established link of the Corporate Debtor with this share related transaction between Appellant No. 1 and the SRS Ltd., the Adjudicating Authority has concurred in the findings of the RP/Respondent that the amount of Rs. 50 lakh remains outstanding and recoverable from the Appellant No. 1 Company and other Appellants jointly and severally. Whether the recoverable amount of Rs. 50 lakhs is barred by limitation? - HELD THAT:- The claim that the share purchase transaction between the Appellant No. 1 company and SRS Limited amounted to recovery of the said sum lacks credence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chnical ) For the Appellant : Present but appearance not marked For the Respondent : Mr. Rishi Sood , Advocate JUDGMENT [ Per : Barun Mitra , Member ( Technical ) ] The present appeal, filed under Section 61 of the Insolvency and Bankruptcy Code, 2016( IBC in short) by the Appellants arise out of order dated 21.02.2022 (hereinafter referred to as Impugned Order ) passed by the Adjudicating Authority (National Company Law Tribunal, New Delhi, Bench-IV) in I.A. No. 1179/(ND)/2020 in Company Petition No. (IB)/114/(ND)/2018. By the impugned order, the Adjudicating Authority had allowed the application filed by Resolution Professional (present Respondent) under Sections 60(5) and 25 of the IBC directing the present Appellants to jointly and severally pay the Corporate Debtor the principal amount outstanding alongwith interest as claimed by the Resolution Professional. Aggrieved by this, the present appeal has been preferred. 2. The brief facts and genesis of the case is that a Section 9 application under IBC was admitted by the Adjudicating Authority against M/s Saubhagya Ornaments Pvt. Ltd./Corporate Debtor on 13.03.2019 on an application filed by M/s. SRS Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of the Committee of Creditors ( CoC in short) held on 29.04.2019 which is reproduced below: - Since we are unable to get the financial and accounting records of the Company, we had taken the details of promoters/shareholder of the Company from the website of MCA. After meeting them they had informed that they were appointed only for the sake of name and had no information about the accounts, financial affairs, business operations etc. of the company and that they were working under the instructions of certain employees of SRS Group. However, they had referred us the names of employees of SRS Group who could provide us the information or documents . 6. It has also been submitted that Shri Anil Jindal, Whole Time Director and Chairman of M/s SRS Ltd had given a statement on 06.10.2020 before the Serious Fraud Investigation Office ( SFIO in short) admitting that he had appointed his known persons as Directors in the Corporate Debtor and that the bank operations of the Corporate Debtor were looked after by the employees of M/s. SRS Ltd. It has also been stated that Ms. Shweta Marwah, the Company Secretary of M/s. SRS Ltd. had submitted a similar statement on 04.04.2019 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... em which it received from the Corporate Debtor. Further substantiating the same, it has also been stated that the annual filing of the list of Share-holders for Hotline CPT Ltd. for the financial years ending 2016, 2017, 2018 and 2019 does not reflect the name of M/s. SRS Ltd. as shareholder and the Appellant No. 1 continues to be reflected as the shareholder of the Hotline CPT Ltd. 10. It has also been submitted that an amount of Rs. 50 lakhs is found outstanding in the Books of Accounts and audited financials of the Corporate Debtor in the financial year ending 2016-2017. Additionally, Bank Statement has also been referred to by the Learned Counsel for the Respondent to establish the transfer of Rs. 50 lakhs from the Bank Account of the Corporate Debtor to the Appellant No. 1 Company. Based on the Bank Statements, financial records and ledger statements of the Corporate Debtor, the Learned Counsel for the Respondent contended that notwithstanding the absence of any Loan Agreement, the alleged transaction of Rs. 50 lakhs is clearly established between the Corporate Debtor and Appellant No. 1 Company and that this transaction has no nexus with the share purchase transaction betw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs. 50 lakhs was outstanding and due for payment. Following this discovery, we find that the RP/Respondent methodically took up the matter, as obligated under the IBC, by sending emails/letters at regular intervals to the Appellant No. 1 company including the statutory auditor as well as to Appellants No. 2 to 4 being Directors of Appellant No. 1 company to make good the outstanding amount along with interest @18% per annum. 15. It is also noted that Appellant No. 3, who is Director in Appellant No. 1 company on 17.10.2019 has admitted and acknowledged to the RP on behalf of Appellant No. 1 company as at pages 194-195 of the APB that it received Rs. 50 lakhs from the Corporate Debtor while adding the caveat that this amount was used by Appellant No. 1 company against the sale of shares of their other company, M/s Hotline CPT Ltd to M/s SRS Limited. This makes it abundantly clear that the Appellant No. 1 Company received Rs.50 lakhs from the Corporate Debtor by their own admission. 16. This brings us to the concomitant aspect as to whether the outstanding payment was actually repaid by the Appellant No. 1 Company to the Corporate Debtor. We have noticed that the RP/Responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the gullibility on the part of Appellant No. 3 in believing Shri Anil Jindal, who was neither a share-holder nor the Director of the Corporate Debtor, is not a valid excuse and is outrightly rejected. This argument in no way can help the Apellant side from escaping the liability of recovery of the outstanding amount from them. 19. As regards, the statements given by Shri Anil Jindal of M/s SRS Ltd. as well as by some other Directors and employees of the Corporate Debtor before the SFIO and Enforcement Directorate that the Corporate Debtor and M/s SRS Ltd. are related parties, it is not within the remit of this Tribunal to comment on the findings of other investigating agencies and we therefore choose not to make any comments. Suffice to say, the Appellants have clearly failed to submit any authentic legal document/certificate/proof which can unimpeachably establish the fact that the Corporate Debtor is managed and promoted by the M/s SRS Ltd. 20. This brings us to the second point which needs determination and that is whether the recoverable amount of Rs. 50 lakhs is barred by limitation. It has been contended by the Learned Counsel for the Appellants that since the claim p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rights and for being subjected to duties which are distinct from those enjoyed, exercised or discharged by individual members. Thus liability of the corporate entity cannot be automatically fastened on the individual Directors. Furthermore, we note that the Adjudicating Authority while disregarding the separate legal entity of the Appellant No. 1 company has also not recorded the reasons for holding the individual members jointly and severally liable for the obligations of the corporate entity. The Adjudicating Authority is no doubt entitled to lift the veil of the corporate entity but in doing so must delineate the reasons for piercing the corporate veil and show as to how and to what extent the individual members are liable. This not having been done by the Adjudicating Authority, we are of the considered opinion that the outstanding amount alongwith interest is recoverable from Appellant No. 1 company and not jointly and severally at this stage. 22. From the aforesaid discussion, we are of the considered opinion, that the Adjudicating Authority has not committed any error in holding that an outstanding principal amount of Rs. 50 lakhs along with 18% interest is due and recove ..... 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