Deepak Parasuraman And Anr vs Sripriya Kumar Anr

[Arising out of order dated 01.02.2020 in MA/987/2019 in IBA/330/2019 passed by the Adjudicating Authority (National Company Law Tribunal), Special Bench, Chennai]

IN THE MATTER OF: 1. Deepak Parasuraman Designated Partner of Ingenium Advisory LLP No. 2, LIC Colony, 2nd Cross Street Dr. Radhakrishnan Nagar, Thiruvanmiyur Chennai - 600041. 2. Ingenium Advisory LLP 13 Akila Nagar West Kodala Pattai Thiruvanai Kovil, Srirangam, Trichy - 620005. .... Appellants.

Versus

1. Sripriya Kumar, Resolution Professional Perfect International Fabricators Private Limited B6/A8 Gems Court, 14, Khader Nawaz Khan Road, Sriramapuram, Thousand Lights West, Nungambakkam, Chennai, Tamil Nadu - 600006. 2. P R Venkatesh Promoter Managing Director 13 Akila Nagar, West Kodala Pattai, Thiruvanai Kovi, Srirangam, 2

Tiruchy-620005. .... Respondents.

Present:

For Appellant: Mr. Gaurav Mitra, Sr. Advocate alongwith Mr. Akshat Singh and Mr. Bhanu Gupta, Advocates.

For Respondents: Mr. Vijay Kumar, Advocate for IRP/R-1. Mr. Mohit D. Ram, Advocate for R-1. Mr. Goutham Shivshankar, Advocate for R-2.

JUDGMENT

(21st September, 2021)

Justice Anant Bijay Singh;

This Appeal has been preferred by the Appellants namely Deepak

Parasuraman and Ingenium Advisory LLP both are aggrieved and dissatisfied

by the order dated 01.02.2020 in MA/987/2019 in IBA/330/2019 passed by

the Ld. Adjudicating Authority (National Company Law Tribunal), Special

Bench, Chennai whereby and where under the Ld. Adjudicating Authority

(National Company Law Tribunal) Special Bench, Chennai has allowed the

MA No. 987/2019 filed by the Resolution Professional (Respondent No.1

herein) under Section 43 and 66 read with 60(5) of the Insolvency and

Bankruptcy Code, 2016 (for short IBC). The Ld. Adjudicating Authority has

held that the impugned transfer of the Corporate Debtor funds to Respondent

No. 1 (Appellant No. 2 herein) is for fraudulent purpose and further directed

to Respondent No. 2 (Appellant No. 1 herein) and Respondent No. 3

(Respondent No. 2 herein) jointly and severally to contribute Rs. 65 lacs to the

Corporate Debtor within fifteen days from hereof.

Company Appeal (AT) (Insolvency) No. 349 of 2020 3

2. The facts giving rise to the instant Appeal is as under:

i) That the Appellant No. 2 - 'Ingenium Advisory LLP' is incorporated as a

Limited Liability Partnership Firm registered under the LLP Act, 2008 for

carrying on the business of providing business consultancy, global

management consulting, advisory services, corporate restructuring and

financial advisory.

ii) That the Appellant No. 1 - 'Deepak Parasuraman' is the Designated

Partner of Appellant No. 2.

iii) That the Corporate Debtor -'Perfect International Private Limited' and

the Appellant No. 2 entered into two Agreements dated 12.10.2015 (Annexure

A-2 at page 58 to 61 of the Appeal Paper Book) and 16.08.2016 (Annexure A-

3 at page 62 to 65 of the Appeal Paper Book) respectively. As per the

Agreement dated 12.10.2015, the Appellant No. 2 agreed to provide consulting

on business and restructuring on behalf of the Corporate Debtor that included

arranging for Long Term and Working Capital Debt for the Corporate Debtor.

