NCLT Mumbai (2025.11.06) in Kamal Kishor Gurnani vs Mr. Sushil Sahani & Ors. [(2025) ibclaw.in 2563 NCLT, [IA 238 of 2023 in CP (IB) 3923/MB/C-1/2019] held that;
In our considered view, the deeming fiction in terms of Section 43 of the Code has been enacted to preserve and protect the total corpus available to the creditors of Corporate Debtor during look back period and the beneficial treatment resulting from a payment made to any creditor during such look back period has to be determined after taking into consideration of receipt of money from such creditor during such look back period also.
Nonetheless, as it is case of applicant that such payment by R1 on behalf of Corporate Debtor was made to R3 without approvals and justification, we consider it appropriate to set aside accounting to said transaction in the books of accounts, thereby, the balances due to R1 & R3 shall be re-stated in the books of Corporate Debtor accordingly.
Accordingly, the payments made to R1 for discharge of liabilities on behalf of Corporate Debtor can not be impugned as fraudulent to the extent such payments are verifiable from the records.
Excerpts of the order;
# 1. This Application IA 238/2023 was filed by Mr. Kamal Kishore Gurnani (“Applicant/RP”), the Resolution Professional of Pranav Construction Systems Private Limited (“Corporate Debtor”) in the Corporate Insolvency Resolution Process (“CIRP”) thereof under Section 43, 44 and 66 of the Insolvency and Bankruptcy Code, 2016 (“Code”), seeking following reliefs:-
1. To declare Transaction No. 1 as Preferential Transaction in terms Section 43 of the Code, and direct Respondent No. 2 for reversal of the amount of INR 6.75 Lacs to the Corporate Debtor as per Section 44 of the Code;
2. To declare Transaction No. II as Preferential Transaction in terms Section 43 of the Code, and direct Respondent No. 3 for reversal of the amount of INR 11.90 Lacs to the Corporate Debtor as per Section 44 of the Code;
3. To declare Transaction III as Fraudulent Transaction in terms of Section 66 of the Code, and direct Respondent No. 5 to pay an amount of INR 1189.96 Lacs to the Corporate Debtor;
4. To declare Transaction IV as Fraudulent Transaction in terms of Section 66 of the Code, and direct Respondent No. 6 to pay an amount of INR 276.32 Lacs to the Corporate Debtor;
5. To declare Transaction V as Fraudulent Transaction in terms of Section 66 of the Code, and direct Respondent No. 4 to pay an amount of INR 1189.96 Lacs to the Corporate Debtor;
6. To declare Transaction VI as Fraudulent Transaction in terms of Section 66 of the Code, and direct Respondent No. 1 to pay an amount of INR 465.41 Lacs to the Corporate Debtor;
7. Any other order which this Hon’ble Tribunal may find fit in the facts and circumstances of the present case.
# 2. The Applicant is a Resolution Professional of the Corporate Debtor having office address at 101, 1st Floor KanakiaAtrium-2, Cross Road ‘A’, Chakala MIDC, Andheri (E), Mumbai 400059. This Tribunal admitted the Corporate Debtor in CIRP process vide order dated 11.03.2022 (“Insolvency Commencement Date“) appointing the Applicant herein as the Interim Resolution professional (“IRP”) of the Corporate Debtor to carry out the functions as per the provisions of the Code, who was subsequently confirmed as Resolution Professional.
# 3. The Respondent No. 1 to Respondent No. 4 are the Erstwhile Directors/Promoters and Employee of the Corporate Debtor (hereinafter referred to as “Erstwhile Management of the Corporate Debtor”) and Respondent No. 5 is the Subsidiary Company of the Corporate Debtor, whereas Respondent No. 6 is related Company of the Corporate Debtor with whom certain transactions impugned in the present application were carried out.
# 4. As per Section 13 of the Insolvency and Bankruptcy Code 2016 read with Regulation 6 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons), Regulation 2016 a public announcement was made by the IRP on 13th March 2022 in Financial Express and Navakal (Marathi) of Mumbai edition, and Committee of Creditors (“CoC”) was constituted.
