IA No. 1895/MB/C-I/2022

In

C.P (IB) No.2498/MB/C-I/2018

An application under Section 66(1) of the Insolvency and Bankruptcy

Code, 2016

Filed by

Mr. Udayraj Patwardhan

Liquidator of

Valecha LM Toll Private Limited

…Applicant

Versus

Dinesh Hariram Valecha and Ors.

…Respondents In the matter of

Axis Bank Limited

…Financial Creditor

Versus

Valecha LM Toll Private Limited

… Corporate Debtor

Order Pronounced on: 26.04.2024

Coram:

Hon’ble Member (Judicial) : Justice V.G. Bisht (Retd.)

Hon’ble Member (Technical) : Mr. Prabhat Kumar

Appearances:

For the Applicant : Advocate Arjun Sathees i/b Indialaw

LLP

For the Respondent No. 8 : Advocate Shreyas Shrivastava.

ORDER Per: Prabhat Kumar, Member (Technical)

1. The Applicant has filed the present Application impugning certain transactions as fraudulent under Section 66 the Insolvency and Bankruptcy Code, 2016 (‘Code’).

The reliefs sought by the Applicant as are follows:

a. This Tribunal may allow this Application in terms of Section 66(1) of the Code.

b. That this Tribunal be pleased to pass necessary orders directing the Respondent No. 1,2,3,4,5,6 and 7 to make contribution to the asset of the Corporate Debtor to the extent of aggregate amount of Rs.63,12,00,000/- (Rupees Sixty Three Crore and Twelve Lakh only), which is the extent of loss caused to the Corporate Debtor by wrongfully siphoning-off monies from the account of the Corporate Debtor to VEL, and by transacting to facilitate the unjust enrichment of VIL at the expense of the Corporate Debtor with the intent to defraud the creditors of the Corporate Debtor.

c. To pass such further and other orders as this Tribunal may deem fit and proper in the facts and circumstances of the case.

2. The Applicant submits that Petition was filed by the Financial Creditor to initiate Corporate Insolvency Resolution Process ("CIRP") and Mr. Udayraj Patwardhan was appointed an Interim Resolution Professional ("IRP") of Corporate Debtor vide Order dated 29 March, 2019.

3. It is submitted that no Resolution Plan was approved by the CoC during the CIRP period and subsequently the CoC resolved to liquidate Corporate Debtor. It is further submitted that this Tribunal vide Order dated 27.10.2020 passed an order under section 33 of the Code for commencement of the liquidation process of the Corporate Debtor and was further pleased to appoint the Applicant, the erstwhile Resolution Professional, as the Liquidator of the Corporate Debtor. It is submitted that the Corporate Debtor is a subsidiary company of Valecha Infrastructure Limited ("VIL") (74% shareholding) which in turn is a fully owned subsidiary company of Valecha Engineering Limited ("VEL"), the parent company.

4. It is submitted that Respondent No. 1 was responsible for the day to day affairs of the Corporate Debtor during the period from 22.04.2010 to 01.07.2011 and Respondent No. 2, 3, and 4 were the Erstwhile Directors of the Corporate Debtor before commencement of CIRP. Respondent No. 1 and 5 were the directors of VIL during the period from 06.01.1995 to 09.01.2020 and from 06.01.1995 to 09.01.2020 respectively. It is also submitted that Respondents No. 1, 5 and 6 were the director of VEL during the period from 01.08.2018 to 29.09.2018, from 11.06.2009 to 19.11.2019, and 01.08.2006 to 19.11.2019 respectively. Thereby, it is submitted that Respondents 1 to 4 are equally responsible for the day to day affairs of Corporate Debtor.

5. It is further submitted that the Respondent 7, Valecha Infrastructre Limited is a related party of the Corporate Debtor having 74% shareholding in the Corporate Debtor. It is submitted that Respondent 8, Dilip Buildcon Limited is a construction contractor company with whom a sub- contracting agreement was entered into by VEL, the parent company of the Corporate Debtor.

6. The CoC in the first meeting held on 02.05.2019 passed a resolution to appoint M/s.

Batliboi & Purohit, Chartered Accountants ("Transaction Auditors") to conduct a transaction audit of Corporate Debtor and identify if there were any t