NCLT Kolkata (2026.02.03) in Tulip Suppliers Private Limited vs Sabina Rungta & Ors. [I.A. (IB) No. 1676/KB/2025 In Company Petition (IB) No. 59/KB/2024] held that;
In the view of above, to meet the ends of justice and in public interest in terms of Section 70 of the I&B Code, read with Section 213 and 212 of the Companies Act, 2013, read with Rule 11 of the NCLT Rules, by applying our inherent power, we deem fit to refer the matter to the Regional Director, Eastern Region, MCA, Kolkata to conduct an independent and fair investigation into the affairs of all companies held by Shri K.K Rungata, Shri Manish Rungta, Shri Asish Rungta and Smita Jain mention at point 3 (3.6 and 3.7) of the order by the Serious Fraud Investigation Office (SFIO) or any other government agency, as may be deemed fit in accordance with law.
Excerpts of the Order;
1. This Court congregated through a hybrid mode.
2. Heard the Learned Counsels for both parties.
3. FACTS OF THE CASE
3.1 The Corporate Insolvency Resolution Process of Tirupathi Properties and Investment Private Limited was initiated by order dated 13.08.2024, and the Resolution Plan submitted by the Applicant was approved by this Adjudicating Authority on 13.05.2025.
3.2 That pursuant to approval of the Resolution Plan, the Applicant has already paid a sum of Rs. 20,81,07,723/- (including EMD and CIRP costs) towards implementation of the plan, out of the total resolution amount of Rs. 25 Crores.
3.3 The Alipore property is the only fixed asset of the Corporate Debtor and forms the core basis of the approved Resolution Plan. Despite approval of the plan and substantial payments, possession of the said property has not been handed over to the Applicant.
3.4 The Respondent Nos. 1 to 5 are in occupation of the property without any registered title, tenancy, lease, licence, or lawful authority, and their claim based on an alleged family settlement is legally untenable in the absence of a registered conveyance.
3.5 That the Respondent Nos. 1 and 2 have filed I.A. No. 1011/KB/2025, inter alia seeking recall of the CIRP order and setting aside of the approved Resolution Plan, pursuant to which interim orders dated 07.07.2025 and 30.07.2025 were passed, effectively stalling implementation of the Resolution Plan.
3.6 During the pendency of the arbitration proceedings, the Learned Sole Arbitrator passed interim orders directing maintenance of status quo with respect to the shareholding, management and affairs of TPIPL, which orders continue to remain binding and in force. Under the family arrangement governing the parties, the division of properties and business interests was clearly demarcated.
3.7 The companies falling to the share of Shri K.K. Rungta include Surya Alloy Industries Limited (Barjora, Phase-IV), Bengal General Trading Co. Private Limited, Bhaskar Properties Private Limited, Whitestone Consultants Private Limited, Tulsyan & Sons Private Limited and Bhaskar Forgings Private Limited. The companies allotted to Shri Manish Rungta comprise Surya Alloy Industries Limited (Phase-III- Ferro Division), Surya Alloy Industries Limited (Durgapur), Surya Alloy Industries Limited (Meghalaya). Bhaskar Shrachi Alloys Limited, Tirumala Balaji Alloys Private Limited, Parth Ispat (India) Private Limited, Bhaskar Wires Private Limited and Bhaskar Ispat Private Limited. The companies forming part of the share of Shri Ashish Rungta include Surya Alloy Industries Limited (Barjora, Phase-1 and II), MAK Engineering Industries Limited, Manash Forgings Private Limited and Bhaskar Industrial Developments Limited. smita Jain - Radiant.
4. Submission of the Applicant:
4.1 It is submitted that upon approval of the Resolution Plan under Section 31 of the Insolvency and Bankruptcy Code, 2016, the Applicant steps into the shoes of the Corporate Debtor and is entitled to all its assets,including the Alipore property.
4.2 It is contended that shareholders or family members of shareholders do not acquire ownership rights over company assets, and Respondent Nos. 1 to 5 cannot claim possession merely on the basis of erstwhile shareholding or alleged family arrangements.
4.3 It is further submitted that the IBC is a special legislation with a non-obstante clause, and delay in implementation of an approved Resolution Plan defeats the very object of the Code, which mandates time-bound resolution.
4.4 It is claimed that unless possession of the property is handed over forthwith, or alternatively the Respondents are directed to deposit the equivalent amount paid under the Resolution Plan, the plan would stand frustrated, causing irreparable loss to the Applicant as well as to the creditors.
4.5 It is further submitted that the balance of convenience lies entirely in favour of the Applicant, who has already parted with substantial funds,while the Respondents continue to enjoy the property without paying a single penny.
