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TMI Blog2021 (11) TMI 1034X X X X Extracts X X X X X X X X Extracts X X X X ..... ch notes that the Respondent Number 1 and 2 who are the suspended directors have raised baseless technical objection regarding choice of sampling method and sampling technique. It is clear to the Bench that they have no defense regarding their conduct in the whole matter wherein they had fraudulently taken out money from the Corporate Debtor s Bank account and had paid back same amount to the related parties of the alleged homebuyer. The Bench therefore notes that R7 has not provided any proper explanation regarding its collusion and being a party to the fraudulent transactions. Removal of R3 to R7 from CoC and also as financial Creditor/ Home- Buyer, as there is no debt own to them by the Corporate Debtor company and purported infusion of funds by each of these Respondent were returned back to them through their related parties (relatives) on the same day or the next day by Respondent Number 1 and 2 who are suspended directors of the Corporate Debtor company - these transactions of purported creditors are vitiated by fraud, therefore all these transactions are declared as null and void. Petition disposed off. - IA No. 107 of 2021 in CP (IB) 2995/MB/2019 - - - Dated:- 17 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... connivance with some of the home-buyers who are also Respondents i.e. Respondent Nos. 3 to 7 to this application thereby mis-leading the Applicant RP to believe these Respondents Nos. 3 to 7, home-buyers as financial creditors, while the transaction relating to amounts so invested by these Respondent Nos. 3 to 7 were reversed by the Respondent suspended Directors and repaid to the related parties of the Respondent Nos. 3 to 7 in to a different bank account. 6. Such doubtful acts of Respondents have led to creation of a Committee of Creditors of the present Corporate Debtor which includes Respondent homebuyers who cannot be considered as financial creditors in light of these facts and that the amount so invested by them was paid back to the account of the relatives of these Respondent Nos. 3 to 7 practically within 24 hours of the receipt into the account of the Corporate Debtor, routed through the personal account of the Respondent Nos. 1 and 2 (being suspended directors). The aggregate value of such transactions is ₹ 70 lacs. 7. The forensic auditors while going through the details and financial data especially the bank statement of Respondent Nos. 1 and 2 which was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wise prejudicial to the interests of other stakeholders including Respondent No. 9 i.e. SIDBI who is made a formal party to the present Application. REPLY FILLED BY THE RESPONDENT NO s 1, 2 7 - 11. The said transactions with Respondent Nos. 3 to 7 (home buyers) were in the ordinary course of business, untainted with any fraudulent intent and was done prior to the Insolvency Commencement date. Moreover, it is an undisputed fact that neither the Respondent Nos. 3 to 7 nor their alleged relatives are related to Respondent No. 1. 12. By way of purported application, the Respondents mentions that the Applicant is seeking reversal of the - 13.1 Amount of ₹ 40 lacs which was paid by the Corporate Debtor from its HDFC account to the Respondent no. 1 in his Personal Account- 13.1.1 In this regard it is submitted that the withdrawal of the said amount from the bank account of Corporate Debtor into the Respondent no. 1 personal account was towards the repayment of the unsecured loan provided to the Corporate Debtor by Respondent no. 1. 13.1.2 The Respondent further submitted that all the stipulations for the said takeover of the management under various documents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... through discreet enquiry and no specific evidence of the same is available. 15. The Respondent No. 1 and 2 mentions that the sampling methodology adopted by Forensic Auditors as provided at page no. 46 of the Forensic Audit Report has the following inherent limitations- a. Since choice of sampling method is a judgmental task, there exit chances of biasness as per the mindset of the person who choose the sample. b. Improper selection of sampling techniques may cause the whole process to defunct. c. Sampling may exclude some data that might not be homogenous to the data that are taken. This affects the level of accuracy in the results. 16. The Respondent No. 1 and 2 mention that the contents of the Forensic Audit Report hold no ground as there is no material or conclusive evidence on record to corroborate the aforementioned allegation. Similar allegations have been levied on respondent No. 3 to 6, and the Applicant has supported the same by annexing bank statement of Respondent No. 1. However, no statement of accounts has been annexed or relied upon by the Applicant while levying the said allegation against Respondent No. 7. Similarly, the forensic audit report, menti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent No. 3 d. Pallavi Girish Malani (one of the home buyer)- Respondent No. 4 e. Govind Malani (one of the home buyer)- Respondent No. 5 f. Madan Vallabhdas Devi (one of the home buyer)- Respondent No. 6 g. Mina Gopal Gokhale (one of the home buyer)- Respondent No. 7 h. Jitendra Kothari Authorised Representative (as a formal party)- Respondent No. 8 i. Small Industrial Development Bank of India (as a formal party)- Respondent No. 9 20. The Applicant /RP mentions that during the course of CIRP, a forensic auditor viz. Mazars Business Advisors Private Limited was appointed to undertake the forensic audit of the books of the Corporate Debtor for the period from 1st April 2014 to 24th June 2020. Further, the forensic auditor has filed its report on 14th January 2020 which provided sufficient reasons to come to a conclusion that Respondent(s) have undertaken certain transactions with intent to defraud the creditors and these transactions are adequately covered under section 66 of the Code. 21. The Bench notes that Respondent No. 1 and 2 are suspended directors who in connivance with the Respondent No. 3 to 7 entered into fraudulent transactions through home-bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his own personal account maintained with the Bank of Baroda. 26. Thereafter Respondent No. 1 transferred the said ₹ 10 lacs from his own personal account to one Mr Vishnu Gujrati HUF , an HUF created by husband of Respondent No. 3 i.e. Mrs. Bela Gujarati (one of the home buyer) where Respondent No. 3 is a coparcener of the said HUF. This whole process clearly shows that Respondent No. 3 who invested ₹ 10 lacs to become homebuyer and Financial Creditor of the Corporate Debtor received from Respondent No. 1 the total amount of ₹ 10 lacs on the same day. 27. The Bench notes that Respondent No. 1 to 3 had concealed the said fact of the circuitous transaction and Respondent No. 3 had filed claims with the RP as a home buyers and enjoyed the position as financial creditor based on this alleged financial debt. 28. The pictographical depiction of the circuitous transaction is represented as below- In the above graphical depiction, the arrow denotes money trail and the flow of funds amongst the parties. It clearly shows that the fraudulent transactions by Respondent No. 3 i.e. Bela Gujarati (one of the home buyer) ₹ 10 lacs has returned back to her ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 35. The Bench also notes that from amongst these alleged home buyers/Respondents only R7 (Meena Gokhale) has submitted a reply to this fraudulent application. The Bench note that the contention of R7 are feeble and baseless. R7 mentions that the allegations against them is devoid of any corroborative evidence and that no material of conclusive evidence has been put up against the aforesaid mentioned allegation. 36. The Bench therefore notes that R7 has not provided any proper explanation regarding its collusion and being a party to the fraudulent transactions. 37. In view of the above the Bench directs the following: a. Removal of R3 to R7 from CoC and also as financial Creditor/ Home- Buyer, as there is no debt own to them by the Corporate Debtor company and purported infusion of funds by each of these Respondent were returned back to them through their related parties (relatives) on the same day or the next day by Respondent Number 1 and 2 who are suspended directors of the Corporate Debtor company. b. These transactions of purported creditors are vitiated by fraud, therefore all these transactions are declared as null and void. c. The Resolution Professional (RP ..... X X X X Extracts X X X X X X X X Extracts X X X X
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