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TMI Blog2021 (9) TMI 928X X X X Extracts X X X X X X X X Extracts X X X X ..... ected. Squaring off Receivables against Debt - HELD THAT:- The entries were made by the Appellant who was functioning as Chief Executive Officer which was admittedly done on 31st March, 2018 which was after filing of the Application under Section 7 of IBC on 6th March, 2018. He has squared off what he had to receive against what was to be received by the Corporate Debtor from the three entities referred. What is the deal/understanding between him and the three entities is within the knowledge of the Appellant - On record fact remains that there is transfer of interest of the Corporate Debtor (which was to receive the amounts from the three entities) for the benefit of the Appellant Chief Executive Officer of Corporate Debtor who had to receive back unsecured loan given to Corporate Debtor, and this would put to detriment the other creditors of the Corporate Debtor - the Appellant was hit by Section 43 of IBC. Sale of Car in Moratorium - HELD THAT:- The Appellant is guilty not only with regard to the contravening moratorium and liable for action under Section 74 of IBC but is also liable for misconduct in course of CIRP under section 70 of IBC. It appears that the Resoluti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, 2019. The Appellant was removed from acting as Chief Executive Officer on 14th November, 2019 in the 10thCoC Meeting. The Appeal refers to other disputes with which the present Appeal is not concerned. 3. On 24th July, 2020, Resolution Professional filed I.A. No. 1108 of 2020 (Annexure A-3, Page 49 of the Appeal) raising two issues: (i) The Appellant-Pandurang Ramchandra Shinde has sold a car -Hundai Sonata, MH-12 AK-760 on 31st December, 2018 which is after initiation of CIRP on 18th December, 2018 as can be seen from the Tax Invoice dated 31 st December, 2018 (Invoice at Page 79 read with Ledger Account Page 80) at an undervalue without permission of the Resolution Professional. (ii) The Appellant-Pandurang Ramchandra Shinde had earlier extended unsecured loan to the Corporate Debtor of ₹ 1,14,91,955/-. Also, earlier the Corporate Debtor had provided certain goods/Services to three entities (a)Meltek Infosystems Pvt. Ltd. (b) Micros M Technichems Pvt. Ltd. and (c) Maharashtra Shetkari Sugar and the Corporate Debtor had to receive outstanding amounts from these three entities as on 1st April, 2017. Now, the Appellant on 31st March 2018 (that is after filing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted by them and we have observed that the approach of the Respondent is very lenient towards the proceedings before us. Even though there was opportunity given to him to file reply, however, he has chosen not to file a complete reply to this application and only dealt with the contents of this application in a single paragraph not raising any points in his defence. Therefore, basing on the documents submitted by the RP, we are deciding this application. 5. The Adjudicating Authority then in Paragraph 9 of the Impugned Order referred to Judgment in the Matter of Anuj Jain Interim Resolution Professional for Jaypee Infratech Ltd. Vs. Axis Bank Ltd. (Civil Appeal Nos. 8512-8527 of 2019) and contents of Paragraphs 18.1, 18.2, 18.4 and 19.5 in the context of Section 43 and findings and order recorded in Paragraphs 10 to 14 are as follows: 10. In this matter also the ingredients of Section 43 are being fulfilled and does not fall within the exceptions of the provision. The transactions are made in favour of the related party i.e. the director of the Corporate Debtor who is also the respondent herein. Therefore, there remains not doubt that the transactions were preferen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount with the receivables of the Corporate Debtor. The Appellant was thus called upon to comply the order by depositing the amount of ₹ 1,05,41,964/-. Principles of Natural Justice 6. Now the Appellant in the Appeal has claimed and it is argued by him that while passing the Impugned Order there had been violation of Principles of Natural Justice. Appellant claims that he did not get opportunity of being heard. According to him he had filed a Reply which was not considered and that the Adjudicating Authority wrongly marked presence of Mr. Navin Arora, Advocate as the Advocate appearing for the Appellant in the I.A. No. 1108 of 2020. According to him all the pending applications in the company petition were listed on single date which caused confusion. Appellant claims that Mr. Navin Arora, Advocate /AA Associates was representing the Appellant in M.A. No. 3239 of 2020 which was filed by the Appellant for removal of the Resolution Professional whereas another Advocate Mr. Narendra Kumar Sharma was representing the Appellant in I.A. No. 1108 of 2020. Appellant claims that on the date of the final disposal Mr. Narendra Kumar Sharma, Advocate did not get Video Conferenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. The ground that Principles of Natural Justice were violated is rejected. Squaring off Receivables against Debt. 9. Coming to the issue relating to the squaring off, in the I.A. No. 1108 of 2020 the Resolution Professional referred to documents filed with the I.A. No. 1108 of 2020. Copies of the documents from the ledger accounts /general vouchers of the Corporate Debtor are at Page 109 to 114. These documents reflect the facts regarding the undisputed unsecured loan given by the Appellant to the Corporate Debtor and the dues relating to Meltek Infosystems Pvt. Ltd., Micros M Technochems Pvt. Ltd. and Maharashtra Shetkari Sugars. These documents were marked as Annexure-F with the I.A. 1108 of 2020. The Resolution Professional has with the Reply Diary No. 26139 filed Annexure A-9 audit report of the Corporate Debtor. The Document at Annexure 9 Page 53 of Reply relates to Audit for the period of 2017-18. The Auditor recorded opinion and mentioned in f (Reply Page 56) as under: f) Company has written off receivables from debtors and adjusted same amount against unsecured loan taken from Mr. Pandurang Shinde as follows: 1. Meltek Infosystems Pv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case may be, is of the opinion that the corporate debtor has at a relevant time given a preference in such transactions and in such manner as laid down in sub-section (2) to any persons as referred to in sub-section (4), he shall apply to the Adjudicating Authority for avoidance of preferential transactions and for, one or more of the orders referred to in section 44. (2) A corporate debtor shall be deemed to have given a preference, if- (a) there is a transfer of property or an interest thereof of the corporate debtor for the benefit of a creditor or a surety or a guarantor for or on account of an antecedent financial debt or operational debt or other liabilities owed by the corporate debtor; and (b) the transfer under clause (a) has the effect of putting such creditor or a surety or a guarantor in a beneficial position than it would have been in the event of a distribution of assets being made in accordance with section 53. (4) A preference shall be deemed to be given at a relevant time, if- (a) it is given to a related party (other than by reason only of being an employee), during the period of two years preceding the insolvency commencement date; or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, 2018. The Appellant referred to this tax invoice filed by the Resolution Professional states that the sale proceeds amounting to ₹ 50,000/- came directly to the account of the Corporate Debtor is apparent from the tax invoice. The Appellant is arguing that the Adjudicating Authority did not give finding with regard to the sale price of the car and the Resolution Professional asking for ₹ 13,85,277/- towards sale price of the car was unreasonable. The Appellant claims that the audited balance sheet of the year 2018 shows depreciation of ₹ 12,75,724 as on 31st December, 2018 leaving the book value of the car at ₹ 1,51,926/-. Although the Appellant has referred to only Page 7 of the written-submissions of the Resolution Professional, we find from the copy of the RC (Page 6 of the written-submissions diary no. 27727) that the Car stood in the name of the Corporate Debtor. In fact, the document at page 4 Motor Sale and Delivery Receipt filed by the Resolution professional which is in Marathi shows that the car was sold to one Mr. Ravindra Yadav and the transaction was actually for an amount of ₹ 75,000/- of which 25,000 were received as advance and &# ..... X X X X Extracts X X X X X X X X Extracts X X X X
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