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2019 (4) TMI 1772 - Tri - Insolvency and BankruptcyMaintainability of application - Attachment of personal assets - it is alleged that respondents are responsible for defrauding the creditors in order to recover the total dues - principles of res-judicata - scope of Section 66 of the I B Code - sufficient evidence produced by the Applicant like Forensic Report or not - HELD THAT - The present application is filed stated to be revised Application of earlier IA No. 269 of 18 dated September 2018 under same Sections by seeking same relief after adding some other respondents by inter alia seeking to attach personal assets of Respondents No. 1 to 3 without disclosing as what are properties to be attached basing the finding of Forensic Audit report. It is true that once an application/petition is disposed of finally normally another application/petition is not maintainable on the same issue basing on the principles of res-judicata. However basing on the material evidence like Forensic Audit Report submitted by the Applicant we are not inclined to throw the application on technical grounds and to decide the matter on merits of the case. The Learned Resolution professional has not placed any substantial material before the Tribunal to show as what course of action she has taken in pursuance to the order dated 24th October 2018 passed in IA No. 269 of 2018 except merely contending that that Criminal action is separate and Section 66 proceedings are different and thus there is no bar for the applicant to file an another application in view of new material i.e. Forensic Audit Report available. It is true Section 60(4) of Code confers powers on the Adjudicating Authority with all the powers of Debt Recovery Tribunal for the purpose of CIRP Liquidation or Bankruptcy etc. However basing on various allegations of fraud on the part of the Ex- Directors of Corporate Debtors since the year 2011 the matter requires further investigation basing on the Forensic Audit Report. The findings given in Forensic Audit Report only prima established the fraudulent transactions in question. Therefore it is necessary to conduct further investigation by SFIO in the affairs of Company basing on the findings given in Forensic Audit Report after affording proper opportunity to concern opposite parties to defend them - Hence we are inclined to refer the matter to SFIO for further investigation by invoking powers conferred U/s. 212/213 of the Companies Act 2013 and thereafter aggrieved party can take appropriate legal course of action. Application disposed off.
Issues Involved:
1. Maintainability of the application under Sections 66, 25(2), 69, and 70 of the I&B Code, 2016. 2. Sufficiency of the Forensic Audit Report as evidence. 3. Scope of summary proceedings under the Code to address complex fraudulent transactions. 4. Necessity of further investigation by institutions like SFIO. Analysis: 1. Maintainability of the Application: The Tribunal considered whether the application under Sections 66, 25(2), 69, and 70 of the I&B Code, 2016, was maintainable. The Respondents argued that the application was not maintainable due to the principles of res-judicata, citing a previous order where the Tribunal had directed the RP to initiate criminal proceedings. However, the Tribunal decided to consider the application on its merits, given the new evidence provided by the Forensic Audit Report. 2. Sufficiency of the Forensic Audit Report: The Tribunal scrutinized the Forensic Audit Report submitted by BDO India LLP, noting several shortcomings and disclaimers. The report mentioned that it was prepared solely for the Bank of Maharashtra and not intended for third-party reliance. Additionally, there were gaps in the data, such as unidentified transactions and discrepancies in the claimed amounts. The Tribunal concluded that the Forensic Audit Report alone could not serve as conclusive evidence for recovering the alleged fraud amount. 3. Scope of Summary Proceedings: The Tribunal examined whether the summary nature of proceedings under the I&B Code could address complex issues like fraudulent transactions. It noted that the allegations required a more detailed investigation beyond the scope of summary proceedings. The Tribunal emphasized the necessity of a thorough investigation by a specialized agency like the SFIO to ascertain the veracity of the allegations and counter-allegations. 4. Necessity of Further Investigation: Given the complexity and seriousness of the allegations, the Tribunal decided to refer the matter to the SFIO for further investigation. It directed the RP to forward all relevant documents, including the Forensic Audit Report, to the Central Government, which would then refer the case to the SFIO. The Tribunal also instructed the Bank of Maharashtra to assist the SFIO in the investigation. Conclusion: The Tribunal disposed of the application with the following directions: 1. The RP must forward all relevant documents to the Central Government within three weeks. 2. The RP must provide these documents to all parties, adhering to principles of natural justice. 3. The Central Government must refer the matter to the SFIO for further investigation into the affairs of the Corporate Debtor, Bank of Maharashtra, and related entities. 4. The Bank of Maharashtra must assist the SFIO in the investigation. 5. Parties are free to pursue appropriate legal action based on the SFIO's findings. 6. The application was disposed of in light of these directions, with no order as to costs.
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