For its services, the Appellant No. 2 agreed to charge 3% commission fee on

the loan amount raised, out of which, Rs. 5 Lacs was required to be paid in

advance for facilitating the arrangement.

iv) Further case is that the Corporate Debtor and the Appellant No. 2

herein entered into another agreement dated 16.08.2016 wherein the

Appellant No. 2 was required to facilitate the procurement of purchase

order/supply contract from windmill manufacturing companies for supply of

tubular steel towers of the Corporate Debtor and as per Clause 3.2 of the said

contract, the Appellant No. 2 was entitled to receive 5.5% commission on the

Company Appeal (AT) (Insolvency) No. 349 of 2020 4

amount of the purchase orders and Rs. 5 Lacs towards travelling, legal and

other expenses.

v) Further case is that pursuant to the Agreement dated 16.08.2016, the

Appellant herein facilitated a meeting between a potential buyer and the

Corporate Debtor. Subsequent to the facilitation of the meeting by the

Appellant, the meeting of the Corporate Debtor with a potential buyer (M/s

Regen Powertech Private Limited) was finalized in the first week of December

2016. As per the contract dated 16.08.2016 the Appellant No. 2 was entitled

to get commission @ 5.5% on this purchase deal which amounted to Rs.

52,25,000/- and Rs. 5,00,000/- towards travelling, legal and other expenses,

thereby amounting to Rs. 57,25,000/-.

vi) The Corporate Debtor made the first tranche of payment on 19.12.2016

of Rs. 25,00,000/- including the advance of Rs. 5,00,000/- as a part payment

of the initial contract of 2015 for facilitation of securing long term working

capital loan for the Corporate Debtor.

vii) The Appellant No. 2 fulfilled the contract dated 16.08.2016 by getting

the purchase order from M/s Regen Powertech Private Limited for the value

of Rs. 9,50,00,000/-.

viii) The Appellant No. 2 fulfilled the Agreement dated 12.10.2015 as part of

Business Restructuring and Consulting by way of getting the loan sanctioned

from SREI Equipment Finance Limited on behalf of the Corporate Debtor for

Rs. 3,00,00,000/- in June 2017.

Company Appeal (AT) (Insolvency) No. 349 of 2020 5

ix) Further case is that the Corporate Debtor released the second tranche

of payment of Rs. 30,00,000/- to the Appellant No. 2 which included Rs.

4,00,000/- as balance commission amount for arranging the long term

working capital loan from SREI Equipment Finance Limited and Rs.

26,00,000/- as part of commission for getting business order from M/s Regen

Powertech Private Limited.

x) That on 31.03.2018, the Corporate debtor released the third tranche

of payment amounting to Rs. 10,00,000/- as balance commission amount for

getting business order from M/s Regen Powertech Private Limited.

xi) That the transactions amounting to Rs. 65 Lacs have been received by

the Appellant No. 2 from the Corporate Debtor in three tranches.

xii) The Ld. Adjudicating Authority vide order dated 29.04.2019 admitted

the company petition bearing no. IBA/330/2019 as contained in Annexure A-

6 (at page 74 of the Appeal Paper Book) on an Application under Section 9 of

the Insolvency and Bankruptcy Code, 2016 filed by M/s Jotun India Private

Limited - 'Operational Creditor' and Respondent No. 1 herein - Sripriya

Kumar appointed as IRP on the aforesaid date.

xiii) Further case is that on 04.09.2019 the Respondent No. 1 herein

preferred an Application bearing no. MA/987/2019 before the Adjudicating

Authority under Section 43 and 66 of the Insolvency and Bankruptcy Code,

2016 alleging the transfer of payments made by the Corporate Debtor to

Appellant No. 2 on 19.12.2016, 26.06.2017 and 31.03.2018 as part of

ordinary course of business to be preferential and fraudulent in nature.

Company Appeal (AT) (Insolvency) No. 349 of 2020 6

Thereafter, the Adjudicating Authority after hearing the parities passed the

impugned order. Hence this Appeal.

