NCLT Guwahati (04.02.2022) in Sandeep Khaitian, IRP Vs. Piyush Periwal & others.(Cont. Application No. 1/2021 IN CP (IB)/09/GB/2019) held that;
When sufficient provisions are available in the IBC especially under Sections 19, 66 and 74 of IBC to deal with the situations of non-cooperation by the Suspended Management to the RP in completion of CIRP, fraudulent trading or wrongful trading, if any, during Corporate Insolvency Resolution Process or a Liquidation Process, and Punishment for Contravention of Moratorium provisions of Section 14 of IBC then why he had filed FIR on 23.04.2020 with Margherita, Police Station.
Excerpts of the order;
# 1. The present application has been filed under Section 74 of the Insolvency and Bankruptcy Code, 2016 on behalf of the Applicant-Resolution Professional for National Plywood Industries Ltd., on account of the wilful violation of Section 14 of the Insolvency and Bankruptcy Code by the Respondent.
# 2. Stressed Assets Stabilization Fund had filed an application for initiation of Corporate Insolvency Resolution Process (CIRP) u/S. 7 of the Insolvency & Bankruptcy Code (IBC) against M/s. National Plywood Industries Ltd., the Corporate Debtor (CD). The same was admitted by this Bench vide order dated 26.08.2019 and the Applicant was appointed as the Resolution Professional of the CD vide order dated 08.11.2019
# 3. It is submitted by the RP that:
3.1 During the CIRP, the Applicant was shocked to learn that the Respondent had made illegal and unauthorized transfers/transactions from the bank account of the Corporate Debtor. The Applicant was also facing persistent non-cooperation by the Respondent and other personnel of the Corporate Debtor. The Respondent and other personnel of the Corporate Debtor had completely impeded the conduct of the CIRP. Consequently, the Applicant/Resolution Professional was constrained to file an application under Section 19(2) read with Section 23(2) of the Code before this Bench seeking appropriate measures and directions. In addition to filing the Application under Section 19, the Applicant also immediately took other steps and filed an FIR dated 23.04.2020 with Margherita, Police Station, detailing the particulars of the illegal transactions. The illegal transactions done by the Respondent was deliberately done during to the Covid 19 pandemic outbreak and the lockdown period, knowing fully well that offices, including the RP would be having limited functionality
3.2 This Bench upon hearing the Application under Section 19 filed by him prima facie found merit and vide its order dated 20.05.2020 inter alia directed as under:
“i. The directors of the suspended board of the CD are to cooperate with IRP and to provide all assistance to him to complete the CIRP in time.
ii. The auditors are to complete the transaction audit immediately, preferably within two weeks from the date of receipt of this order by way of email. RP is directed to serve a copy to the auditors on receipt of the order by him. And
iii. The directors of the suspended board of the CD are to refund the amount withdrawn less the amount if any paid to the alleged supplier as the cost of raw materials subject to the satisfaction of the RP with sufficient proof of payment during the CIRP period, within two weeks of receipt of this order. Failing which the IRP can move an application for contempt. ..."
3.3 The factum of illegal and unauthorized transfer of funds was once again recognized by this Hon'ble Tribunal vide its order dated 05.06.2020, wherein it recorded that
"... the respondents are found prima facie liable to refund the amount unauthorizedly withdrawn from the account of the CD.”
That despite specific Orders passed by this Tribunal; the Respondent has wilfully defied the same and not returned a single rupee of the money which was illegally diverted from the accounts of the Corporate Debtor notwithstanding the specific requisition by RP to Mr. Piyush Periwal, the CMD of NPIL regarding the same. Pertinently, even the concerned bank, had frozen/created a lien over the amounts that were illegally transferred. An amount of Rs. 32.50 lakhs were transferred by the Respondent to a bank account held by a related party of the Corporate Debtor, viz. JSVM Plywood Industries Ltd, having Bank Account No. 149905001306 in ICICI Bank Ltd., Chandrasekarpur Branch, Bhubaneshwar. And Mr. Periwal along with his extended family members/relatives hold the majority shareholding in this related company (JSVM).
3.4 The unauthorized/ illegal transfer made by the Respondent defeats the object and purpose of the Code and the intent of the legislature which as per Section 14 was to suspend the control of the erstwhile Board and its Directors. Accordingly, the Respondent is liable to be punished as contemplated under Section 74 of the IBC.
ORDER
# 4. Heard both the parties at length and perused the documents submitted and arguments made. It has not been made clear by the RP during the hearing that when sufficient provisions are available in the IBC especially under Sections 19, 66 and 74 of IBC to deal with the situations of non-cooperation by the Suspended Management to the RP in completion of CIRP, fraudulent trading or wrongful trading, if any, during Corporate Insolvency Resolution Process or a Liquidation Process, and Punishment for Contravention of Moratorium provisions of Section 14 of IBC then why he had filed FIR on 23.04.2020 with Margherita, Police Station. The Production of the Unit is closed in the month of July, 2020.
# 5. Moreover, the RP had filed an Application under Section 19 of IBC and this Bench had passed order on 20.05.2020 inter alia directed the directors of the suspended board of the CD
“to refund the amount withdrawn less the amount if any paid to the alleged supplier as the cost of raw materials subject to the satisfaction of the RP with sufficient proof of payment during the CIRP period, within two weeks of receipt of this order. Failing which the IRP can move an application for contempt...”
# 6. Now the CIRP has already been completed and Resolution Plan is submitted before this Bench for approval.
# 7. Suspended management has cooperated in the process of CIRP and Rs 32,50,000.00 has been already refunded to the Account of CD in compliance with the order of Hon’ble Supreme Court dated 22.04.2021 passed in the Criminal Appeal No. 447 of 2021 arising out of SLP. (Crl.) No. 1549 of 2021 and the order dated 07.10.2021 passed in IA 32 of 2021 by this tribunal.
# 8. The RP is directed to take steps in accordance with the provisions of the IBC, to ensure that the Unit starts functioning without further loss of time.
# 9. Hence, this Cont. Application No. 1/2021 in CP (IB)/09/GB/2019 is disposed of with the above Observations and Direction.
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Blogger’s comments; RP is not competent to file FIR & to file complaint with NCLT, under section 74 of the Code.
# Section 236. Trial of offences by Special Court. -
(1) Notwithstanding anything in the Code of Criminal Procedure, 1973(2 of 1974), offences under of this Code shall be tried by the Special Court established under Chapter XXVIII of the Companies Act, 2013 (18 of 2013).
(2) No Court shall take cognizance of any offence punishable under this Act, save on a complaint made by the Board or the Central Government or any person authorised by the Central Government in this behalf.
(3) The provisions of the Code of Criminal Procedure, 1973 shall apply to the proceedings before a Special Court and for the purposes of the said provisions, the Special Court shall be deemed to be a Court of Session and the person conducting a prosecution before a Special Court shall be deemed to be a Public Prosecutor.
(4) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, in case of a complaint under sub-section (2), the presence of the person authorised by the Central Government or the Board before the Court trying the offences shall not be necessary unless the Court requires his personal attendance at the trial.
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