# 5. The Applicant appointed NV Dand & Associates as the Transaction Auditors to the Corporate Debtor (“Transaction Auditor“), who conducted the transaction audit for the period starting from 11th March 2020 till 11th March 2022 (hereinafter referred to as “Transaction Audit Period”) in order to identify transactions which are Preferential, Undervalued, Defrauding, Extortionate and Fraudulent as per the provisions of the Code. The Transaction Auditor submitted its transaction Audit Report dated 21 November 2022 (“Transaction audit Report”) to the Applicant.
# 6. Based upon the expert opinion provided by the Transaction Auditor in the Transaction Audit Report, the RP came to a conclusion that there were several transactions which were either Preferential and Fraudulent in nature. The applicant has impugned following transactions for declaration thereof as Preferential or Fraudulent in terms of Section 43, 44 and 66 of the Code.
a. Repayment of unsecured loan of INR 6.95 Lakhs to Mrs. Sunanda Sushil Sahani (R2) as preferential payment u/s 43 of the Code;
b. Repayment of unsecured loan of INR 11.90 Lakhs to Shreya Sahani (R3) as preferential payment u/s 43 of the Code;
c. Siphoning of funds of INR 1,189.96 Lakhs through its subsidiary Pranav Framework & Engg. (FZC) (R5) as Fraudulent in terms of Section 66 of the Code;
d. Payment to 3rd Party Vendors/suppliers of INR 276.32 Lakhs through Prasham Construction and Engineering Pvt Ltd (R6) as Fraudulent in terms of Section 66 of the Code;
e. IOU Debt of INR 170.18 Lakhs owed by the Corporate Debtor to Mr. Pranav Sahani (R4) as Fraudulent in terms of Section 66 of the Code; and
f. IOU Debt of INR 465.41 Lakhs owed by the Corporate Debtor to Mr. Sushil Sahani (R1) as Fraudulent in terms of Section 66 of the Code.
# 7. The Respondents have filed their reply, thereafter, the Applicant filed his rejoinder. An additional affidavit was also filed by the Applicant, to which the Respondents have also filed their response.
# 8. Heard the Counsel and perused the material on record.
# 9. Though, the applicant has filed combined application for impugning the transactions u/s 43 and 66 of the Code, however, the facts relating to each of these transactions and its nature i.e. preferential or fraudulent has been distinctly stated in the application. We will examine each of these transactions in the following para in the light of findings of the Applicant and the response thereto provided by the Respondents in relation to each of these transactions.
Transactions u/s 43 of the Code
# 10. Section 43 Section 43 is a deeming fiction which contemplates avoidance of transaction in nature of payments to persons within look back period (which is 2 years in case of related persons and 1 years in other cases) to the creditors in respect of antecedent debt owed to such creditors, if such payments results into preference to them over other creditors in case such payments would have been made in terms of Section 53 of the Code in the event of liquidation. However, section 43(3) of the Code saves transactions entered into ordinary course of business or financial affairs of the Corporate Debtor from this deeming fiction.
# 11. Repayment of unsecured loan of INR 6.95 Lakhs to Mrs. Sunanda Sushil Sahani (R2) as preferential payment u/s 43 of the Code :
a. It is not in dispute that there was an antecedent debt payable to the R2 as on commencement of look back period, which is two years as the R2 being a related person. R2 has claimed that there was total debt of Rs. 34.28 Lakhs as due from the Corporate Debtor, out of which a sum of Rs. 6.95 lakhs was withdrawn to meet urgent requirement of funds for higher education of her daughter. The Applicant has stated the total debt due as Rs. 16.23 Lakhs, nonetheless, existence of antecedent debt is not in question. It is also not in dispute that such withdrawal by R2 has resulted into a preference in repayment of debt due to him by the Corporate Debtor over other creditors had such payment would have received in terms of Section 53 of the Code.
