Bijay Kumar Garodia & Ors vs Anadya Properties Pvt. Ltd. & Ors
- CitationCompany Appeal (AT) (Insolvency) No. 569 of 2018
Ratio decidendi
The rule this decision rests on
Where a moratorium order has been passed under the insolvency law against a corporate debtor, it takes effect from the date of the order and not from the date of its later public notification, so that payments made by the corporate debtor after that date are subject to the moratorium. During the moratorium period, the corporate debtor is under the control of the Resolution Professional, and its suspended Board of Directors has no authority to divert the corporate debtor's funds to creditors; a transfer of funds to creditors in that period is illegal and the creditors may be directed to refund the amount to the corporate debtor.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Bijay Kumar Garodia & Ors. ...Appellants
Vs
Anadya Properties Pvt. Ltd. & Ors. ....Respondents
Present: For Appellants: Ms. Anne Mathew, Advocate. For Respondents: ORDER
20.09.2018: This appeal has been preferred by three creditors against order dated 24th August, 2018 passed by the Adjudicating Authority (National Company Law Tribunal), Kolkata Bench, Kolkata, whereby the Adjudicating Authority directed the Appellant to pay back the sum to the Corporate Debtor, which was paid to them after the order of moratorium.
2. Learned counsel appearing on behalf of the Appellant submits that the order of moratorium was passed on 15th January, 2018 and it was notified in newspaper on 22nd January, 2018. Person having no knowledge of the interim order creditors were paid part dues by the Corporate Debtor.
3. Such submission made by learned counsel for the Appellant is not acceptable as the order of moratorium was passed by the Adjudicating Authority after hearing the Corporate Debtor. After passing said order it came in effect from the same date i.e. 15th January, 2018. Therefore, the Corporate Debtor being under the control of the Resolution Professional, the (Suspended) Board of Directors had no jurisdiction to divert funds to the creditors. Such transfer of funds, during the period of moratorium, in favour of the Creditors namely Mr. Bijay Kumar Garodia, Mr. Nishant Garodia and Mr. Ram Goapal Garodia being illegal, the Adjudicating Authority rightly directed them to refund the amount.
-2- 4. We find no merit in this appeal. It is dismissed. The appellants are directed to refund the amount immediately to the Corporate Debtor, not beyond 30 days, failing which it will be open to the Resolution Professional to move before the Adjudicating Authority for initiating contempt proceeding. The appeal is dismissed with aforesaid observations.
[Justice S. J. Mukhopadhaya] Chairperson
[Justice Bansi Lal Bhat] Member (Judicial) am/uk
Company Appeal (AT) (Insolvency) No. 569 of 2018
This page reproduces a public judgment and a summary of it. It is research material, not legal advice, and it is no substitute for advice from an advocate on your own facts.
Research this judgment with Miss Lucy
Ask what it holds, what has followed it, and what it means for your matter — in plain English, with the citations.
Try Miss Lucy free