5. Submission of the Respondents:
5.1 5.1 It is submitted that the present application has been deliberately filed with a mala fide and ulterior intent to obtain physical possession of the Alipore residential property by bypassing the pending adjudication inI.A. (IB) No. 1011/KB/2025, wherein the very foundation of the CIRP and the approval of the Resolution Plan have been seriously questioned on grounds of fraud, collusion, and abuse of the insolvency process.
5.2 It is contended that the Applicant has consciously invoked the summary jurisdiction of this Hon’ble Tribunal to secure indirectly what it cannot obtain directly, namely, eviction of Respondent Nos. 1 to 5, despite the Resolution Plan itself being under challenge and despite subsisting interim orders protecting the status quo.
5.3 It is claimed that the Corporate Insolvency Resolution Process was fraudulently initiated at the behest of the alleged Financial Creditor in collusion with the IRP/RP, the suspended Board of Directors, and other related entities, with the sole objective of depriving Respondent Nos. 1 to 5 of their lawful and settled rights in the Alipore property.
5.4 It is further submitted that the Corporate Debtor admittedly never carried on any commercial business and owned only a single residential bungalow at Alipore, which has been the family residence of the Rungta family for several decades, and the invocation of the IBC machinery was never intended for resolution of insolvency but only for illegal takeover of
the said residential property.
5.5 It is contended that the Alipore property is not a free, vacant, or unencumbered asset of the Corporate Debtor as falsely alleged by the Applicant, but is subject to long-standing family arrangements,settlements, and understandings, pursuant to which Respondent Nos. 1
to 5 have been residing in the said property in their own independent right.
5.6 It is claimed that Respondent Nos. 1 to 5 have been in peaceful,continuous, and settled possession of the Alipore property for several years,openly and without objection from any quarter, much prior to initiation of the CIRP, and therefore cannot be branded as trespassers or illegal occupants.
5.7 It is submitted that the possession of Respondent Nos. 1 to 5 is protected in law, and their independent civil and proprietary rights cannot be extinguished or adjudicated upon in summary proceedings under theInsolvency and Bankruptcy Code, 2016.
5.8 It is further submitted that the Information Memorandum prepared by the Resolution Professional categorically records the existence of occupants/tenants in the Alipore property, thereby acknowledging that the property was never vacant or free from third-party possession.
5.9 It is contended that the Applicant was fully aware, at the time of submission of the Resolution Plan, of the factual position regarding occupation of the property and consciously chose to proceed with the Plan despite such knowledge.
5.10 It is claimed that having accepted the property with full awareness of existing possession, the Applicant is now estopped from seeking summary eviction of Respondent Nos. 1 to 5 by invoking the insolvency forum.
5.11 It is submitted that the Resolution Plan approved on 13.05.2025 is under active challenge in I.A. (IB) No. 1011/KB/2025, which has been filed inter alia under Section 65 of the IBC alleging fraudulent initiation and conduct of the CIRP.
5.12 It is further submitted that upon contest, this Hon’ble Tribunal was pleased to pass interim orders on 07.07.2025 and 30.07.2025 directing maintenance of status quo and restraining actions that would cause irreversible prejudice to the Respondents.
5.13 It is contended that permitting handover of possession or granting police assistance at this stage would render the pending application infructuous and would amount to granting final reliefs to the Applicant without adjudicating the allegations of fraud.
5.14 It is claimed that in I.A. (IB) No. 1011/KB/2025, it has been conclusively demonstrated through documentary evidence that Tulip, the Successful Resolution Applicant, is merely an alter ego of Mr. K.K. Rungtaand Mr. Ashish Rungta.
5.15 It is submitted that Tulip was pre-selected and engineered to extend monies to the Corporate Debtor, despite the Corporate Debtor having no business operations, with the predetermined objective of submitting a Resolution Plan and acquiring control over the residential bungalow.
5.16 It is further submitted that the Resolution Plan is the product of a well-orchestrated circular routing of funds through shell entities,designed to give an illusion of compliance while ensuring that no real consideration flows into the Corporate Debtor.
5.17 It is contended that such transactions warrant investigation by theSerious Fraud Investigation Office, a relief which has been specifically sought in I.A. (IB) No. 1011/KB/2025.
5.18 It is claimed that the ultimate objective behind the fraudulent CIRP andResolution Plan is to illegally evict the occupants of the Alipore residential bungalow, notwithstanding settled judicial precedent that eviction clauses affecting third-party rights in a Resolution Plan are impermissible.