b. The R2 has submitted that a sum of Rs. 25.00 Lakhs was once again paid Rs 25,00,000 (Rupees Twenty Five Lakh only) on 22.10.2021 as unsecured loan (Second Loan from Respondent No.2) for day today operational requirement of the Corporate Debtor and the Applicant has conveniently suppressed this fact. The applicant has not stated the date of withdrawal of this sum of Rs. 6.75 Lakhs, however, the Transaction Auditor has reported such withdrawal during the period from 1.4.21 to 11.3.2022. The Applicant disputed the explanation offered by R2 on ground that no evidence has been annexed in support of his defense, which was placed by R2 in his response to the additional affidavit. It is noted from the R2’s response to additional affidavit filed by the Applicant, that the fees was paid on 13.01.2022, meaning thereby the amount was withdrawn from Corporate Debtor around that time only. It is pertinent to note that the applicant has, even after being told about payment of Rs. 25.00 Lakhs on 22.10.2021 by Respondent No. 2 to Corporate Debtor for its day today operational requirement, has chosen not to rebut the same, has consistently pleaded its case as if the payment of Rs. 6.75 Lakhs was made from the antecedent debt payable as on commencement of look back period. If we consider the facts of the case in totality, R2 had paid a sum of Rs. 25.00 Lakhs to the Corporate Debtor as fresh loan and withdrawn Rs. 6.75 Lakhs during such period, thus, R2 has given additional debt of Rs. 18.25 Lakhs during the look back period to the Corporate Debtor. In these circumstances, it can not be said that the withdrawal of Rs. 6.75 Lakhs to R2 resulted into putting R2 in a beneficial position than it would have been in the event of a distribution of assets being made in accordance with section 53 .
c. In our considered view, the deeming fiction in terms of Section 43 of the Code has been enacted to preserve and protect the total corpus available to the creditors of Corporate Debtor during look back period and the beneficial treatment resulting from a payment made to any creditor during such look back period has to be determined after taking into consideration of receipt of money from such creditor during such look back period also. Accordingly, we do not find any merit in the prayer of applicant in relation to this transaction, as it does not fall within scope of Section 43 of the Code.
# 12. Repayment of unsecured loan of INR 11.90 Lakhs to Shreya Sahani (R3) as preferential payment u/s 43 of the Code :
a. It is not in dispute that there was an antecedent debt payable to the R3 as on commencement of look back period, which is two years as the R3 being a related person.
b. It has been explained by R3 that she is daughter of R1 & R2 and the loan advanced by her to the Corporate Debtor in on 28.2.2018 with an understanding that the same shall be repaid to her when she would be in need of the same, however, there is no evidence on record to substantiate the same. It is further explained that when she required money for her higher education, the aforesaid loan was partly paid by the Corporate Debtor through the Respondent No.1 via bank transfer in four tranches: (i) Rs 1,00,000 (Rupees One Lakh only) on October 26, 2020; (ii) Rs 40,000 (Rupees Forty Thousand only) on October 26, 2020; (iii) Rs 3,50,000 (Rupees Three Lakh Fifty Thousand only) on January 20, 2021; and (iv) Rs 7,00,000 (Rupees Seven Lakh only) on February 11, 2021 respectively totalling to Rs 11,90,000 (Rupees Eleven Lakh Ninety Thousand only).
# 13. The Applicant has submitted in additional affidavit that the said amount of INR 11.90 lacs is now showing to be owed to Mr. Sushil Sahani by the Corporate Debtor and, without any proper justification or relevant approvals, the amount of INR 11.90 Lacs was transferred by Erstwhile Management of the Corporate Debtor to Ms. Shreya Sahani. This response clearly shows that the payment was not made from the Corporate Debtor’s account, but was made by R1 from his personal account on behalf of Corporate Debtor. In case, it is case of the Applicant that such payment was made without any proper justification or relevant approvals, he ought to have sought setting aside credit to the account of R1 and debit to the account of R3, but in no case, this payment from R1 could held to be a transaction resulting into putting R3 in beneficial position from the account of Corporate Debtor. Nonetheless, as it is case of applicant that such payment by R1 on behalf of Corporate Debtor was made to R3 without approvals and justification, we consider it appropriate to set aside accounting to said transaction in the books of accounts, thereby, the balances due to R1 & R3 shall be re-stated in the books of Corporate Debtor accordingly.