Submissions on behalf of the Appellants

3. The Learned Sr. Counsel for the Appellants during the course of

argument and memo of Appeal as also Rejoinder, assailing the impugned

order submitted that there existed valid communications between the parties

in the form of Agreements dated 12.10.2015 (Annexure A-2 at page 58 to 61

of the Appeal Paper Book) and 16.08.2016 (Annexure A-3 at page 62 to 65 of

the Appeal Paper Book) respectively. The said communications cannot be

disregarded without going into the merits of the letters.

4. It is further submitted that as per the Agreement dated 12.10.2015,

the Appellant No. 2 agreed to provide consulting on business and

restructuring on behalf of the Corporate Debtor that included arranging for

Long Term and Working Capital Debt for the Corporate Debtor. For its

services, the Appellant No. 2 agreed to charge 3% commission fee on the loan

amount raised, out of which, Rs. 5 Lacs was required to be paid in advance

for facilitating the arrangement.

5. It is further submitted that the Corporate Debtor and the Appellant No.

2 herein entered into another agreement dated 16.08.2016 wherein the

Appellant No. 2 was required to facilitate the procurement of purchase

order/supply contract from windmill manufacturing companies for supply of

tubular steel towers of the Corporate Debtor and as per Clause 3.2 of the said

contract, the Appellant No. 2 was entitled to receive 5.5% commission on the

Company Appeal (AT) (Insolvency) No. 349 of 2020 7

amount of the purchase orders and Rs. 5 Lacs towards travelling, legal and

other expenses.

6. It is further submitted that pursuant to the Agreement dated

16.08.2016, the Appellant herein facilitated a meeting between a potential

buyer and the Corporate Debtor. Subsequent to the facilitation of the meeting

by the Appellant, the meeting of the Corporate Debtor with a potential buyer

(M/s Regen Powertech Private Limited) was finalized in the first week of

December 2016. As per the contract dated 16.08.2016 the Appellant No. 2

was entitled to get commission @ 5.5% on this purchase deal which amounted

to Rs. 52,25,000/- and Rs. 5,00,000/- towards travelling, legal and other

expenses, thereby amounting to Rs. 57,25,000/-.

7. It is further submitted that the Corporate Debtor made the first tranche

of payment on 19.12.2016 of Rs. 25,00,000/- including the advance of Rs.

5,00,000/- as a part payment of the initial contract of 2015 for facilitation of

securing long term working capital loan for the Corporate Debtor.

8. It is further submitted that the Ld. Adjudicating failed to appreciate that

the Appellant No. 2 fulfilled the contract dated 16.08.2016 by getting the

purchase order from M/s Regen Powertech Private Limited for the value of Rs.

9,50,00,000/-(Annexure A-4 at page 66 to 68 of the Appeal Paper Book).

9. It is further submitted that the Appellant No. 2 fulfilled the Agreement

dated 12.10.2015 as part of Business Restructuring and Consulting by way

of getting the loan sanctioned from SREI Equipment Finance Limited on

behalf of the Corporate Debtor for Rs. 3,00,00,000/- in June 2017 (Annexure

Company Appeal (AT) (Insolvency) No. 349 of 2020 8

A-5 at page 69 to 73 of the Appeal Paper Book).

10. It is further submitted that the Corporate Debtor released the second

tranche of payment of Rs. 30,00,000/- to the Appellant No. 2 which included

Rs. 4,00,000/- as balance commission amount for arranging the long term

working capital loan from SREI Equipment Finance Limited and Rs.

26,00,000/- as part of commission for getting business order from M/s Regen

Powertech Private Limited.

11. It is further submitted that on 31.03.2018 the Corporate Debtor

released the third tranche of payment amounting to Rs. 10,00,000/- as

balance commission amount for getting business order from M/s Regen

Powertech Private Limited.

12. It is further submitted that the Ld. Adjudicating Authority failed to

appreciate that the total amount of Rs. 65 Lacs have been received by the

Appellant No. 2 from the Corporate Debtor in three tranches on 19.12.2016,

26.06.2017 and 31.03.2018 respectively. Thereafter, Respondent No. 1 herein

preferred an Application bearing no. MA/987/2019 before the Adjudicating

Authority under Section 43 and 66 of the Insolvency and Bankruptcy Code,

2016 alleging the aforesaid transfer of payments made by the Corporate

Debtor as part of ordinary course of business to be preferential and fraudulent

in nature.

