Under Section 43 of Insolvency &

Bankruptcy Code, 2016 Mr. Devarajan Raman

The Resolution Professional

…Applicant

Vs.

Mr. Praful N Satra & others

…Respondents

C.P.(IB) No. 1632/MB/2019

Vistra ITCL (India) Limited

Financial Creditor

Vs.

Satra Properties India Limited

Corporate Debtor

Order delivered on: 25.04.2024

Coram:

Shri Prabhat Kumar Justice V.G. Bisht (Retd.) Hon’ble Member (Technical) Hon’ble Member (Judicial)

Appearances:

For the Applicant : Mr. Pulkit Sharma, Advocate

CP (IB) 1632 OF 2019 For the Respondent : Mr. Rohit Gupta, Advocate

ORDER

Per: Prabhat Kumar, Member (Technical)

1. This Application IA 589/2022 is filed under Section 43 of the Insolvency & Bankruptcy Code, 2016 (“Code”) read with Rule 11 of the NCLT Rules, 2016 by Mr. Devarajan Raman, Resolution Professional (“Applicant”) in the Corporate Insolvency Resolution Process (“CIRP”) of M/s Satra Properties (India) Limited (“Corporate Debtor” or “CD”), to seeking following reliefs:

a. That this Tribunal may be pleased to declare transaction in Para 9 to

11 as Preferential in terms of S.43 I & B Code, 2016;

b. That this Tribunal may be pleased to direct the Respondents to contribute towards loss caused to the Corporate Debtor in terms of S.44(d) of I & B code, 2016;

c. That this Tribunal may decide whether the nature of transaction in Para Nos. 7 and 8 is Preferential;

d. Any other Order or direction that this Hon'ble Court may deem fit &

proper.

2. The Corporate Debtor (CD) was admitted to Corporate Insolvency Resolution Process (CIRP) by virtue of Order dated 03.08.2020 in Company Petition No. 1632 of 2019. The Applicant was appointed as Interim Resolution Professional (IRP) by NCLT and later confirmed as Resolution Professional (RP) by COC in 1 ^st COC Meeting.

2.1. The Respondent No. 1 was the Managing Director of Corporate Debtor.

Respondent Nos.2 to 5 were the Directors of Corporate Debtor. The Applicant after perusal of the records of the CD formed an opinion on CP (IB) 1632 OF 2019 the existence of avoidance transaction in the books of the CD. The CD being a listed company with a history of sale of subsidiaries in the last 5 to 10 years it was decided to conduct a Forensic Audit for ten years. Accordingly, a mandate was given to BDO India LLP on 15.02.2021. There were serious challenges in getting the information and document due to the non-cooperation of the Directors of the CD. The Forensic Auditor (FA) and the RP team searched the available records and based on the available records from various sources with great difficulty, the report was completed by the FA. The pandemic posed its own challenges in the process. However, Stamped and Signed Copy was received only on 31.01.2022.

2.2. The Unsigned Forensic Audit report (FAR) was submitted on

15.11.2021. The report, without the conclusions of the FA, was sent to the Suspended Directors of the CD by e-mail for their comments and clarifications/ explanations on 16.11.2021 and reminder was sent on 23.11.2021. Many telephonic reminders were also made to the Respondent No. 1. However, till date there is no response from the Suspended Directors of the Corporate Debtor.

2.3. The FAR has identified Preferential Transactions U/s.43, Undervalued Transactions U/s.45, Fraudulent Transactions U/s.66 and other suspicious transactions under the Code. This Application details the Preferential Transactions that have been identified.

2.4. The FA in para 5.1 of the report has classified the payment made to Praful N Satra, Managing Director of the CD, a related party, an amount ofRs.0.18 Crores during the look back period for which there is no documentation or details are available. Hence, it is classified as a related party transaction requiring appropriate directions of the Hon'ble Tribunal under section 44 of the Code.

2.5. In para 5.1 of the FAR an amount of Rs. 1.05 Crores were repaid to non related parties Anupam Stock Broking P Ltd and Divyagyan Trading CP (IB) 1632 OF 2019 P Ltd., within the look back period, has been indicated. There are no suppo