Transactions u/s 66 of the Code
14. Section 66 of the reads as under :
“Section 66: Fraudulent trading or wrongful trading.
*66. (1) If during the corporate insolvency resolution process or a liquidation process, it is found that any business of the corporate debtor has been carried on with intent to defraud creditors of the corporate debtor or for any fraudulent purpose, the Adjudicating Authority may on the application of the resolution professional pass an order that any persons who were knowingly parties to the carrying on of the business in such manner shall be liable to make such contributions to the assets of the corporate debtor as it may deem fit.
(2) On an application made by a resolution professional during the corporate insolvency resolution process, the Adjudicating Authority may by an order direct that a director or partner of the corporate debtor, as the case may be, shall be liable to make such contribution to the assets of the corporate debtor as it may deem fit, if—
(a) before the insolvency commencement date, such director or partner knew or ought to have known that the there was no reasonable prospect of avoiding the commencement of a corporate insolvency resolution process in respect of such corporate debtor; and
(b) such director or partner did not exercise due diligence in minimising the potential loss to the creditors of the corporate debtor.
(3) Notwithstanding anything contained in this section, no application shall be filed by a resolution professional under subsection (2), in respect of such default against which initiation of corporate insolvency resolution process is suspended as per section 10A.
Explanation.—For the purposes of this section a director or partner of the corporate debtor, as the case may be, shall be deemed to have exercised due diligence if such diligence was reasonably expected of a person carrying out the same functions as are carried out by such director or partner, as the case may be, in relation to the corporate debtor.”
# 15. Section 66 of the Code has two limbs i.e. (i) carrying of business of the corporate debtor with intent to defraud creditors of the corporate debtor or for any fraudulent purpose, and (ii) exercise due diligence in minimising the potential loss to the creditors while knowing absence of reasonable prospect of avoiding the commencement of a corporate insolvency resolution process.
# 16. Siphoning of funds of INR 1,189.96 Lakhs through its subsidiary Pranav Framework & Engg. (FZC) (R5) as Fraudulent in terms of Section 66 of the Code :
a. It is stated by the Applicant that the Erstwhile Management of the Corporate Debtor has tried to siphon of the amount of INR 1189.96 lacs through its subsidiary Pranav Formwork & Engg. (FZC), Respondent No. 5; the outstanding dues receivables from the Respondent No. 5 as on 12.03.2020 was of INR 1,501.28 Lacs out of which INR 722.98 Lacs were categorized into doubtful recovery by the Erstwhile Management of the Corporate Debtor; and the same amount of receivable was carried forward in F.Y. 2020 – 2021, wherein the total receivable from Respondent No. 5 Company was of the same i.e., INR 1,501.28 Lacs, however, during the F.Y. 2020-2021 the Erstwhile Management of the Corporate Debtor categorized INR 1,189.96 lacs (i.e., approx. 80% of the said receivable) as a doubtful recovery from Respondent No. 5 Company. It is alleged that the Audited Financials of the said subsidiary, the supporting documents such as necessary approval from the Board of Directors related records, efforts made for such doubtful recoveries and legal action taken against the parties was not provided by the Erstwhile Management of the Corporate Debtor, and neither they have reported such details in the audited accounts of the Respondent No. 5 Company. It is alleged that such transaction was carried by the Erstwhile Management of the Corporate Debtor is transaction with an intent to defraud the creditors of the Company or for any fraudulent purpose.
b. The Respondent (R5) through Mr. Sushil Sahani (R1) has explained that R5 was considering the rental business model for ongoing Infra Projects in Middle east countries, however due to economic shut down the desired rental income could not be realised as a result of which R5 was unable to pay back to the Corporate Debtor. It is further explained that it could not repay the Corporate Debtor owing to non-receipt of outstanding dues amounting to INR 3.5 crores from its customer, M/s. Simplex Infrastructure Limited, which itself is undergoing CIRP proceedings. Further, the amount has ballooned on account of devaluation of Indian rupees on account of re-statement of receivables from R5 in Indian currency at end of each financial year due to prescription in the Accounting Standards.