13. It is further submitted that the Ld. Adjudicating Authority has failed to

appreciate that to prefer an application under Section 43, the Resolution

Professional is required to be of an opinion that the Corporate Debtor at the

Company Appeal (AT) (Insolvency) No. 349 of 2020 9

relevant time has given a preference in such transaction as laid down in the

Act.

14. It is further submitted that Resolution Professional - Respondent No. 1

herein has formed an opinion against a particular transaction to be

preferential in nature and for the said purpose the Resolution Professional

must have obtained a forensic report or Transaction Audit Report of the

alleged transaction. However, in the present case no such report was obtained

much less filed before the Ld. Adjudicating Authority and in the absence of

any such report, the Resolution Professional has blatantly on the mere look

of it considered the transaction to be preferential and fraudulent.

15. It is further submitted that these facts have not been considered by the

Ld. Adjudicating Authority and without considering all these facts and

provisions of law have erroneously held that these transactions amounting to

Rs. 65 Lacs are fraudulent transactions and passed the impugned order

which cannot be sustained in the eye of law and the impugned order is fit to

be set aside.

Submissions on behalf of the Respondent No. 1

16. The Respondent No. 1 was the Resolution Professional of Corporate

Debtor viz. Perfect International Fabricators Private Limited and is presently

the Liquidator of the Corporate Debtor.

17. The Learned Counsel for the Respondent No. 1 during the course of

argument and his Reply Affidavit as well as Written Submissions submitted

that while reviewing the books of accounts of the Corporate Debtor came

Company Appeal (AT) (Insolvency) No. 349 of 2020 10

across payments made by the Corporate Debtor to the Appellants. The total

payment made is Rs. 65 Lacs and these payments have been made on:

a. 19.12.2016 - Rs. 25,00,000/-

b. 27.06.2017 - Rs. 30,00,000/-

c. 31.03.2018 - Rs. 10,00,000/-

18. It is further submitted that the Respondent No. 2 is Managing Director

and Promoter of the Company. The details of payments were sought from the

Respondent No. 2 there was no response or justification in support of such

payments made to the Appellants. The Appellant No. 2 is a LLP and Appellant

N0. 1 is the Designated Partner of such LLP.

19. It is further submitted that the email was also sent to the mail ID

available of the Appellant No. 2 but no response was received from the

Appellant. Although this fact has been denied by the Appellants in the

Rejoinder.

20. It is further submitted that the books of accounts reflected this money

as advance to the Appellants and there was no response to the queries raised

by the Resolution Professional from Respondent No. 2 and the Appellants

about the nature of such advance, the Respondent No. 1 started making

further enquiry into the matter. During further enquiry, it become clear that:

a. The Office of the Appellant No. 2 is located at the residence of the

Respondent No. 2;

Company Appeal (AT) (Insolvency) No. 349 of 2020 11

b. The Appellants and the Respondent No. 2 have common interest in a

company called as Udveka Engineering Private Limited where Respondent No.

2 and his wife are directors since 22.08.2016 and 26.09.2018 respectively.

The Appellant No. 1 and 2 hold 500 and 9500 equity shares respectively in

Udveka Engineering Pvt. Ltd. with balance 250 shares held by the Respondent

No. 2. Therefore, the Appellants are shareholders and Respondent No. 2 is

Director acting on instructions of the Appellants;

c. No details were disclosed by the Appellants or by the Respondent No. 2

despite repeated requests about the payments and transactions to the

Resolution Professional.

21. It is further submitted that the Appellant No. 2 was incorporated on

12.01.2015 and the Appellant No. 1 and his wife are partners of the Appellant

No. 2 are engaged in investment advisory and business consultancy services.

