IN THE NATIONAL COMPANY LAW TRIBUNAL,

DIVISION BENCH – II, CHENNAI

IA (IBC)/1034(CHE)/2022

in

MA/1399/2019

In

CP/1087/IB/2018

(Filed under Section 66 & 67 of IBC, 2016 read with Rule 11 of the NCLT Rules, 2016)

In the matter of M/s Sapphire Spinners India Private Limited

1. G.GUNASEKARAN

Liquidator

M/s Sapphire Spinners India Private Limited

36, Indu Nagar,

Vilankurichi Road, Vilankurichi Post,

Coimbatore-641 035 …Applicant/Liquidator

Vs

1.Karthika Raja

Suspended Director

396 Sudarsan Garden,

Kalangaperi Road, Rajapalayam,

Virudhunagar - 626 108

2. Ramachandra Raja

Suspended Director

396 Sudarsan Garden, Kalangaperi Road,

Rajapalayam, Virudhunagar - 626 108

3. Vinayak Cotton Agencies

133, Cotton Market, Rajapalayam - 622 117

Virudhunagar District

4. The Asset Reconstruction Company (India) Limited

Having Head Office at The Ruby,10th Floor, 29,

Senapati Bapat Marg Dadar -(West),

Mumbai - 400 028

Having Branch Office at

1G, 1st Floor, Century Palza, No.560-562, Anna Salai, Teynampet, Chennai- 600 018. … Respondents Order Pronounced on 21st March 2025 CORAM Shri. JYOTI KUMAR TRIPATHI, MEMBER (JUDICIAL)

Shri. RAVICHANDRAN RAMASAMY, MEMBER (TECHNICAL)

For Applicant : : G Gunasekaran For Respondents 1 &2 : K.S.Ravichandran, Advocate.

For Respon d e n t n o 3 : : G . A niruth Purusothaman,

ORDER

(Hearing Conducted through Hybrid mode)

Under Adjudication is an Application filed by the Applicant /

Liquidator under Section 66 of the Insolvency and Bankruptcy Code, 2016 seeking the following reliefs;

To order and direct the Respondent Nos.1 & 2 to make payment of an amount of Rs.7,04,77,742 (Rupees Seven Crore Four Lakhs Seventy-Seven Thousand Seven Hundred and Forty-Two) to the Corporate Debtor;

BRIEF FACTS OF THE CASE

2. It is stated that the Corporate Applicant viz. Sapphire Spinners India Private Limited was admitted to Corporate Insolvency Resolution Process (CIRP) under Section 9 of IBC, 2016, vide an order dated 25.01.2019 in CP/1087/IB/2018. Thereafter, this tribunal vide its order dated 19.12.2019 in MA/1399/2019 in CP/1087/IB/2018 ordered for Liquidation of the Corporate Debtor and appointed the Applicant herein as the Liquidator.

3. It is submitted by the liquidator that initially the audited balance sheet was available only upto 31.03.2016 and the forensic auditor report was made available as on 05.02.2022 hence there was delay in filing the application.

4. It is submitted by the liquidator that on the basis of th auditor report and other relevant document it is submitted that the following transaction fall under the ambit of section 66 of IBC, a) Transactions with D&K Import & Export P Ltd b) Sale of Vehicle - TN 67 AL 0100 c) Investment in Esstee Farms Private Limited d) Analysis of Transactions of Agri Trading Division\

e) Payment of wages

5. It is submitted that in Para 3.1(Page 3) of the Forensic Audit Report the Forensic Auditor has identified the Related Parties of the Corporate Debtor and noted that the Suspended Directors of the Corporate Debtor are the Shareholders of an entity viz. D&K Import& Export Private Ltd ("D&K") and that they are Related Party as per the definition in section 5(24) of the IBC, 2016.

6. It is submitted that there have been transactions of sale and purchase with entity D&K Import & Export and the Forensic Auditor and has observed that the Corporate Debtor has been prompt in making the payments to D&K but has failed to collect the amount which is due from D&K for the transactions between them. It is submitted that as per the Forensic Audit Report recovery proceedings are not initiated by the corporate debtor is resulting in defrauding the other creditors.

7. It is submitted that the suspended directors had claimed that the transactions were carried out during normal course of business at the prevailing market price and the same are disclosed in the tax returns, further it is submitted that the transactions are genuine in nature and there is no undue advantage to any of the Parties. However, the Forensic Auditor has concluded that the Susp