c. The Transaction Auditor has quoted the response of Suspended Board which reads as “CR: Due to cash flow situations all the staff working for M/s. PFE has left the organisation also the trade license could not get renewed, and subsequently no business / sales has been generated post year 2016. The copies of audited balance-sheet has been already shared with IRP”.
d. Indubitably, the financial results of R5 being its subsidiary were required to be consolidated in the audited financial statements of the Corporate Debtor in terms of Companies Act, 2013. The Applicant has not averred whether it was done so or nor and has also not rebutted the claim of Respondents as noted by the Transaction Auditor in their report that the audited financial statements of subsidiary company were given to IRP and R5’s trade license in UAE has been cancelled. On perusal of the pleadings in the application, it is noted that neither the Transaction Auditor nor the Applicant has disbelieved the explanation offered by Respondent that the said balance was built up out of exports made to R5 in FY 2008-09 and FY 2014-15. However, it is pertinent to note that the Corporate Debtor have been acknowledging the amounts due from R5 as recoverable till March 2020, whereat only a sum of Rs. 722.98 crore was reported as doubtful. However, the initial transaction of exports made to R5 can not been doubted as the same was duly accounted for in books of Corporate Debtor and accepted by its auditors as well. Accordingly, it can not be said that the business of the Corporate Debtor was carried out with an intent to defraud its creditors or for any fraudulent purpose in so far as this transaction is concerned.
e. The Applicant has sought contribution from R5 in relation to this transaction, which in our considered opinion is still recoverable from them as terming the said balance as doubtful of recovery does not take away right of a creditor to recover the said amount from the debtor. However, it is pertinent to note that R5 is a registered legal entity in UAE and its trade license is reported to have been cancelled. The Applicant has not carried out any due diligence as to whether it still exists or what was its financial position as per latest available financial statement or as incorporated in consolidated financial statements of Corporate Debtor.
f. In view of these facts, we consider it appropriate to direct the applicant to carry out further inquiry in the affairs of R5 and take necessary steps to recover the said outstanding from it. Needless to say, R5 shall furnish necessary information to the Applicant and pay the amounts due from them. Further, R1 and R2 shall assist the Applicant in his effort for recovery of said amount, which is recoverable from R5.
# 17. Payment to 3rd Party Vendors/suppliers of INR 276.32 Lakhs through Prasham Construction and Engineering Pvt Ltd (R6) as Fraudulent in terms of Section 66 of the Code;
a. It is stated that R6 made several payments amounting to INR 276.32 Lacs on behalf of the Corporate Debtor. The Transaction Auditor has summarized the account of R6 in books of Corporate Debtor as follows :
b. The Applicant has listed out in the application the details of the payments made by the Respondent No. 6 on behalf of the Corporate Debtor for aggregate sum of Rs. 276.32 Lakhs, the details of which are given below :
c. It was explained by the Respondent that GST component was debited by it to the Corporate Debtor on account of non payment of GST charged but not paid and not filed, in spite of release of payment to the Corporate Debtor, as the said amount was recovered by GST department in annual audit exercise on account of inadmissible GST input credit due to non payment by Corporate Debtor. The Corporate Debtor was debited for supplies directly made to customer of Corporate Debtor i.e. RCC Infra Ventures Ltd., as the Corporate Debtor could not effect supplies to it in view blockage of Eway bill generation utility of the Corporate Debtor on account of default in payment of GST liability necessitating direct supply to it at the request of Corporate Debtor who had already received 100% payment against such supplies from RCC Infra Ventures Ltd. Further, Rs. 1.00 Lakhs was paid to Pro-arc Welding and Cutting Systems Pvt. Ltd. was made for supplies of Welding Rods for fabrication work to continue the work, which otherwise was in scope of Corporate Debtor. Besides this, Rs. 30.00 lakhs was debited on account of adjustment of one advance for purchase of laser machine from it, which was requested by Corporate Debtor to be supplied to it against settlement of this amount towards their running bills due from R6. The statutory payments were made to statutory authorities, who was contractor for works for the project of R6 in view of default on its part to discharge the same, accordingly, these amounts were recovered from it. A sum of Rs. 11.64 Lakhs was debited against the material supplied to Kanakia Spaces, which in turn was supplied by Corporate Debtor to R6. Since this transaction was agreed to be carried out between Corporate Debtor and Kanakia, the said debit has the effect of reversal of earlier credit in books of R6 on account of purchase from Corporate Debtor.
