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2025 Supreme(Online)(NCLT) 6567
IN THE NATIONAL COMPANY LAW TRIBUNAL NEW DELHI BENCH
Atul Chaturvedi, MEMBER (TECHNICAL), Manni Sankariah Shanmuga Sundaram, MEMBER (JUDICIAL)
Devendra Umrao Resolution Professional – Appellant
Versus
Amit Kumar Dubey – Respondent
I.A. NO. 2948 OF 2024 IN C.P. NO. 304(ND) OF 2022
For the Applicant: Mr. Gaurav Mitra, Mr. Abhishek Parmar
For the Respondent No 2: Mr. Jeetender Gupta, Mr. Ashish Mishra, Mr. Bharat Rawat
Directors of a corporate debtor are accountable for fraudulent transactions conducted with intent to defraud creditors under the Insolvency and Bankruptcy Code.
Headnote:(A) Insolvency and Bankruptcy Code, 2016 - Section 66 - Fraudulent Transactions - Resolution Professional alleges fraudulent transactions by directors of Corporate Debtor that defrauded creditors - Donations to non-business entities, failure to collect interest, and falsification of accounts cited as fraudulent acts - Court holds transactions were conducted with intent to defraud under Section 66(1) - Directors ordered to contribute significant sums to assets of Corporate Debtor to address the financial prejudice caused. (Paras 2, 3, 4, 11, 12, 15)
(B) Fraudulent Trading - Needs established connection to defrauding creditors - Evidence of misconduct by management leading to loss of funds demonstrated - Burden on directors to justify transactions during financial distress. (Paras 5 - 9)
Facts of the case:
Application by Resolution Professional for contributions due to transactions deemed fraudulent, including large donations, interest-free loans, and falsified expenses.
Findings of Court:
Respondent directors ordered to contribute over Rs. 10 Crores due to fraudulent transactions that prejudiced creditors.
Issues: The legitimacy of donations made during insolvency proceedings, and the responsibility of directors in financial mismanagement.
Ratio Decidendi: Transactions found to be fraudulent if carried out with intent to defraud creditors; directors must act in the interest of creditors during financial distress.
Result: Present Application allowed, directors liable for significant contributions to corporate assets.
| Table of Content |
|---|
| 1. resolution professional seeks to declare transactions fraudulent. (Para 1) |
| 2. evidence of actions taken by directors that indicate fraudulent intent. (Para 2 , 3) |
| 3. court examines the legality and rationale of transactions conducted. (Para 4) |
ORDER
PER: ATUL CHATURVEDI, MEMBER (TECHNICAL)
1. The present Application is being filed by the Applicant, i.e. the Resolution Professional of Opulent Infradevelopers Private Limited ("Corporate Debtor/CD") under Section 66 of the Insolvency and Bankruptcy Code, 2016 ("Code") seeking the following reliefs:
a. Allow the present application;
b. Declare the payment of Rs. 3,10,00,000/- as fraudulent transaction under section 66 of the Code and Pass Consequential directions against the directors of the Corporate Debtor i.e Respondent No.1 to 2 to make contributions to the assets of the corporate debtor for deliberately defrauding the creditors and diverging funds from the Corporate Debtor;
c. Declare the payment of Rs. 1,33,68,225.95/- as fraudulent transaction under section 66 of the Code on account of non-collection of interest towards loan advanced to third parties and Pass Consequential directions against the directors of the Corporate Debtor i.e Respondent No.1 to 2 to make contributions to the assets of the corporate debtor for deliberately defrauding the creditors and diverging funds from the Corporate Debtor;
d. Declare the payment of Rs. 1,06,80,389/- as fraudulent transaction under section 66 of the Falsification of Book by way of Set Off of Adjustments and Pass Consequential directions against the directors of the Corporate Debtor ie Respondent No. 1 to 2 to make contributions to the assets of the corporate debtor for deliberately defrauding the creditors and diverging funds from the Corporate Debtor;
e. Declare the payment of Rs. 4,96,09,957/- as fraudulent transaction under section 66 of the code on account of booking false/non business related expenses and Pass Consequentia directions against the directors of the Corporate Debtor i.e Respondent No.1 to 2 to make contributions to the assets of the corporate debtor for deliberately defrauding the creditors and diverging funds from the Corporate Debtor;
f. Pass Consequential directions against the directors of the Corporate Debtor for deliberately defrauding the creditors and diverging funds from the Corporate Debtor;
g. Direct the directors of the Corporate Debtor to make such contributions to the assets of the Corporate Debtor as it may deem, including order/directions under Section 67 of the Code;
h. Pass such other or further Order/ Order(s) as may be deemed fit and proper in the facts and circumstances of the instant case.
2. SUBMISSIONS OF THE APPLICANT:
i. This Adjudicating Authority vide its order dated 12.07.2022 admitted the above captioned company petition i.e. CP (IB) No. 304 of 2022 filed on behalf of Financial Creditor i.e. Genesis Comtrade Pvt. Ltd. against the Corporate Debtor for commencement of the Corporate Insolvency Resolution Process (CIRP) under Section 7 of the Code and Mr. Devendra Umrao was appointed as the Interim Resolution Professional and later confirmed as the Resolution Professional in the 1st CoC Meeting.
ii. It is submitted that pursuant to taking charge of the management of the Corporate Debtor, the Applicant wrote an e-mail dated 15.07.2022, to the suspended Board of Directors of the Corporate Debtor, apprising them about the initiation of CIRP proceedings of the Corporate Debtor by virtue of the order dated 12.07.2022 passed by this Adjudicating Authority and requesting them to provide the information/ documents as asked by the Applicant in the email dated 15.07.2022. Further the Applicant also requested them to refrain from making any payment transactions, issue any cheques or payment vouchers as signed by the previous signatories.
iii. It is further submitted that the Applicant visited the project site of the Corporate Debtor situated at Sector-168, Noida-201306 on 16.07.2022 where he met
