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TMI Blog2024 (2) TMI 1471X X X X Extracts X X X X X X X X Extracts X X X X ..... rding the collusion. The power under Section 65 of the Code can be exercised by the Adjudicating Authority only after satisfying that grounds as mentioned exist, if the Adjudicating Authority come to the conclusion that insolvency proceedings have been initiated fraudulently or with malicious intent for any other purpose other than for the resolution of insolvency of the Corporate Debtor, it can impose penalty as provided in the provision. While exercising jurisdiction under Section 65, the Adjudicating Authority is also fully entitled to close CIRP process and pass all consequential order. The mere fact that Section 7 Application has been admitted does not denude the jurisdiction of the Adjudicating Authority to examine the application under Section 65 of the Code. The observations of the Adjudicating Authority are that the Appellant is opposing the admission of the proceeding which admission has been affirmed by the Appellate Tribunal. The above does not denude the jurisdiction of the Adjudicating Authority to examine the allegations made in the Section 65 Application even after admission of the proceedings under Section 7. Locus of appellant - HELD THAT:- Appellant in the Applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was issued on 01.12.2011 by GGPPL. II. A Corporate Insolvency Resolution Process commenced against a group company namely M/s Vistar Construction Private Limited by Order dated 05.08.2022 in an application filed by the Pragati Impex India Private Limited. The ex-director of the Corporate Debtor challenged the Order of CIRP which order was upheld by this Tribunal by Judgment and Order dated 06th January, 2023 in C.A.(AT) Ins. No. 1431 of 2022. III. Appellant claiming to be home-buyer in a sister company of the Corporate Debtor filed an application being I.A. No. 4654 of 2023 praying for following reliefs: a. Pass an order allowing the Applicant to intervene in the captioned matter i.e. C.P. (IB) 662 of 2022; b. Pass an order to take on record and consider the facts and documents mentioned by the present Application, while adjudicating over the captioned matter i.e. C.P. (IB) 662 of 2022 and I.A. bearing number 3636 of 2023 filed in the captioned matter; c. Pass an order dismissing the captioned matter i.e. C.P. (IB) 662 of 2022 and I.A. bearing number 3636 of 2023, filed in the captioned matter; d. Pass an order imposing heavy penalty, under Section 65 of the Code, upon the Financia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the Applicant had no direct transaction with the CD viz. Vistar Construction Pvt. Ltd. According to the Ld. Counsel for the Applicant, M/s Granite Gate Properties Pvt. Ltd. had Some transaction with the FC/CD qua the IB- 662/ND/2021. The transaction of the Applicant qua M/s Granite Gate Properties Pvt. Ltd. does not give her any locus to oppose or question the order of admitting the IB- 662/ND/2021, more so, when the admission has been affirmed by the Hon ble NCLAT. In our considered view, the application is not maintainable. Accordingly, the same is rejected. 4. We have heard Mr. Gaurav Mitra, Learned Counsel appearing for the Appellant, Mr. Abhijeet Sinha, Learned Counsel appearing for the Financial Creditor and Mr. Pankaj Agarwal, Learned Counsel appearing for Resolution Professional. 5. Affidavit has been filed by the Respondent No. 1 and 2 in the Appeal, Rejoinder to which has also been filed by the Appellant. 6. Mr. Gaurav Mitra, Learned Counsel appearing for the Appellant submits that the entire proceeding initiated by the Financial Creditor against the Corporate Debtor for financial debt of Rs. 1,75,81,442/- is non-existent debt. It is submitted that there is transa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rporate Debtor. It is submitted that the Corporate Debtor is group company of Three C Groups which has indulged in siphoning off fund to its group companies defrauding home-buyers including the Appellant. Appellant has filed several proceedings against its group companies of Three C Company for protection of his rights. 7. Mr. Abhijeet Sinha, Learned Counsel appearing for the Financial Creditor refuting the submissions of Appellant contends that Appellant has no locus to file the application since he has no direct transaction with the Corporate Debtor. His transaction with a group company namely GGPPL cannot be reason to file any application in CIRP of the Corporate Debtor where Appellant has no concern. It is submitted that the Financial Creditor and Corporate Debtor entered into loan agreement dated 31st May, 2018 and it was resolved to advance an amount of Rs. 1,76,00,000/- to the Corporate Debtor by the Financial Creditor. The Appellant is selectively referring to four entries of 2nd June, 2018 whereas there are several transactions between the Corporate Debtor and the Financial Creditor. Several amounts were transferred by the Corporate Debtor to the Group Company of the Finan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Creditor ), as well as the Corporate Debtor and order an enquiry, through Insolvency and Bankruptcy Board of India ( IBBI ), upon the Ld. Resolution Professional, regarding the ex-facie illegal and fraudulent collusion between the Financial Creditor and the Corporate Debtor, proactively furthered and perpetuated by the Ld. RP. 7. The fact is that the present CIRP proceedings are nothing, but a jointly premeditated, intentional and dishonest fraud being played upon this Hon ble Tribunal, by the parties to it (the alleged Financial Creditor and the alleged Corporate Debtor), for their wrongful personal gains. Significantly, the parties to the captioned petition, in collusion and connivance with each other, have shown an ex-facie fictitious financial transaction (in fact a criminal act of money laundering) to be an alleged debt and default and fraudulently pushed the corporate debtor in CIRP. In this regard, it is relevant to mention that the parties have intentionally and dishonestly concealed and suppressed from this Hon ble Tribunal that the alleged unpaid financial debt claimed in the captioned petition, is nothing but a circular, fraudulent and criminal round tripping of funds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hed the Respondent No.1, seeking financial assistance, in the month of April-May, 2018, following which, the Respondent No.1, had sanctioned a loan to the Corporate Debtor to the tune of INR 1,76,00,000/- out of which, after deducting some expenses, INR 1,75,81,442/- (One Crore Seventy Five Lakhs Eighty One Thousand Four Hundred Forty Two), were advanced as loan to the Corporate Debtor on 02.06.2018. The following glaring facts would go to prove that the afore stated transaction, was just a small part of the much larger siphoning off funds, their criminal round tripping and misappropriation; which has been jointly, intentionally and dishonestly, portrayed in the nature of an unpaid financial debt, to intentionally push the Corporate Debtor under CIRP, for achieving joint hidden nefarious agendas, as briefly mentioned hereinbelow:- 20. The irrefutable fact that the said amount of INR 1,75,81,442/-, did not stay in the said Bank Account of the Corporate Debtor even for a day and was sent back to the associate company of the Respondent No.1 on the very same day, proves beyond an iota of doubt that per se there was never any financial debt as such and therefore the captioned company pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry, 2023. But when we look into the prayers made in application, Appellant has not prayed for recall of the admission order rather the prayer was that Company Petition be dismissed and penalty be imposed under Section 65 and further to conduct enquiries regarding the collusion. Section 65 of the Code provides as follows: Section 65: Fraudulent or malicious initiation of proceedings.- (1) If, any person initiates the insolvency resolution process or liquidation proceedings fraudulently or with malicious intent for any purpose other than for the resolution of insolvency, or liquidation, as the case may be, the Adjudicating Authority may impose upon such person a penalty which shall not be less than one lakh rupees, but may extend to one crore rupees. (2) If, any person initiates voluntary liquidation proceedings with the intent to defraud any person, the Adjudicating Authority may impose upon such person a penalty which shall not be less than one lakh rupees but may extend to one crore rupees. (3) If any person initiates the pre-packaged insolvency resolution process (a) fraudulently or with malicious intent for any purpose other than for the resolution of insolvency; or (b) with the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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