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Mr. Kishore K. Avarsekar & Anr vs Alok Saksena on 11 December, 2025 cites

Phoenix Arc Private Limited vs Spade Financial Services Limited on 1 February, 2021

99. The Hon'ble Supreme Court in Phoenix Arc Private Limited v. Spade Financial Services Limited (2021) 3 SCC 475, has held that for recovering from fraudulent transactions, the Adjudicating Authority can pass an order for recovery as contribution to the assets of Corporate Debtor. The Appellants were managing directors of Corporate Debtor and they were running day to day affairs, therefore liable for the transactions which are held by the Adjudicating Authority prima facie fraudulent in nature, in the Impugned Order. The Respondent filed the M.A. No. 423 of 2020 after examining that only a miniscule purchase of Rs.6.52 crores were reflected in the book of accounts of the Corporate Debtor, while a sum of Rs. 1643.33 crores were issued by Corporate Debtor to Magnum without any supporting purchase document. An amount of Rs. 1454.62 crores had been received back from Magnum in circular transaction. No interest was levied and repaid on such sum being accommodated by Magnum, thus even after adjustment, a sum of Rs. 225 Crores was still recoverable from Magnum, and after considering that the purchases were not genuine, the Adjudicating Authority has arrived at liability of Appellants at Rs. 231.64 Crores. This observation is also corroborated by the Forensic Audit Report, which identified certain transactions carried out by Corporate Debtor and Magnum. Thus, it is clear that there was an intention to defraud the creditors by carrying out round-tripping transactions with Magnum to reduce the assets of the Corporate Debtor. The sum paid to Magnum amounted to 72% of the amount provided by Corporate Debtor, to various entities. Page 36 of 40 Thus, it is untenable to state that Appellants, despite being Managing Directors had no role in carrying out such fraudulent transactions.
Supreme Court of India Cites 32 - Cited by 49 - D Y Chandrachud - Full Document
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