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TMI Blog2025 (3) TMI 437X X X X Extracts X X X X X X X X Extracts X X X X ..... prefer this appeal, was as to the consequence of passing of an order on IA No. 482/2020, which was preferred by Respondent No.1, invoking Section 43 of I & B Code, 2016, contending thereof that two transactions, which is apparent from the draft Forensic Audit report of 09.11.2020 amounting to Rs.81.33 lakhs and Rs.78.81 lakhs, were ultimately found to be preferential and fraudulent transaction respectively. Upon establishment of the said fact the Impugned Order dated 02.02.2022 was passed by the learned NCLT, Bengaluru, in Company Petition (IB) No. 320/BB/2019, wherein while allowing the IA No.482/2020 the learned Adjudicating Authority had directed the Appellant No. 1 to restore an amount of Rs.24,29,874/- (Rupees Twenty Four Lakh Twenty Nine Thousand and Eight Hundred and Seventy Four) Appellant No. 2 to restore Rs. 25,53,233/- (Rupees Twenty Five Lakh Fifty Three Thousand and Two hundred and Thirty Three) and Appellant No. 3 to restore Rs.11,50,000/- (Rupees Eleven Lakh and Fifty Thousand) which were found to be classified as preferential transactions, and since being hit by the provisions contained under Section 43 of the I & B Code, 2016. The said directions of Ld. Adjudicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pment India Private Limited, are said to have availed financial assistance from M/s. Sir. M. Vishveshwaraya Co-operative Bank Limited (hereinafter to be called as a Financial Creditor). At the stage when the financial assistance was extended on 17.10.2016, Appellant No. 1 and Appellant No. 2 were the Directors of the Corporate Debtor, and Appellant No. 3 had the status of being that of wife of Appellant No.2. In the proceedings of CIRP, stood initiated against the CD, factually it had come up that, the Financial Creditor had extended a financial assistance of Rs.14,80,00,000 (Rupees Fourteen Crore and Eighty Lakhs) by virtue of a loan agreement which was executed on 17.10.2016, and under the terms of the loan agreement, the said financial assistance was extended for the purposes to facilitate the Corporate Debtor to augment and expand the business of manufacturing, designing, assembly & import and to generally deal with all kind of machinery, equipment, tools, moulds and automation products for all kind of users, and also to act as a consultant and as a manufacturer of cranes. 5. For the purposes of taking the financial assistance under the loan agreement of 17.10.2016, the Corpor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ach of loan agreement in remittance of the debt taken by them. 9. As a consequence of the aforesaid fact, the company was placed to face the CIRP Proceedings under Section 7 of I & B Code, 2016, initiated by the Financial Creditor and was ultimately admitted to the CIRP Proceedings by an order passed by the learned Adjudicating Authority on 29.10.2019. By the same order passed, on the same date, the learned Adjudicating Authority had appointed the Respondent herein, as to be an Interim Resolution Professional (IRP), in order to carry out the Resolution Process in respect of the Corporate Debtor, and while undertaking the said process and invitation of claims was made by the Respondent. The Respondent contends that, he had received a total claim due to be paid by the Corporate Debtor as to be Rs.15,00,09,200 (Rupees Fifteen Crore Nine thousand and Two Hundred). 10. The Respondent had come up with the case before the learned Adjudicating Authority that, on receipt of the aforesaid claim, the Committee of Creditors(CoC) asked the Respondent to examine the details of the transactions, of the Corporate Debtor to find out whether there has had been any preferential transaction falling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Financial Statements and Books of Accounts of the Corporate Debtor, and also based on the oral submissions and statement made by the management. The preferential transactions which were thus identified in the forensic report, were referred to in the document, which was annexed with the Forensic Audit Report, which contains the details of the transactions, as it was assessed to be for an amount of Rs.24,29,874 (Rupees Twenty Four Lakh Twenty Nine Thousand and Eight Hundred and Seventy Four). It is that during the course of the proceedings, while the learned Adjudicating Authority was considering the propriety of the allegations leveled in IA No. 482/2020, if had recorded the statements and objections, which were filed by the Appellant No. 1 & 2 and upon considering the aforesaid statement and objections, along with the additional affidavits and the reply of the 3rd Appellant, which was filed on 23.03.2021. After considering all these facts, the learned Adjudicating Authority by the Impugned Order of 02.02.2022 had proceeded to declare that some of the transactions, which were made in flagrant violation amount to be a preferential transaction under Section 43 of the I & B Code, 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed was deliberated upon in the meeting of CoC on 09.11.2020 and based on such, IA was filed before the Ld. Adjudicating Authority for grant of reliefs as stated above. 15. The Ld. Adjudicating Authority after considering such audit report, giving ample opportunity to the Respondent to refute the report, after recording the statement of Mr. C M Nagaraj, one of the Suspended Directors of the company, the Appellant No. 2 herein, who had questioned the credibility of the Forensic Audit Report of 09.11.2020, after referring to the relevant portion of the said forensic report, which held certain transactions as to be the preferential transactions the details of which has been discussed in Para 7 of the Impugned order, after considering the statement and the stand taken by the Respondent/Liquidator who had submitted that the Appellant No. 1 & 2 have not re-paid the amount of Rs.49.83 lakhs, has concluded that classified the said amount is to be held as to be the preferential transaction made by the Corporate Debtor. Further, the learned Adjudicating Authority after considering the evidence on record, the stand of Appellant No.1 & 2 herein on the credibility of the Forensic Audit in view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly the Forensic Audit Report of 09.11.2020 and the additional Forensic Audit Report of 03.11.2021. 16. The question of law which the learned counsel for the Appellants has attempted to argue before this Appellate Tribunal was from a very limited perspective, that, whether the learned Adjudicating Authority could have at all allowed the application under Section 43, without considering the objections filed by the Appellant and secondly, whether in the absence of the material particulars being placed before the learned Adjudicating Authority, it should have gone ahead to hold conclusively that the transactions were preferential transactions under Section 43 of the I & B Code. In fact, both the substantial questions, which have been pressed upon by the Appellant runs contrary to the finding, recorded by the learned Adjudicating Authority, who did consider the inferences drawn from the Forensic Audit Report and additional Forensic Audit Report, about the two transactions which were identified and found to be a preferential transactions and fraudulent transaction and they were established to have not been conducted during the normal course of business, which could not be prove to the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certain exception have been provided. 18. The transactions, which have been detailed and determined by the Forensic Auditors in their report do not fall to be nor it was established to be falling under the exceptions as contemplated under Section 43(3) of I & B Code, 2016, and even on bare perusal of the observations, made in Para 7 of the Impugned Order under challenge, it can be seen that the Appellant has not even endeavoured to establish the defence he has mounted that it was a transaction made in normal course of business and that it would be falling under the exceptions contemplated under Section 43(3) of the I & B Code, 2016. The Appellant cannot take the advantage of his own wrong by his failure to discharge his responsibilities as statutorily envisaged under Section 101 of the Evidence Act. Since the Impugned Order is based upon a sound logical reasoning upon considering the statement and evidences on record, the observations made therein does not suffer from any perversity or misappreciation of evidence by the learned Adjudicating Authority which would call for any interference. Hence, the Company Appeal (AT) (CH) (Ins) No.184/2022 lacks merit and the same is according ..... X X X X Extracts X X X X X X X X Extracts X X X X
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