208 SEBI & Corporate Laws - Reports [Vol. 154
books
of
account
of
the
company
are
to
be
kept
at
the
registered
office
of
the^
company.
Therefore,
in
view
of
above,
the
Applicant
seeks
an
order
u/s
19
of
the
Code^
for
a
direction
for
the
promoters/directors
of
the
Corporate
Debtor
to
co-operate^
in
completion
of
Corporate
Insolvency
and
Resolution
Process,
(now^
liquidation)
process
of
the
Corporate
Debtor.The
Applicant
further
states
that
an
order
under
section
43
of
the
Code
is^
to
be
passed
because
some
undervalued
transactions
have
been
seen
as
per^
the
Forensic
Audit
Report
of
April,
2018.
It
is
mentioned
that
in
Unit
III
in^
Gujarat,
which
is
being
operated
by
Respondent
No.
2 ,
some
job
work
is
being^
undertaken
since
June
2015
for
the
benefit
of
an
associate
company
‘Vincitore^
Textiles
Pvt.
Ltd’
(R 7
Company),
in
which
son
of
Respondent
No.
2
is
a
Director
and
hence
a
related
party,
monies
of
which
were
not
routed
through^
the
bank
accounts
of
the
Corporate
Debtor
until
30 - 11 - 2017.It
is
submitted
that
all
entries
towards
job
sales
which
resulted
into
receiv
ables, -
amounting
to
Rs.
3 , 31 , 56 , 980 /-
have
been
eventually
adjusted
against
various^
fictitious
expense
entries.
The
Ledger
account
of
R 7
Company
reflects
the^
job
sales
done
in
their
favour,
however,
there
is
no
money
received
in
the^
bank
account
of
the
corporate
Debtor
from
the
sale
proceeds
of
such
transactions.^The
next
contention
of
the
Applicant
is
that
there
has
been
a
grave
fluctu
ation -
in
the
sales
and
other
relevant
figures
in
the
financials
of
the
Corporate
Debtor^
from
2015
onwards.
The
sales
turnover
has
reduced
from
Rs.
14 , 143. 90
Lakhs^
in
the
year
2015
to
Rs.
359. 04
Lakhs
in
the
year
2017.
Inventories
in
the^
year
2015
were
worth
Rs.
1490. 13
Lakhs,
however,
in
the
year
2017 ,
there
were^
no
inventories
in
the
company.It
is
further
submitted
in
support
of
this
contention
that
the
Corporate
Debtor^
suffered
a
loss
of
Rs.
635
Lakhs
during
the
financial
year
2014 - 15.
The
movement^
of
cash
balances
as
per
the
audited
balance
sheet
for
FY
2014 - 15 ,
FY^
2015 - 16
and
FY
2016 - 17
were
as
under:
FY
2014 - 15 :
Rs.
1 , 45 , 19 , 491 /-
FY
2015 - 16 :
Rs.
3 , 09 , 080 /-
FY
2016 - 17 :
Rs.
4 , 34 , 716 /-.
Therefore,
it
can
be
seen
that
Rs.
1 , 42 , 10 , 411 /-
have
been
wiped
off
from
the
Corporate^
Debtor’s
books
of
account
between
March
2015
and
March
2016 ,
with^
no
payments
being
made
to
the
lenders.It
is
contended
that
Rs.
135
Lakhs
was
paid
to
Respondent
No.
1
as
re
payment -
of
loan
preferred
over
secured
loans
obtained
from
banks
this
fact
is^
corroborated
in
the
ledger
account
of
Respondent
No.
1
as
reflected
in
the
books^
of
the
Corporate
Debtor.