The payment was made pursuant to two letters of engagement viz. 12.10.2015

and 16.08.2016. The engagement letter dated 12.10.2015 entered between

Respondent No. 2 in personal capacity with Appellant No. 2 wherein Appellant

No. 2 agreed to arrange long term loans within 6 months for a commission of

3% of such loan. The salient terms of the transaction for arrangement of loan

are that:

a. This letter of engagement dated 12.10.2015 is letter of engagement

between the Respondent No. 2 and Appellant No. 2, the Respondent and

Corporate Debtor is not a party to the said engagement;

b. There is no invoice raised by Appellant No. 2 on the Corporate Debtor

Company Appeal (AT) (Insolvency) No. 349 of 2020 12

for such payment;

c. There is no service tax charged for such invoice;

d. There is no TDS deducted by the Corporate Debtor for the payment;

e. This letter of engagement is valid for 6 months from 12.10.2015 and

commission is payable for loans arranged in excess of Rs. 20 crores. Whereas

Respondent No. 1 alleges of having arranged loan of Rs. 3 crores from SREI

to claim its commission, SREI loan was sanctioned on 19.06.2017 whereas

this agreement expired on 11.04.2016;

f. Similarly, apart from arranging loan and receiving commission for the

same, the Appellant alleges that the Appellant obtained purchase order for

benefit of Corporate Debtor from Regen Powertech Private Limited for supply

of wind mill turbines and that commission was paid to Appellant as per letter

of engagement dated 16.08.2016. The Resolution Professional in their reply

pointed out that the said submission is false and these documents have been

produced as an afterthought for the reasons mentioned below;

g. This letter of engagement dated 16.08.2016 is between the Appellant

No. 2 and Respondent No. 2 and Corporate Debtor is not a party to the

transaction;

h. There is no invoice raised by the Appellant No. 2.

i. There is no TDS deducted for payments made by the Corporate debtor

to the Appellant No. 2. Since the value of commission for services is Rs.

54,00,000/- these transactions are liable to service tax for payments made in

Company Appeal (AT) (Insolvency) No. 349 of 2020 13

2016 and GST for payments made till June 2017. After June 2017, payment

of Rs. 10,00,000/- has been made but no GST has been charged.

22. It is further submitted that the Resolution Professional filed reply before

this Tribunal along with the accounts filed by the Appellant No. 2, Ingenium

Consultancy LLP before mca.gov.in. From financial statements, it is seen that

income from operations for the year 2016-2017 (1st April 2016 to 31st March

2017) is shown as NIL. It is the case of the Appellant No. 2 before the NCLT

and before this Tribunal where the Appellants have now produced various

engagement letters with various customers to show that they had substantial

business in 2015-16 and 2016-17 is contrary to their own financial

statements. The financial statements for 2016-17 shows NIL income from

operations. Since consultancy is the main business of Appellant No. 2, such

income ought to have been accounted by the Appellant No. 2 which is not

seen from the financial statements of Appellant No. 2.

23. It is further submitted that the Resolution Professional sought for

Invoice as the payment has been made toward 'business consultancy services'

which is liable to service tax. Further as the amount paid is much in excess

of threshold limit of Rs. 10 lacs applicable for registration of Service Tax, such

Invoice is mandatory. In this regard reference is drawn to rule 4A of the

Service Tax Rules, 1994 which was then applicable-

"Every person providing taxable service [not later than [thirty] days from the date of [completion of] such taxable service or receipt of any payment towards the value of such taxable service, whichever is earlier shall issue an invoice, a bill or, as the case may be, a challan signed by such person or a person

Company Appeal (AT) (Insolvency) No. 349 of 2020 14

authorized by him in respect of such taxable service provided or [agreed] to be provided and such invoice, bill or, as the case may be, challan shall be serially numbered and shall contain the following, namely :-

(i) the name, address and the registration number of such person;

(ii) the name and address of the person receiving taxable service;

(iii) description and value of taxable service provided or agreed to be provided; and

(iv) the service tax payable thereon."

Further penalty is payable under Section 76 and 77 of Finance

Act for failure to pay Service Tax and for contravention of rules respectively.

