National Company Law Appellate Tribunal
Bhavik Bhimjyani vs Uday Vinodchandra Shah (Rp Of Neelkanth ... on 6 December, 2018
NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
Company Appeal (AT) (Insolvency) No. 182 of 2018
IN THE MATTER OF:
Bhavik Bhimjyani ...Appellant
Vs
Uday Vinodchandra Shah, RP of
Neelkanth Township & Construction Pvt. Ltd. & Ors. ....Respondents
Present:
For Appellant: Mr. Darpan Wadhwa, Sr. Advocate with Mr. Kush
Chaturvedi, Mr. Aman Varma, Ms. Smriti
Churiwal and Ms. Chaitrika Patki, Advocates.
For Respondents: Mr. Arun Kathpalia, Sr. Advocate with
Mr. Abhishek Anand, Advocate for R-1 (RP).
Mr. Sidharth Samantray and Mr. Anuj Sarma,
Advocates for R- 2
ORDER
06.12.2018: The Appellant, a shareholder/ex-director has preferred this appeal against order dated 26th April, 2018 passed by the Adjudicating Authority (National Company Law Tribunal) Mumbai Bench wherein the Adjudicating Authority made following observations and passed following directions:-
"9. On examination of the records of the company, it appears that advances given to these entities aggregating to more than ₹30 crores which is appearing in page No. 66 of this application. By correspondence made by R1, we are prima facie of the view that the promoter/director is hiding information from the Resolution professional as to ensure that the transaction entered into with the related companies; its subsidiaries and third parties are not shown as receivables/debts payable to the Corporate Debtor, in view of the same, R1 is hereby directed to furnish the documents that -2- this applicant has sought in the e-mail dated 02.04.2018, which is annexed as Exhibit R to this application within 7 days hereof, failing which this Applicant is at liberty to approach this Bench for further directions."
2. Learned counsel appearing on behalf of the Resolution Professional in reply affidavit dated 18th September, 2018 brought on record the a Chart to suggest the documents required by the Resolution Professional and the documents already provided by the Appellant, also showing why Resolution Professional requires those items. The chart is extracted below:-
S.no. Documents required Documents provided to Reason as to why the RP by the RP the RP requires them A) Advances made by the Corporate Debtor to Lighthouse Developers Pvt. Ltd. for advancing a sum of Rs.5,27,00,000/-
1 Memorandum of Minutes of the Board The Corporate Debtor has Understanding dated Meeting dated 6th January advanced a sum of 6 th January 2015 2015 reproducing the Rs.5,27,00,000/- to ("MOU") executed by contents of the MOU and Lighthouse Developers the Corporate Debtor approving the execution of from the finances raised and Lighthouse the said MOU. from the Financial Creditor Developers. But, the SIGNED MOU is but the Corporate Debtor neither annexed to the has taking no steps said minutes of the whatsoever to recover the meeting nor handed over aforesaid amount to the RP. advanced to Lighthouse 2 Corporate Debtor's Bank Statements of the Developer. Bank Statement Corporate Debtor It is pertinent to note that showing the advance pertaining to the period Mr. Bhavik Bhimjyani and given to Lighthouse when the said advances his family hold Developers Private were made to Lighthouse approximately 60% stake Limited Developers have not been in Lighthouse Developers handed over to the RP. The Private Limited and that RP is in possession of the Mr. Bhavik Bhimjyani was Corporate Debtor's bank a director in Lighthouse statements from 10th Developers till October'17.
August 2015 onwards. Further, Lighthouse
Developers and the
Corporate Debtor share the
same registered address.
Company Appeal (AT) (Insolvency) No. 182 of 2018 -3- 3 Balance Confirmation The RP by its email dated Statement from 21st February 2018 has Lighthouse called upon Lighthouse Developers and Developers to confirm the Financial Statement outstanding amount due and payable by it to the Corporate Debtor as well as for certain supporting documents to be provided to the RP for the same. Till date, No Response has been received from Lighthouse Developers Private Limited.
B) Advances made to Bhagirathi Padte, Levi Bonkar, Mahesh Raukar, Manisha Korde, Prashant Garud and Sunder Padte 1 Ledger Copies of each The advances made by the The Corporate Debtor advance made to the Corporate Debtor to the has advanced a sum of aforesaid individuals, said persons pertains to a Rs.61 lakhs to the said from the date of period much prior to the persons from the funds advance till date. period for which raised from the documents were handed Financial Creditor.
2 Personal Details of the over by the Mr. Bhavik However, till date, the aforesaid persons to Bhimjyani to the RP. No. Corporate Debtor has whom the said Documents/explanation recovered the said sums advances have been has been provided by Mr. advanced.
made.
Bhavik Bhimjyani for
3 Latest Status of these making these advances
Advances. except that the said
4 Reasons as to why the advances made are old and
Corporate Debtor that the same are not
never recovered the recoverable.
said advances from
the aforesaid persons.
