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TMI Blog2024 (5) TMI 999X X X X Extracts X X X X X X X X Extracts X X X X ..... as to defraud creditors of the Corporate Debtor, or for any fraudulent purpose, to make him liable to make such contribution to the assets of the Corporate Debtor as it may deem fit. A plain reading clearly shows that action can be taken against any person for recovery of amount involved in the fraudulent transaction. In the present case, there is a finding that Manoj Punamia was running several companies in its business of gold refinery. The finding of the Customs Department was that both the Appellant Company (RICL) and Corporate Debtor (RRPL) were being managed by Mr. Manoj Punamia. Mr. Manoj Punamia and his wife were said to be shareholders of the Appellant Company. In these circumstances, the appellant cannot be said to be a third party, as both RICL and RRPL are under the control of same person - This is a case where the outstanding of Appx. Rs. 158 Cr. was brought down to Rs. 31 Cr. by alleged entries so as to reduce the amount due to the Corporate Debtor thereby reducing likelihood of recovery, causing loss to the creditors of the Corporate Debtor. On similar facts, in the case of MR. NANDKISHORE VISHNUPANT DESHPANDE (RESOLUTION PROFESSIONAL FOR ROYAL REFINERY PVT. LTD. VE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e business of Trading in Bullion i.e. importing Gold and then exporting the same after performing manufacturing activity over the imported gold. The Corporate Debtor also engaged in sale/ purchase of gold in the local market. 3. In May 2019, RRPL and its associated concerns and persons were searched by the Department of Revenue Intelligence (hereinafter referred as DRI). It is stated that the business operations of the corporate debtor had virtually stopped since May 2019. After search by DRI, following findings were recorded by the Joint Commissioner of Customs in his order dated 04.02.2021:- I find from the investigation conducted by DRI and the statements of the Directors and employees of RRPL., that RRPL was a front company run by Shri Manoj kumar Babulal Punamiya. Shri Manoj kumar Babulal Punmaiya appears to have arranged finances for the company and recruited directors like Shri Vishal Harish Choudhary and Shri Gaurav Dilipraj Panwar. Both the directors acted under his instructions on front end and he was behind the curtain. Under the directions of Shri Manoj kumar Babulal Punamiya both the above directors had planned to import duty-free gold bars under Advance Authorisation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2019 onwards. 4.8 The AA held that as per the provisions of Section 66 recovery can be made from any person who had participated in the fraudulent transaction and had benefitted from it . 5. The appellant had filed an I.A. No. 2802 of 2021 seeking permission to file additional documents. The appellant was allowed to file the additional affidavit vide this Tribunal order dated 8.5.2023. 6.1 In its oral and written submissions, the appellant had submitted that the proceedings under Section 66 of IBC, 2016 are not maintainable against the appellant as the Resolution Professional has not given clear opinion or determination or finding as required under Regulation 35 A. It was submitted that the RP has not brought out any supporting documentary evidence to show that the transaction between the appellant and the corporate debtor are fraudulent in nature. It was further submitted that no men-rea was established in the application in question. It was submitted that Resolution Professional s case was based only on unaudited accounts statements seized by the DRI Authorities in a raid conducted only upon the corporate debtor. 6.2 The learned counsel for the appellant relied upon the judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,07,56,469/- as on 20.05.2019 but it is the Appellant s case that transaction with Corporate Debtor after May, 2019 till the commencement of CIRP has reduced the outstanding amount to Rs. 31,01,83,022/-. It was submitted by the RP that entries made in the books of accounts were clearly fraudulent and the amount due to Corporate Debtor was brought down through these entries from Rs. 158 crores to Rs. 31 Crores. 7.2 The Resolution Professional further submitted that no stock of gold bullion had been found in the premises of Corporate Debtor in May, 2019 during raids by DRI and that no physical inventory was found in the premises of Corporate Debtor on taking over by Resolution Professional in November, 2019. It was submitted by Resolution Professional that sudden change in nature of transaction between the Corporate Debtor and Appellant was for the purpose of reducing the total outstanding dues owed to the Corporate Debtor. 7.3 It was further submitted by Resolution Professional that according to the penalty order issued by the Customs Department, Corporate Debtor was front Company of one Mr. Manoj Punamia, who is one of the promotors of the Appellant Company. The Resolution Professi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rma, Ms. Madhusa Inda and Shri Nitin Gujral and he is and his wife were shareholder of 18.3% and 12.66% of RICL. He admitted that Directors of RICL work as per his instructions. 7.7 It was further submitted by Respondent No. 1 that the Resolution Professional complied with all the requirements of Regulation 35-A of the CIRP Regulation and in the first CoC meeting he had informed the CoC that the business of Corporate Debtor is not supported from the available physical inventory. The Resolution Professional had sent several e-mails to the Appellant asking for details regarding transactions and obtained the seized records of Corporate Debtor from DRI, on analysis of which he made clear determination regarding fraudulent activities and decided to initiate proceeding under Section 66 of IBC against the Appellant. 7.8 The Resolution Professional further submitted that remedy under Section 66 of IBC is also available against third parties and cited the decisions in the case of Tridhaatu Kirti Developers LLP vs. Arihant Nenawati Liquidator of Royal Refinery Pvt. Ltd., 2023 SCC OnLine NCLAT 1583 in his support. 7.9 The Resolution Professional further submitted that the appellant s reliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to refer to the provisions of Section 66(1) of IBC, 2016 which is reproduced below:- 66. (1) If during the corporate insolvency resolution process or a liquidation process, it is found that any business of the corporate debtor has been carried on with intent to defraud creditors of the corporate debtor or for any fraudulent purpose, the Adjudicating Authority may on the application of the resolution professional pass an order that any persons who were knowingly parties to the carrying on of the business in such manner shall be liable to make such contributions to the assets of the corporate debtor as it may deem fit. As per provisions of sub-section (1), the Adjudicating Authority can pass an order directing any person , who was party to carrying on the business of Corporate Debtor in such manner as to defraud creditors of the Corporate Debtor, or for any fraudulent purpose, to make him liable to make such contribution to the assets of the Corporate Debtor as it may deem fit. A plain reading clearly shows that action can be taken against any person for recovery of amount involved in the fraudulent transaction. 10.3 The Appellant had relied on the judgment of the Hon ble Supreme Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of some other organization be roped in, and his or her assets be attached. This being the case, we set aside the impugned order passed by the NCLAT as well as the NCLT. The appeal is allowed in the aforesaid terms. 10.5 The facts of the present case are different and distinguishable from the cases cited by the Appellant. In the present case, there is a finding that Manoj Punamia was running several companies in its business of gold refinery. The finding of the Customs Department was that both the Appellant Company (RICL) and Corporate Debtor (RRPL) were being managed by Mr. Manoj Punamia. Mr. Manoj Punamia and his wife were said to be shareholders of the Appellant Company. In these circumstances, the appellant cannot be said to be a third party, as both RICL and RRPL are under the control of same person. During, the search action by DRI, documents/accounts were found which reflected that the Appellant owed Rs. 1,58,07,56,469/- to the Corporate Debtor. We have also noted that the corporate debtor was virtually closed since May, 2019. The Appellant has not challenged the outstanding shown as on 20.05.2019 of Rs. 158,07,56,469/-. However, through entries, showing sale of gold to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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