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TMI Blog2020 (1) TMI 1711X X X X Extracts X X X X X X X X Extracts X X X X ..... New Delhi Bench -III in CP (IB) No. 55 /ND/2018 titled as 'Hari Krishan Sharma Versus AKME Project Limited'. By the impugned order the Adjudicating Authority has held that Mr Arun Anand and his Companies, namely, Spade and AAA Landmark were related parties to the 'Corporate Debtor'. However, after 2013 (soon after signing the Agreement to Sell ), Arun Anand resigned from Anil Nanda Group, and so they are no longer related to the 'Corporate Debtor' at the time of filing of an application for initiation of 'Corporate Insolvency Resolution Process'. The Adjudicating Authority further observed that the affairs of the 'Corporate Debtor; as well as the Group of Arun Anand companies are deeply entangled and it is difficult for the Tribunal in a summary jurisdiction to unravel the same. Considering that the 'Corporate Debtor' and Spade and AAA were in close business relationship in the past and also the fact that the accounts of the 'Corporate Debtor' have not been finalised and audited and filed with the Registrar of Companies since 2016, the Adjudicating Authority has allowed the application of the Yes Bank Limited and Phoenix ARC Priv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... porate Debtor, AKME Projects Limited, in terms of Section 5(24) and Section 21(2) Insolvency and Bankruptcy Code, 2016? 6. The brief facts of the case are that the Corporate Insolvency Resolution Process (CIRP) has been initiated against the Corporate Debtor AKME Projects Limited on 18th April 2018 on an application filed by the Operational Creditor, respondent No.1. During Corporate Insolvency Resolution Process (in short "CIRP‟) claims were invited by Interim Resolution Professional (in short "IRP‟). The appellants Spade Financial Services Private Limited and AAA Landmark Private Limited filed their claims as Financial Creditors. The "IRP‟ rejected the claim of appellant No.1 on the ground that the alleged transaction does not involve time value money. The appellant No.2 claim was rejected by "IRP‟ on the ground that it was received after the last date of submission of the claim as stated in public announcement. The rejection of the claim was challenged before the Ld. Adjudicating Authority. The Adjudi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd is a baseless and against the record. Mr Arun Anand was not Director of Corporate Debtor, nor any allegation was made in this regard. Appellant has also raised the issue that finding of the Adjudicating Authority regarding the collusive transaction is based on non- credit of Rs. 43.06 crores in the account of Mr Arun Anand, is based on a false assumption about entire amount under ICDs, which was never given to the Corporate Debtor. It is further contended by the appellant that Association of Mr Arun Anand with the Corporate Debtor and its Group of Companies as Director and shareholder is also baseless and against the record. The finding of the Adjudicating Authority is based on factually incorrect facts. The appellants vehemently contended that they are not a related party to the Corporate Debtor. The allegations for five years before the commencement of CIRP would not be a relevant consideration, given the provision of Section 43(4) and Section 46 of the Insolvency and Bankruptcy Code, 2016 (in short "I&B Code, 2016). 11. We have heard the counsel for both the parties and perused the record. Admittedly appellants are the Financial Creditors of the Corporate Debtor AKME Project ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Debtor AKME Projects Limited. Mr Sonal Anand was Whole Time Director of Joint Investment Private Limited, i.e. the holding company of AKME Projects Limited and Mr Anil Nanda was Promoter/ Director of the AKME Projects Limited. c) On 8th February 2011, Memorandum of Understanding between appellant Spade Financial Services Private Limited and the Corporate Debtor AKME Projects Limited was entered into towards Spade Financial Services Private Limited shares in AKME Raaga Projects (At page 391 of the reply of Phoenix). At the time of Memorandum of Understanding, Mr Arun Anand was the Financial Consultant for the Corporate Debtor AKME Projects Limited, and at that time Mr Sonal Anand was Whole Time Director of Joint Investment Private Limited (holding company of a Corporate Debtor AKME Projects Limited) and Director of the Corporate AKME Projects Limited, and Mr Anil Nanda was the Director of the Corporate Debtor AKME Projects Limited. d) On 18th May 2011, an Agreement to Sale was executed between Corporate Debtor AKME Projects Limited and the appellant Spade Financial Services Private Limited for alleged development of the project. The said agreement was entered, even though Spa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... promoter of AKME Projects Limited. h) On 16th/17th January 2013, email was sent by Mr Sonal Anand, the relation of Mr Arun Anand, to Mr Anil Nanda for 3rd party debts to Mr Bawa (At page 845 of the reply of respondent No.5). At the time of this email and Mr Arun Anand was Financial Consultant/Strategic Advisor for AKME Projects Limited, Mr Sonal Anand was Whole Time Director of the holding company of the Corporate Debtor AKME Projects Limited, and Mr Anil Nanda was Promoter/Director of the Corporate Debtor AKME Projects Limited. i) Admittedly, Spade Financial Services Private Limited was incorporated on 21st October 1994 and was promoted and managed by Mr Arun Anand, who was the