Punishment is also prescribed under Section 89 of the Finance Act for

knowingly failing to pay service tax which includes imprisonment for a term

which may extend up to three years.

24. It is further submitted that till date no invoice has been produced by the

Appellants or by the Respondent No. 2 and there has no deduction of Tax at

source which is the required for payments made towards consultancy services

in terms of Section 194J of the Income Tax Act, 1961. No explanation has been

provided for such failure to deduct tax.

25. It is further submitted that based on these submissions the Ld.

Adjudicating Authority has rightly passed the impugned order and there is no

merit in the Appeal, the Appeal is fit to be dismissed.

Company Appeal (AT) (Insolvency) No. 349 of 2020 15 Submissions on behalf of the Respondent No. 2

26. The Learned Counsel for the Respondent No. 2 - 'P R Venkatesh',

Promoter Managing Director during the course of argument and his Reply

Affidavit as well as Written Submissions supported the case of the Appellants

and submitted that the impugned order is completely erroneous on both facts

and law and wrongly holds genuine payments made by the Corporate Debtor

for consultancy services offered by Ingenium pursuant to written agreements

entered into between them, to be fraudulent transactions.

27. It is further submitted that the Respondent No. 2 herein, has also filed

an A ppeal which is analogous Appeal i.e. Company Appeal (AT) (Insolvency)

No. 765 of 2020 challenging the same impugned order dated 01.02.2020.

28. It is further submitted that the Appellants case is that these

transactions were all bona fide payments made for services rendered by

Ingenium for and on behalf of the Corporate Debtor pursuant to two

agreements one is dated 12.10.2015 (Annexure A-2 of the Appeal Paper Book)

and another is dated 16.08.2016 (Annexure A-3 of the Appeal Paper Book).

29. It is further submitted that the Ld. Adjudicating Authority, in paragraph

8 of the impugned order wrongly finds that there was no material to say that

the payments made were transferred as payment for consultancy services. It

further holds that there were no supporting entries in the books of account of

the Corporate Debtor to demonstrate that these payments were made for

business purpose. These factual findings are erroneous and contrary to the

record.

Company Appeal (AT) (Insolvency) No. 349 of 2020 16

30. It is further submitted that the Ld. Adjudicating Authority has given

finding is completely contrary to well settled principles of law that fraud has

to be proved by the person alleging it by leading cogent evidence. Fraud must

be pleaded and proved. It cannot be presumed.

31. It is further submitted that the Ld. Adjudicating Authority has failed to

note the essential requirements of Section 66 of the IBC have not at all been

proved by the Resolution Professional in the present case. Under Section 66(1),

the Resolution Professional is to demonstrate that the "business of the

Corporate Debtor has been carried on with intent to defraud creditors of the

Corporate Debtor or for any fraudulent purpose". Further, under Sections

66(2), the Ld. Adjudicating Authority can pass an order against a director only

if, before the insolvency commencement date, such director "ought to have

known there was no reasonable prospect of avoiding the commencement of a

Corporate Insolvency Resolution Process" and such director 'did not exercise

due diligence in minimising potential loss to the creditors of the Corporate

Debtor". The Ld. Adjudicating Authority has not clearly stated whether liability

is being fastened on the Appellant under Section 66(1) or 66(2) and has also

not discussed the specific elements of each sub-section. So, based on these

submissions the impugned order cannot be sustained in the eye of law and fit

to be set aside.

FINDINGS

32. After hearing the Learned Counsel for the parties and going through the

pleadings as also Written Submissions, we are of the considered view that the

following facts are admitted in the instant Appeal.

Company Appeal (AT) (Insolvency) No. 349 of 2020 17

 The Corporate Debtor -'Perfect International Private Limited' and the

Appellant No. 2 entered into two Agreements viz. Agreement dated

12.10.2015 (Annexure A-2 at page 58 to 61 of the Appeal Paper Book)

and 16.08.2016 (Annexure A-3 at page 62 to 65 of the Appeal Paper

Book) respectively.

