2022 (4) TMI 941 - Tri - Insolvency and Bankruptcy

Rejection of claim of applicant - rejection on the ground that the claim amount is not reflected in the books of the corporate debtor and also on the ground that the infusion is made to M/s. Nathella Sampath Chetty Co. which is a different entity - diversion of funds to Corporate Debtor - HELD THAT - The money received in the bank account of M/S. Nathella Sampathu Chetty Co was diverted to the corporate debtor bank account and that the corporate debtor is liable repay the gold scheme investment amount collected from the Applicant through Nathella Sampathu Chetty Co account is bereft of sufficient documentary evidence to show that the funds were diverted to the books of the Corporate Debtor. The contention of the Applicant that the books of the corporate debtor shows that it had received 181.42 crores from M/s. Nathella Sampathu Chetty Co. referring to the FIR registered is for the financial year 2012-2013, while the payment TMT Receipt annexed reflects the date of payment as 28.04.2014. Therefore, it is evident that the amount paid by the Applicant on the gold scheme was not collected by the corporate debtor and that no sufficient evidence as to show the diversion of funds into the Corporate Debtor have been carried out. Under the said circumstances this Adjudicating Authority finds it deems fit to dismiss the instant application for bereft of evidence. Application dismissed.

Summary

Issues:
- Rejection of claim under section 38 of the IBC
- Allegations of diversion of funds from a partnership firm to a corporate debtor
- Failure to consider proof of investment and receipt by the liquidator
- Dismissal of the application due to lack of evidence

Analysis:
The judgment by the National Company Law Tribunal, Chennai Bench, dealt with an application filed against the rejection of a claim under section 38 of the Insolvency and Bankruptcy Code. The applicant had invested in a scheme offered by a company and filed a claim after the company went into liquidation. The applicant argued that the rejection of the claim was unjust as it pertained to the same group concern of the corporate debtor. The tribunal considered the submissions and evidence presented by both parties.

The applicant contended that the rejection of the claim was unfair as the investment amount was not reflected in the books of the corporate debtor. The applicant claimed that funds from a partnership firm were diverted to the corporate debtor's account, making the corporate debtor liable for repayment. However, the tribunal found the evidence provided by the applicant insufficient to prove the diversion of funds. The tribunal noted discrepancies in dates and lack of concrete evidence linking the investment to the corporate debtor.

The tribunal also highlighted the failure of the liquidator to adequately consider the proof of investment and the receipt issued by the corporate debtor. The applicant argued that the rejection was premature and lacked sufficient opportunity for proper consideration. However, the tribunal found that the rejection was based on valid grounds related to the absence of evidence supporting the claim and the separate entity status of the partnership firm.

Ultimately, the tribunal dismissed the application due to the lack of substantial evidence supporting the allegations of fund diversion and the connection between the investment and the corporate debtor. The tribunal emphasized the importance of concrete proof in such matters and concluded that the application was bereft of evidence to warrant setting aside the rejection of the claim. The dismissal was based on the insufficiency of evidence to establish the claim's validity, highlighting the need for clear and irrefutable documentation in insolvency proceedings.