ORDER

(Physical Hearing)

This application has been filed by liquidator of Srivatsa International Private Limited under Section 60(5) of Insolvency and Bankruptcy Code 2016.

a) Declare that the alleged Land and Buildings bearing in RS No. M4/12-9 of Vadiweeswaram Village, Nagercoil Corporation and Superstructure thereon is an asset of the CD and Consequently, direct the 3rd Respondent to hand over the same to the Liquidation Estate of the CD

b) To declare such acts of the Respondent No.s 1 to 2 are fraudulent;

c) Punish the 1st and 2nd Respondent as per Code; and

d) To pass such orders or further orders which deem to be fit and proper in the interest of justice.

APPLICANTS SUBMISSIONS

2.1 The corporate debtor is admitted to CIRP vide order dated 04.12.2020 by an application filed by the financial creditor Ligori Valan Irudhayaraj, on initiation of CIRP the Coc on detail deliberations decided to recommend the liquidation of the CD with 74.71% voting power.

2.2 It is submitted that the Liquidator to take into his custody of all the assets and properties of the Corporate Debtor found various transactions which are done to defraud the creditors and suspended Directors of the CD, It is stated that suspended directors did not hand over any documents till date to the applicant to suppress the vital facts of the CD.

2.3 It is submitted that as per the last audited balance sheet for the year 2017-18, the following assets are shown in the fixed assets Schedule: - Land- Rs.42,40,451- Buildings - Rs.23,33,42,247- It is stated that the suspended directors of the corporate debtor has not handed over any Lands and Buildings except one showroom and one workshop situated at Thiruvananthapuram. It is submitted that the corporate debtor has incurred expenses on Buildings every year and availed depreciation allowance on buildings and reduced his Income Tax Liability.

2.4 It is submitted that in the year 2010-11, the assets and liabilities of M/s. Srivatsa Bajaj and Srivatsa Bajaj Commercial Vehicles were taken over by M/s. Srivatsa International Private Limited. However M/s. Srivatsa Bajaj and M/s.Srivatsa Bajaj commercial vehicles the partnership firms with the partner as respondents no. 1 and 2 Mr.K.Boothalingam and Mrs.R.L.Rekha who were allotted equal amount of Rs.4,60,00,000/- as share application money pursuant to takeover of all the Assets and Liabilities of the M/s.Srivatsa Bajaj and M/s.Srivatsa Bajaj Commercial Vehicles and the amount of Share Application Money are shown in the Balance Sheet of Srivatsa International Private Limited. It is submitted that ownership of Lands is not changed in the Revenue and Registration Department Records.

2.5 It is submitted that in the properties transferred from Srivatsa Bajaj and Srivatsa Bajaj Commercial Vehicles to Srivatsa International Private Limited, the Land and Building used for Workshop in RS No.M4/12-9 of Vadiveeswaram Village, Nagercoil Corporation having to an extent of 38.5 cents is also included and The above Land and Building was included in the Fixed Assets Schedule of the Company and depreciation was calculated, It is submitted that the above Land and Building were mortgaged to Yes Bank by Mr.K.Boothalingam for the loan facility availed by the Srivatsa International Private Limited as Personal Guarantee.

2.6 It is submitted that once properties are handed over to Srivatsa International Private Limited and equal value of amount received as Share Application Money in Srivatsa International Private Limited, they cannot have any ownership right on the property handed over to Srivatsa International Private Limited.

2.7 In the written submission filed by the applicant it is submitted that in the FY 2010–11 Srivatsa International Private Limited (CD) took over all the assets and liabilities of two partnership firms namely M/s. Srivatsa Bajaj and Srivatsa Bajaj Commercial Vehicles and the Partners of the above two Partnership Firms (husband and wife) received ₹4.6 crores as Share Application Money in Sriva