d. On perusal of the details of credits given to R6 on account of various transactions involving Corporate Debtor with such third parties, it is noted that these credits given to R6 have been explained in details, which in our considered view, can not held to be fraudulent in nature or have been done with intent to defraud the creditors of the Corporate Debtor.
e. In view of this none of the credit can not be held to be fraudulent so as to warrant an order of contributions from R6 as prayed.
# 18. IOU Debt of INR 170.18 Lakhs owed by the Corporate Debtor to Mr. Pranav Sahani (R4) as Fraudulent in terms of Section 66 of the Code :
a. It is stated by the Applicant that Mr. Pranav Sahani (R4), related party of the Corporate Debtor was also in employment with the Corporate Debtor and the Corporate Debtor has remitted INR 154.09 Lakhs, besides debited his account by INR 16.09 Lakhs through Journal Voucher (“JV”). The Transaction Auditor has summarized the transactions in its Report as follows :
b. It is explained by the Respondent that it is a matter of record that the banks through which all banking transactions were done earlier had stopped allowing operation of any transactions, thereby forcing the Corporate Debtor to transact through cooperative banks, which did not have net banking facility. Thus, in order to take care of statutory dues payment and other critical payments, the Corporate Debtor routed the payment through Respondent No. 1 and Respondent No. 4.
c. The Applicant has listed out in the application the details of the payments made by the Respondent No. 4 on behalf of the Corporate Debtor for aggregate sum of Rs. 135.02 Lakhs, the details of which are given below :
d. On perusal of which it is evident that more than 95% of payments stated therein pertains to payment to statutory authorities. Such details substantiate the explanation offered by the Respondent, however, the Applicant has disputed this explanation stating that essential supporting documents such as approval of board of directors authorizing such payments, copies of personal bank account statements of R4 reflecting the alleged payments, confirmation/ no dues certificates obtained from the creditors of the Corporate Debtor to whom such payments are stated to be made have not been furnished. We find such objection meritless as discharge of such statutory liabilities are verifiable from the books of Corporate Debtor itself or GST/TDS/ESI/PF portals where at the details of amounts due from an entity and its discharge are available. Accordingly, the payments made to R4 for discharge of liabilities on behalf of Corporate Debtor can not be impugned as fraudulent to the extent such payments are verifiable from the records.
e. It is alleged that the Corporate Debtor had remitted a sum of Rs. 154.09 Lakhs to R4, and has credited his account by Rs. 135.02 Lakhs. However, it is also noted from the statement provided in Transaction Audit report that a sum of Rs. 37.45 Lakhs was received back from R4. Further, a payment of Rs. 16.00 Lakhs is stated to be made by R1 to R4 which is debited to R4’s account by journal voucher. If we consider these amounts in totality, a sum of Rs. 170.09 Lakhs was paid to R4, against which a sum of Rs. 135.02 Lakhs was paid to Corporate Debtor and a sum of Rs. 37.45 Lakhs was returned to it through Banking channel. Accordingly, as against payment of Rs. 170.09 Lakhs, a sum of Rs. 172.47 Lakhs stands appropriated for and on behalf of Corporate Debtor. Accordingly, no money was paid from the account of Corporate Debtor.
f. The Applicant has contended that the documents furnished by R4 with affidavit in reply to additional affidavit are presented in a haphazard manner, without any proper bifurcation, reconciliation or supporting to arrive at INR 170.18 Lakhs, accordingly, we consider it appropriate to direct R4 to provide a statement showing each payment made on behalf of Corporate Debtor with person to whom it is paid and map such details with the corroborating evidence supplied by him in response to additional affidavit. After this exercise, the Applicant shall account for such payments as credit to R4 and determine what is still receivable from R4 on this account. Needless to say, if there is debit balance recoverable from R4, the same shall be paid by R4 without any further delay.
