ORDER

Per: BENCH

1. The present petition is filed on 13.08.2020 by the Liquidator of M/s Veracious Builders and Developers Private Limited (hereinafter referred to as “Corporate Debtor”) under section 66(1) and (2) of the IBC, 2016, interalia praying that this Tribunal may direct the Respondents to jointly and severally pay a sum of Rs. 13,21,92,691/- into the Liquidation Account of the Corporate Debtor as contribution to the assets of the Corporate debtor.

2. The facts of the case are mentioned below:

a) It is submitted that vide order dated 17.01.2020 ordered the liquidation of the corporate debtor in terms of Section 33(2) of the Code and has appointed the applicant as the Liquidator of the Corporate Debtor.

b) Further, due to conduct of business of the Corporate Debtor by the Respondents, concerns regarding certain related party transactions and other financial irregularities were raised by the members of the Committee of Creditors in the meetings. In the light of these concerns, a resolution was unanimously passed by the Committee of creditors in its First meeting dated 11.09.2019 to conduct a Transaction Audit Review.

c) Thereafter, in the second meeting of the Committee of creditors held on 19.09.2019 the period of the Transaction Audit Review was unanimously approved from March 2016 till the date of commencement of the CIRP on 30.07.2019.

d) Further, in the third meeting of the Committee of creditors held on 05.11.2019, resolution was unanimously passed appointing M/s Sarath and Associates, Chartered Accountants, as the Transaction Auditor for the Corporate Debtor. Subsequently M/s Sarath and Associates, Chartered Accountants, are appointed to carry out the Transaction Audit of the Corporate Debtor for the period from 01.04.2015 to 30.07.2019.

e) It is submitted that on 29.07.2020 M/s Sarath and Associates, Chartered Accountants, submitted their Transaction Audit Report of the Corporate Debtor. And the same has been attached along with the application. The findings arrived at in the Transaction Audit Report are as follows:

(i) Loans and Advances written off:

(1) Loans and advances of the corporate debtor totally amounting to Rs. 19,53,97,557/- were systematically written off in the books of the Corporate Debtor, which is evidence of diversion of the funds of the Corporate debtor by the Respondents. These transactions were made through bank/cheques to various parties and the receivables in this regard were subsequently written off to the profit and loss account.

(2) The books of account of the Corporate Debtor have recorded the above mentioned payments as advances that were paid to the ledger accounts of different individuals created under the head ‘Advance paid for projects’. However, details of these individuals such as the address, contact number, PAN and GST details have not been recorded. This establishes these were fraudulent transactions and designed by the respondents to remove monies from the Corporate Debtor and thereby defraud its creditors.

(3) There were no clear narrations or evidences made available by the respondents when in control of the corporate debtor to prove that the transaction are of pure business nature and entered into with due care and diligence. There are no documents such as purchase orders, invoices, delivery receipts, etc available with the Corporate Debtor to establish that nay goods or services were received in respect of the advances made. This establishes that these amounts were siphoned off by the Respondents.

(ii) Loan advanced to the Respondent No. 1 by the Corporate Debtor.

(1) The Respondent made various personal expenditures from the sums of the Corporate Debtor including credit card payments, payments of life insurance premiums, payment of school fees etc. these transactions were wholly unrelated to the business of the corporate debtor and were personal in nature.

(2) The said sums were expended by the Corporate Debtor by the debiting an account titled ‘loans to director’ in the name of the R