204 SEBI & Corporate Laws - Reports [Vol. 154
to be fraudulent or preferential in nature and, therefore, he filed application for
direction to respondent directors/promoters to pay sums in respect of benefits
received by them from corporate debtor - Whether since transactions of giving
money to various lenders, inflated book debts and stock statements, fraudulent
transactions with related parties and fictitious sales to third party were not made
in ordinary course of business and satisfied criteria of section 43 to be labelled as
preferential transactions, respondents were directed to return sums siphoned off
and to revert back an equal amount of benefits received by them from corporate
debtor - Held, yes [Paras 36 & 37]
FACTS
n
The
corporate
insolvency
resolution
process
of
the
corporate
debtor
com
menced, -
pursuant
to
admission
of
section
7
application
filed
by
a
financial
creditor^
State
Bank
of
India.
The
corporate
debtor
could
not
be
revived
because^
the
COC
had
not
approved
the
Resolution
Plan
submitted
for
due
approval^
of
CoC,
therefore,
liquidation
order
was
passed.
Consequently,
‘AN’^
was
appointed
as
the
liquidator.n
The
liquidator/applicant
filed
application
praying
that
the
persons
concerned
be^
directed
to
pay
sums
in
respect
of
benefits
received
by
them
from
the
corporate^
debtor.n
During
the
course
of
corporate
be
directed
insolvency
resolution
process,
the^
RP
noticed
certain
transactions
which
appeared
to
be
fraudulent
or
pref
erential -
in
nature,
therefore,
instant
application
was
filed
by
the
RP
during
the^
period
of
corporate
insolvency
resolution
process.
The
company
could
not^
be
revived,
therefore,
liquidation
order
was
passed
for
the
corporate
debtor^
and
the
liquidator
was
appointed.n
The
applicant
sought
an
order
under
section
19
for
a
direction
for
the
pro
moters/directors -
of
the
corporate
debtor
to
co-operate
in
completion
of
corporate^
insolvency
and
resolution
process,
(now
liquidation)
process
of
the^
corporate
debtor.n
The
applicant
further
stated
that
an
order
under
section
43
was
to
be
passed
because^
some
undervalued
transactions
had
been
seen
as
per
the
Forensic
Audit^
Report
of
April,
2018.n
Also,
it
was
argued
that
an
amount
of
Rs.
132. 51
lakhs
taken
from
various
lenders^
had
been
credited
to
the
account
of
respondent.n
Therefore,
the
Applicant
prayed
for
recovery
of
Rs.
135
lakhs
being
pref
erential -
transaction
with
respondent,
the
same
was
to
be
vested
into
the
corporate^
debtor.n
The
applicant
further
stated
that
only
partial
stock
of
raw
material
was
destroyed^
by
fire,
while
the
auditor
without
any
verification
had
relied
on
the^
management’s
information
and
written
on
the
entire
stock/inventory
worth^
Rs.
1 , 141
lakhs
as
loss
by
fire,
whilst
the
final
assessed
loss
as
per
the