# 19. IOU Debt of INR 465.41 Lakhs owed by the Corporate Debtor to Mr. Sushil Sahani (R1) as Fraudulent in terms of Section 66 of the Code :
a. It is stated by the Applicant that the Corporate Debtor has remitted significant amount of INR 443.11 Lacs to its Director, Mr. Sushil Sahani, Respondent No. 1 and has also debited his account by INR 22.30 Lacs through Journal Voucher (“JV”) during the Transaction Audit period. The Transaction Auditor has summarized the transactions in its Report as follows :
b. It is explained by the Respondent that the amount in question has been paid towards Statutory Dues like GST Dues, TDS Dues, PF, ESIC, MPCB Fees and towards repayment of bank dues under OTS scheme as the Corporate Debtor was not having net banking facility so to take care of statutory dues payment and other critical payments, the Corporate Debtor routed the payment through Respondent No. 1 and Respondent No. 4.
c. The Applicant has listed out in the application the details of the payments made by the Respondent No. 1 on behalf of the Corporate Debtor for aggregate sum of Rs. 434.02 Lakhs, the details of which are provided in the application as below :
d. On perusal of which it is evident that more than 90% of payments stated therein pertains to payment to statutory authorities. These details substantiate the explanation offered by the Respondent, however, the Applicant has disputed this explanation stating that essential supporting documents such as approval of board of directors authorizing such payments, copies of personal bank account statements of R1 reflecting the alleged payments, confirmation/ no dues certificates obtained from the creditors of the Corporate Debtor to whom such payments are stated to be made have not been furnished. We find such objection meritless as discharge of such statutory liabilities are verifiable from the books of Corporate Debtor itself or GST/TDS/ESI/PF/Banks portals whereat the details of amounts due from an entity and its discharge are available. Accordingly, the payments made to R1 for discharge of liabilities on behalf of Corporate Debtor can not be impugned as fraudulent to the extent such payments are verifiable from the records.
e. It is alleged that the Corporate Debtor had remitted a sum of Rs. 443.11 Lakhs to R1, and has credited his account by Rs. 22.30 Lakhs. However, it is also noted from the statement provided in Transaction Audit report that a sum of Rs. 29.24 Lakhs was received back from R4. Further, a payment of Rs. 22.30 Lakhs was debited to R1’s account by journal voucher. If we consider these amounts in totality, a sum of Rs. 465.41 Lakhs was paid to R1, against which a sum of Rs. 434.02 Lakhs was paid on behalf of the Corporate Debtor and a sum of Rs. 29.24 Lakhs was returned to it through Banking channel. Accordingly, as against payment of Rs. 465.41 Lakhs, a sum of Rs. 463.26 Lakhs stands appropriated for and on behalf of Corporate Debtor. Accordingly, only a sum of Rs. 1.15 Lakhs stands unappropriated.
f. The Applicant has contended that the documents furnished by R1 with affidavit in reply to additional affidavit are presented in a haphazard manner, without any proper bifurcation, reconciliation or supporting to arrive at INR 465.41 Lakhs, accordingly, we consider it appropriate to direct R1 to provide a statement showing each payment made on behalf of Corporate Debtor with person to whom it is paid and map such details with the corroborating evidence supplied by him in response to additional affidavit. After this exercise, the Applicant shall account for such payments as credit to R1 and determine what is still receivable from R1 on this account. Needless to say, if there is debit balance recoverable from R1, the same shall be paid by R4 without any further delay.
# 20. In terms of above, IA 238 of 2023 is partly allowed and disposed of accordingly.
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