Director and Majority Shareholder. The other Directors included his wife and daughter. The AAA Landmark Private Limited is a 100% subsidiary of the Spade Financial Services Private Limited and was incorporated in June 2011. Spade Financial Services Private Limited gave inter-corporate deposits to the Corporate Debtor from 1st June 2009 to January 2013 amounting to Rs. 66 crores vide Memorandum of Understanding dated 12th August 2011. Out of inter- corporate deposits given by Spade Financial Services Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rother- in- law (Brother of Mr Arun Anand‟s wife), who was the Director of Corporate Debtor from November 2007 to 2013. It is further contended by the respondents that said Mr Sonal Anand and Mr Anil Anand have common Directors on the Board of the same Group of Companies, i.e. GI Power Company Limited, AKME Projects Limited, Akme Rhine River Projects Private Limited, Joint Investment Private Limited, GI Insurance Services Limited, Akme Maintenance 86 Utilities Limited and cathedral acme Projects Private Limited. 14. The appellant also contends that Mr Arun Anand has admitted in affidavit dated 4th August 2018 before the Adjudicating Authority that, Mr Sonal Anand was a Non-Executive Director of the Corporate Debtor, which categorically shows that Mr Arun Anand and Mr Sonal Anand fall in the category of a related party in terms of Section 5(24) of the I&B Code, 2016. 15. It is further pointed out by the IRP that Spade Financial Services Private Limited was claiming monies transferred by it to the account of AAA Landmark Private Limited, as Inter Corporate Deposit to the Corporate Debtor AKME Projects Limited, but no interest is claimed on such debt. 16. Respondent further c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e debtor in terms of Sec 5(24)(a) of the Insolvency and Bankruptcy Code 2016. On perusal of the documents filed by the parties, it is also apparent that AKME Projects Ltd, i.e. Corporate Debtor, promoted by Sri Arun Anand and his son Mr Aditya Anand, being majority shareholder therein. The Arun Anand and his family members, i.e. his wife, his son and daughter are the majority shareholder in the Appellant SPADE Financial Services. The said Mr Arun Anand, Ms Renu Anand and Ms Gayatree Anand are the directors of the Appellant SPADE, while Appellant No 2, AAA Landmark is wholly owned subsidiary of it. It is an undisputed fact that Mr Arun Anand is the director of the Appellant SPADE Financial Services since its inception. Even though Mr Arun Anand claims that he resigned from the corporate debtor since 2007. But even after that, the Appellant Spade Financial Services, was appointed as Consultant on 1.6.2009 to carry out the assignment, assigned by the corporate debtor. It is also on record that first Inter Corporate Deposit was given by the Appellant SPADE FINANCIAL SERVICES on 1.6.2009 when Appellant SPADE was appointed as a consultant. (Page 117-119 of Respondent No‟s 4 repli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being the relative also falls within the definition of a Related party in terms of Sec 5(24)(a) read with Sec 5(24)(A) of the Code. On perusal of the documents specifically, Memorandum of Understanding signed on 2nd December 2010 signed between Spade Financial Services Private Limited through Mr Arun Anand and AKME Projects Limited Corporate Debtor, Memorandum of Understanding dated 8th February 2011 between Spade Financial Services Private Limited and AKME Projects Limited, Agreement to Sale dated 18th May 2011 between AKME Projects Limited and Spade Financial Services Private Limited allegedly development project and Memorandum of Understanding dated 12th August 2011 between AKME Projects Limited and Spade Financial Services Private Limited, Memorandum dated 1st March 2012 between AKME Projects Limited and AAA Landmark Private Limited, Agreement to Sale dated 25th October 2012 executed by AAA Landmark Private Limited and AKME Projects Limited. Therefore we are of the considered opinion that Mr Anil Nanda, Mr Arun Anand had created a Web of Companies in which both along with the near and dear ones including Ms Renu Anand (Wife of Mr Arun Anand) and Mr Sonal Anand (Bother-in-law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mark Private Limited neither objected to not staked any claim against Yes Bank Limited, even when it proceeded against AKME Projects Limited to sell the project land, even though it is alleged that the appellants investments are purportedly linked to the said project. It is pertinent to mention that under the order of the Adjudicating Authority dated 13th May 2018, the IRP convened Committee of Creditors meeting on 1st June 2018 in which Mr Arun Anand and Ms Renu Anand (representing AAA Landmark Private Limited and Spade Financial Services Private Limited) were also present. It was during said CoC meeting, the respondent Phoenix came to know about the alleged claims of AAA Landmark Private Limited and Spade Financial Services Private Limited. On perusal of the documents, it became apparent to Phoenix that Spade Financial Services Private Limited and AAA Landmark Private Limited (Acting through Mr Arun Anand) and at the behest of Mr Arun Nanda) are related parties to the Corporate Debtor AKME Projects Limited. Accordingly, Phoenix ARC and Yes Bank filed their application before the Adjudicating Authority for the exclusion of Spade Financial Services Private Limited and AAA Landmark ..... X X X X Extracts X X X X X X X X Extracts X X X X
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