 The Corporate Debtor made the first tranche of payment on 19.12.2016

of Rs. 25,00,000/- including the advance of Rs. 5,00,000/- as a part

payment of the initial contract of 2015 for facilitation of securing long

term working capital loan for the Corporate Debtor.

 The Corporate Debtor released the second tranche of payment of Rs.

30,00,000/- to the Appellant No. 2 which included Rs. 4,00,000/- as

balance commission amount for arranging the long term working capital

loan from SREI Equipment Finance Limited and Rs. 26,00,000/- as part

of commission for getting business order from M/s Regen Powertech

Private Limited.

 The Corporate Debtor released the third tranche of payment on

31.03.2018 amounting to Rs. 10,00,000/- as balance commission

amount for getting business order from M/s Regen Powertech Private

Limited.

 All together 65 Lacs have been received by the Appellant No. 2 from the

Corporate Debtor in three tranches.

 The Respondent No. 1 - Resolution Professional during the course of

CIRP while reviewing the books of accounts of the Corporate Debtor

came to notice across the aforesaid payments made by the Corporate

Debtor to the Appellant.

Company Appeal (AT) (Insolvency) No. 349 of 2020 18

 The details of payments were sought from the Respondent No. 2 through

email but there was no response or justification in support of such

payments made to the Appellants. The books of accounts reflected this

money as advance to the Appellants.

 It is also admitted fact that the Office of the Appellant No. 2 is located

at the residence of the Respondent No. 2.

 It is also admitted fact that the Respondent No. 2 have common interest

in a company called as Udveka Engineering Private Limited where

Respondent No. 2 and his wife are directors since 22.08.2016 and

26.09.2018 respectively.

 It is also admitted fact that the Appellant Nos. 1 and 2 hold 500 and

9500 equity shares respectively in Udveka Engineering Pvt. Ltd. with

balance 250 shares held by the Respondent No. 2. Therefore, the

Appellants are shareholders and Respondent No. 2 is Director acting on

instructions of the Appellants.

 It is also admitted fact that the Appellant No. 2 was incorporated on

12.01.2015 and the Appellant No. 1 and his wife are partners of the

Appellant No. 2 are engaged in investment advisory and business

consultancy services.

 It is also admitted that the payment was made pursuant to two letters

of engagement dated 12.10.2015 and 16.08.2016.

 It is also admitted fact that the letter of engagement dated 12.10.2015

is letter of engagement between the Respondent No. 2 and Appellant No.

2, the Respondent and Corporate Debtor is not a party to the said

engagement.

Company Appeal (AT) (Insolvency) No. 349 of 2020 19

 It is also admitted fact that the no Invoice was raised by the Appellant

No. 2 on the Corporate Debtor for such payment. There is no service tax

charged for such Invoice and there is no TDS deducted by the Corporate

debtor for such payment.

 Taking all these facts, the Agreements dated 12.10.2015 (Annexure A-2

of the Appeal Paper Book) and 16.08.2016 (Annexure A-3 of the Appeal

Paper Book) are suspicious documents and cannot be relied upon.

ORDER

33. For taking all these facts and provisions of the law, we are of the

considered view that there is no illegality committed by the Ld. Adjudicating

Authority while passing the impugned order. The impugned order dated

01.02.2020 passed by the Ld. Adjudicating Authority (National Company Law

Tribunal), Special Bench, Chennai in MA/987/2019 in IBA/330/2019 is

hereby affirmed. There is no merit in the instant Appeal. The instant Appeal

is hereby dismissed. No order as to costs.

34. Registry to upload the Judgment on the website of this Appellate

Tribunal and send the copy of this Judgment to the Ld. Adjudicating Authority

(National Company Law Tribunal), Special Bench, Chennai, forthwith.

[Justice Anant Bijay Singh] Member (Judicial)

[Ms. Shreesha Merla] Member (Technical) New Delhi 21st September, 2021 R. Nath.

Company Appeal (AT) (Insolvency) No. 349 of 2020