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TMI Blog2021 (1) TMI 1322X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Company. Therefore, the Bench is of the considered view that the R1 i.e Baiju Trading investment Private Limited who is the principal beneficiary of this fraudulent transaction has to return at least Rs. 41.03 crores into the account of Corporate Debtor Company. The Bench is also of the view that R2 and R3 are the suspended directors of the Corporate Debtor company and are covered under section 66 (2) of the IBC with respect to their misconduct which makes them liable to make such contribution to the assets of the Corporate Debtor company. The Bench concludes that it is clear from the above that R1 is fairly covered under provisions of section 66 (1) and R2 and R3 are covered under section 66(2)(a) and 66(2)(b) of the Code. Since, the R1 is the principal beneficiary of this transaction and has clearly admitted to the dues owned to the Corporate Debtor, the Bench directs that an amount of Rs. 41.03 crore be remitted back by R1 into the bank account of the Corporate Debtor company within 7 days from the pronouncement of this order. Application allowed. - Hon ble Suchitra Kanuparthi, Member (J) And Hon ble Chandra Bhan Singh, Member (T) For the Applicant : PCA Ayush J Rajani. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lance sheet of the Corporate Debtor, the Applicant finds out that the advances have been given to R1 and the amount has not been repaid by the R1. The table showing accounting entries entered between the Corporate Debtor and R1. Particulars Amount in Rs. Shri Bajju Trading and Investment Private Limited Note: The net balance technically reflects certain advance given to R1 41,03,00,000/- Total 41,03,00,000/- 8. The Applicant submits that R5 is the statutory auditor for both Corporate Debtor as well as R1 for the period FY 2017-18 and earlier years. 9. The Applicant also submits that several emails were sent by the Applicant to Respondent No.1 but there was no response by the R1. Subsequently, letter was sent by the RP on 27.02.2020 to R1 to submit ledgers of the Corporate Debtor as appearing in its books and confirm balances up to insolvency commencement date but R1 failed to provide any response. 10. The Applicant submits that these transactions comes under section 66 of the Code as a fraudulent or wrongful trading these transactions could not have been possible without assistance of R2 to R5. 11. The Applicant further submits that there is non-cooperation from the promoters/ dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... outsource person he has a limited scope and he has nothing to do with the operations of the business. The statutory auditor resigned from the position on 18.12.2019. 15. The Respondent No. 5 also filed its reply and submits that he was appointed as the statuary auditor for the financial years 2016-17 2017-18 by the Corporate Debtor and he audited the books of accounts for that period only. R5 mentions that he has not audited any financials for the year 2018-19 and period beyond that. The R5 mentions that he was appointed as the auditor of the R1 for financial year 2018-19, but the accounts for this period was not audited due to lockdown. R5 also mentions that he is an independent auditor and has nothing to do with the operations of the company. Findings: 16. I.A. 1125 of 2020 in C. P. No. 2556 of 2019 under section 66 of the Insolvency and Bankruptcy Code, 2016 has been filed by the Resolution Applicant mainly against the Respondent No. 1 M/s. Baiju Trading investment Private Limited and R2 and R3 who are suspended directors of Royal refinery private limited which is under CIRP vide order of this Bench dated 13.11.2019. The present application by the IRP/ RP has filed due to an ide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appearing in the books of accounts of i) Corporate Debtor collected from the DRI in May, 2019 where it shows as Rs. 41.24 crores, ii) ledger account produced by R1 where it shows the same amount as unpaid and iii) ledger account produced by R2 and R3 where the due amount is about Rs 41.03 crore but the same has been written off by making a write off entry and iv) balance sheet as submitted by the R2 and R3 (the suspended directors) as part of their reply in a separate IA No. 1212 of 2020 where R2 and R3 have disclosed that there is an outstanding balance from of R1 of Rs. 41.24 crore as receivable by the Corporate Debtor from. 22. In view of the above, the Bench does not have any doubt that the present case is fully covered under section 66 (1) with respect to conduct and liability of R1 to repay assets and benefits wrongfully received from Corporate Debtor company. The Bench would like to make a reference to the provision of section 66 of the IBC which is as under: 23. The R1 contended that there is no meeting of mind or mens-rea which is a prerequisite for filing and pursuing an application under section 66 of the IBC. However, the Bench is of the view that the code does not requ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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