5.19 It is submitted that granting coercive reliefs including police assistance would amount to enforcing an illegal eviction through the insolvency forum,which is neither contemplated nor permitted under the IBC.
5.20 It is further submitted that entertaining such reliefs would put a premium on fraud and encourage litigants to misuse the insolvency framework to dispossess persons asserting legitimate civil rights.
5.21 It is contended that it remains wholly unexplained how Mr. K.K. Rungta,promoter and director of the Corporate Debtor, suddenly became a director of Tulip with effect from 02.06.2025, immediately after approval of theResolution Plan.
5.22 It is claimed that Tulip’s own balance sheets reveal that its entire asset base is parked exclusively in companies controlled by Mr. K.K.Rungta and Mr. Ashish Rungta, conclusively establishing their deep nexus.
5.23 It is submitted that after the matter was mentioned before this Hon’bleTribunal on 23.06.2025, 24.06.2025, and 25.06.2025, a hurried removal of Mr. K.K. Rungta from Tulip’s Board was orchestrated to avoid judicial scrutiny.
5.24 It is further submitted that the Form DIR-12, though filed on 24.06.2025, was falsely given retrospective effect from 10.06.2025, clearly to mislead this Hon’ble Tribunal and suppress material facts.
6. Analysis and Findings
6.1 The matter was taken up for hearing on a day-to-day basis and was heard on 11.12.2025 and 13.01.2026.
6.2 Learned Counsel appearing for the Applicants, Learned Counsel for the Resolution Professional, Learned Counsel for the Financial Creditor, Successful Resolution Applicant and other Respondents were present.
6.3 The Applicants have filed the present application under Sections 60(5) and 65 of the Insolvency and Bankruptcy Code, 2016 read with Rule 11 of the NCLT Rules, 2016, inter alia alleging abuse of the insolvency process, suppression of material facts, collusive initiation of CIRP and fraudulent conduct by the Petitioner as well as Respondent entities.
6.4 Upon a prima facie examination of the pleadings, documents placed on record and the sequence of events leading to initiation, conduct and culmination of the CIRP, this Tribunal finds that serious allegations of fraud, collusion and fabrication of financial transactions have been raised, which go to the root of the insolvency proceedings. It appears, at this stage, that the CIRP may not have been initiated for resolution of insolvency but for purposes other than those contemplated under the IBC, including creation of an artificial debt, circular movement of funds, suppression of pending arbitral proceedings and family settlement arrangements, and possible misuse of corporate structures to gain control over valuable immovable properties.
6.5 It is observed that the allegations raised in the present proceedings disclose a prima facie pattern of complex financial structuring, circular routing of funds through multiple group and shell entities, manipulation of corporate control, suppression of material facts relating to pending arbitral proceedings and family settlement arrangements, and possible creation of an artificial debt with the object of misusing the Corporate Insolvency Resolution Process to acquire valuable immovable property. Such allegations, by their very nature, transcend the limited fact-finding jurisdiction of this Adjudicating Authority and require a specialised, in-depth forensic investigation into corporate affairs, financial transactions and inter-se relationships between entities and individuals, which can be effectively undertaken only by an expert statutory agency like the Serious Fraud Investigation Office.
6.6 It is therefore directed that:
a. In the view of above, to meet the ends of justice and in public interest in terms of Section 70 of the I&B Code, read with Section 213 and 212 of the Companies Act, 2013, read with Rule 11 of the NCLT Rules, by applying our inherent power, we deem fit to refer the matter to the Regional Director, Eastern Region, MCA, Kolkata to conduct an independent and fair investigation into the affairs of all companies held by Shri K.K Rungata, Shri Manish Rungta, Shri Asish Rungta and Smita Jain mention at point 3 (3.6 and 3.7) of the order by the Serious Fraud Investigation Office (SFIO) or any other government agency, as may be deemed fit in accordance with law.
b. In view of the serious allegations requiring detailed investigation and the direction issued herein for an independent inquiry by the appropriate authority, we clarify that the present order is purely interim in nature. The rights and contentions of all parties are kept open. Final adjudication of the issues raised in the present application, including the reliefs sought by the Applicant as well as the objections raised by the Respondents, shall be undertaken after receipt of the report from the Serious Fraud Investigation Office (SFIO) or such other agency as may be appointed, and upon further hearing of the parties. The final order shall accordingly be pronounced after due consideration of the findings of the investigating agency.
c. It is further directed, in I.A. (IB) No. 1676/KB/2025, that the Serious Fraud Investigation Office (SFIO) shall complete the investigation and submit its report before this Adjudicating Authority within a period of three months from the date of receipt of a copy of this Order.
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