5 Details of the Land for
which these said
advance were made
6 Board resolutions
authorizing the
Corporate Debtor to
make the said
advances.
Company Appeal (AT) (Insolvency) No. 182 of 2018 -4- C) Wholly Owned Subsidiaries - Urban Rupi Infrastructure Private Limited and Neelkanth Palm Realty Private Limited 1 Incorporation The Corporate Debtor has The Wholly owned Documents of the raised Rs.51 crores from subsidiaries of the aforesaid wholly the Financial Creditor out Corporate Debtor hold owned subsidiaries. of which a sum of Rs.30.95 assets acquired directly crores has been advanced through the funds 2 Filings made with the to these 2 wholly owned received and raised by ROC during the last 2 subsidiaries for purchasing its Parent Company, i.e. financial years. of approximately 50 acres the Corporate Debtor, of land in the same of from the Financial 3 Minutes of the Board project admeasuring Creditor. In order, to Meetings held in the approximately of 80 acres, safeguard the assets of last two years and in which the remaining 30 the Corporate Debtor, it minutes of the Annual acres stands in the name of is imperative that the RP General Meeting held the Corporate Debtor. takes over the control of 4 Signed Financial Further, the land the wholly owned Statement for the last purchased in the name of subsidiaries of the 3 years the Corporate Debtor is Corporate Debtor.
from the funds raised from
5 Trial Balance as on the Financial Creditor
date itself. The subsidiaries are
wholly owned and do not
6 Original Land Records have any operations
whatsoever except that
7 Bank Statements for they have taken a loan from
last two years the Corporate Debtor for
purchasing the said lands.
8 Details of Legal Cases, No Documents pertaining
if any to the WHOLLY OWNED
subsidiaries have
D)Any other documents as required by the Resolution Professional on orders of this Honourable Tribunal
3. Reply affidavit has been filed by the Appellant. Learned senior counsel appearing on behalf of the Appellant submits that signed copy of Memorandum of Understanding (MOU) dated 6th January, 2015 executed by Corporate Debtor and 'Lighthouse Developers' is not available with the Appellant. Whatever document were available have already handed over to the Resolution Company Appeal (AT) (Insolvency) No. 182 of 2018 -5- Professional, rest of the documents may be lying with the other Directors. In so far as Item No. 2 and 3 of Clause (A) regarding advance payment made by the Corporate Debtor to 'Lighthouse Developers' and balance confirmation statement from 'Lighthouse Developers' and financial statement as shown in the Chart are concerned, learned senior counsel appearing on behalf of Resolution Professional submits that those documents have already been received from the Bank.
4. In so far as advances made to Bhagirathi Pate, Levi Bonkar, Mahesh Raukar, Manisha Korde, Prashant Garud and Sunder Padte are concerned learned senior counsel for the Appellant submits that whatever documents were available with him have already been handed over to the Resolution Professional. He further submits that he Appellant will cooperate with the Resolution Professional to trace rest of the documents from the persons who had already received advances.
5. In so far as Clause (C) i.e. documents relates to subsidiaries - 'Urban Rupi Infrastructure Private Limited' and 'Neelkanth Palm Realty Private Limited', learned senior counsel appearing on behalf of the Appellant submitted that the Appellant will provide all the documents. However, he submits that thought the Resolution Professional may take the copies of the records of the flats but cannot take over the subsidiaries in question without any direction of a court of competent jurisdiction or Adjudicating Authority.
6. Learned senior counsel appearing on behalf of the Resolution Professional submits that the Corporate Debtor has been ordered for liquidation and now the Resolution Professional is functioning as Liquidator. He intends to protect all the assets of the Corporate Debtor including the records as detailed in the Chart.
Company Appeal (AT) (Insolvency) No. 182 of 2018 -6-
7. In the circumstances, we direct the Appellant to allow the Liquidator to inspect the records of 'Urban Rupi Infrastructure Private Limited' and 'Neelkanth Palm Realty Private Limited' to trace out if any of the records of the Corporate Debtor are available therein or records as mentioned in the Chart extracted above. If any of the record of the Subsidiary Company related with the Corporate Debtor as recorded in the chart aforesaid is traced, the Appellant will hand over the copies of same to the Resolution Professional/ Liquidator.
8. We make it clear that the Resolution Professional/ Liquidator has no jurisdiction to take over any asset of the subsidiary company of the Corporate Debtor including 'Urban Rupi Infrastructure Private Limited' and 'Neelkanth Palm Realty Private Limited', therefore, the Resolution Professional cannot take the original documents available with the subsidiary companies though he may take authenticated photocopies of those documents.
8. Part of the impugned order dated 26th April, 2018 wherein observation has been made against the Appellant is set aside and stands modified to this effect. The appeal is disposed of with aforesaid observations and directions.
[Justice S. J. Mukhopadhaya] Chairperson [Justice Bansi Lal Bhat] Member (Judicial) am/sk Company Appeal (AT) (Insolvency) No. 182 of 2018