Mega Mall Management Services Private ... vs Ajay Kumar Agarwal

(Arising out of order dated 18.06.2025 passed by the National Company Law Tribunal, Kolkata Bench-II in I.A. (IBC) No. 910 of 2024 in CP (IB) No. 378/KB/2018)

In the matter of:

Mega Mall Management Services Pvt. Ltd. 32, Jagat Banerjee Ghat Road, Shibpur Howrah- 711102 Through Chinmoy Ghosh, Director ...Appellant

Vs.

Ajay Kumar Agarwal Plot No: IID/31/1, Street No. 1111 PS QUBE, Unit Number 1015A, 10th Floor Kolkata- 700161 Through Authorized Representative ...Respondent

Present:

For Appellant: Mr. Mainak Bose, Sr. Advocate, Mr. Anirban Ghosh and Mr. Siddhant Upmanyu, Advocates.

For Respondents: Mr. Rishav Banerjee, Mr. Supriyo Gole, Mr. Arijit Mazumdar, Ms. Madhuja Barman, Ms. Anoushka, Dey, Mr. Moulinath Moitra, Advocates.

J U D G M EN T (06th July, 2026)

INDEVAR PANDEY, MEMBER (T)

This appeal has been filed by Mega Mall Management Services Pvt.

Ltd. challenging the order dated 18.06.2025 passed by the National Company Law Tribunal, Kolkata Bench (Adjudicating Authority) in IA (IBC) No. 910 of

2024 in CP (IB) No. 378/KB/2018, whereby an application filed by Mr. Ajay

Kumar Agarwal, Resolution Professional/(Respondent herein) of Avani

Projects & Infrastructures Ltd. (Corporate Debtor) was allowed and the

Appellant was directed to furnish complete details of rent and parking income

allegedly collected from Avani Riverside Mall for Financial Years 2021-22

and 2022-23.

2. The dispute arises from the Resolution Professional's contention that

information relating to the revenues generated from the mall is necessary for

successful completion of Corporate Insolvency Resolution Process (CIRP) of

Corporate Debtor (CD), whereas Mega Mall Management Services Pvt.

Ltd./Appellant asserts that it is an independent third-party entity having no

ownership, financial, or operational nexus with the Corporate Debtor in

respect of the mall after execution of the agreements dated 31.01.2018.

Appellant has preferred the present appeal seeking setting aside of the

impugned order on the ground that it proceeds on an erroneous interpretation

of the contractual arrangements between the parties and compels disclosure

by a third party without first establishing any subsisting ownership or

financial interest of Corporate Debtor in the mall or its income.

Brief Facts of the Case

3. The brief facts of the case relevant to this appeal are given below:

(i) A Financial Creditor instituted CIRP proceedings under Section 7

of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to

as "Code") vide CP (IB) No. 378/KB/2018 against Avani Projects &

Page 2 of 27 Company Appeal (AT) (Ins.) No. 1236 of 2025 Infrastructures Ltd. (Corporate Debtor) in 2018. Ld. Adjudicating

Authority vide an order passed on 13.03.2019, admitted the Sec 7

petition and initiated the CIRP proceeding against the CD.

(ii) The Resolution Professional proceeded in CIRP on the premise

that Avani Riverside Mall, a shopping mall developed by the Corporate

Debtor, continued to have a nexus with the assets and affairs of the

Corporate Debtor. Acting on this understanding, the Resolution

Professional sought cooperation from several entities connected with

the operation and management of the mall, including Mega Mall

Management Services Pvt. Ltd., which was functioning as a mall

management and maintenance company.

(iii) The Resolution Professional/Respondent filed IA (IBC) No. 395 of

2020 under Section 19(2) of the Code on 06.03.2020 against the

Appellant and six other respondents alleging non-cooperation in the

conduct of the CIRP. The primary allegation was that the respondents

were not extending the assistance required by the Resolution

Professional for examining matters connected with Avani Riverside Mall

and its assets.

(iv) The Adjudicating Authority vide an order dated 13.06.2022

disposed of IA (IBC) No. 395 of 2020 and directed all respondents,

including Mega Mall Management Services Pvt. Ltd., to cooperate with

the Resolution Professional in every possible manner for completion of

the CIRP process. Accordingly, the Respondent addressed an e-mail

dated 25.06.2022 to the Appellant seeking copies of the contractual

Page 3 of 27 Company Appeal (AT) (Ins.) No. 1236 of 2025 arrangements under which it was managing the affairs of Avani

Riverside Mall.

(v) In response thereto, the Appellant on 02.07.2022 furnished

copies of the agreements executed between itself and the Corporate

Debtor, including the original agreement dated 01.06.2011 and the

subsequent agreement dated 31.01.2018.

(vi) Shortly thereafter, Resolution Professional on 02.07.2022 sent

another e-mail to the Appellant, seeking additional information,

including accounts and internal records relating to Avani Riverside

Mall. The Respondent continued to pursue information regarding the

operations and finances of the mall on the basis that the same could

have relevance to the CIRP of the Corporate Debtor.

(vii) The Appellant in its reply on 05.07.2022 asserted that there were

no fixed assets of the Corporate Debtor within Avani Riverside Mall, the

Corporate Debtor was merely the developer of the mall and had ceased

to have any ownership interest in the mall property or its constituent

units.

(viii) The Resolution Professional initiated contempt proceeding

against the Appellant by filing Contempt Application Cont.

A.(IBC)/11/KB/2022 on 22.08.2022 alleging non-compliance of the

earlier directions issued by the Adjudicating Authority and alleging

continued non-cooperation by Mega Mall Management Services Pvt.

Ltd. and other parties.

Page 4 of 27 Company Appeal (AT) (Ins.) No. 1236 of 2025

(ix) During the pendency of the contempt proceedings, various

directions were issued by the Adjudicating Authority requiring the

Resolution Professional to ascertain whether Avani Riverside Mall or

any part thereof continued to be an asset of the Corporate Debtor.

Appellant as well as several shop owners and occupants of the mall

produced registered conveyance documents and other records to

demonstrate that ownership rights in the mall units had been

transferred to individual purchasers and occupants.

(x) The contempt application was disposed of vide an order dated

04.09.2023, whereby, the Adjudicating Authority directed the

Resolution Professional to physically inspect certain shops, determine

the status of the occupants, examine documents submitted by twenty-

five shop owners, and approach the Registrar of Assurances to

independently verify ownership details of the remaining units. The

object of these directions was to ascertain whether any part of the mall

still constituted an asset of the Corporate Debtor.

(xi) The contractual relationship between the Corporate Debtor and

Mega Mall Management Services Pvt. Ltd. traces back to an agreement

executed on 01.06.2011. Under this arrangement, the Corporate Debtor

appointed Mega Mall Management Services Pvt. Ltd. as the

maintenance company for Avani Riverside Mall and authorized it to

maintain the common areas and parking facilities of the mall. The

agreement further contemplated that parking revenue would be

collected by the Appellant and remitted to the Corporate Debtor on a

Page 5 of 27 Company Appeal (AT) (Ins.) No. 1236 of 2025 daily basis, while separate accounts were required to be maintained

and periodically furnished. Various provisions also governed collection

and utilization of common area maintenance charges and other

operational revenues.

(xii) The parties subsequently executed a Supplemental Agreement on

31.01.2018, which materially altered the rights and obligations of the

parties and, according to the Appellant, novated and superseded the

earlier arrangement. Under the revised agreement framework,

Appellant became responsible for collecting CAM charges, electricity

charges, gas charges and other operational income of the mall and was

required to utilize such collections for maintenance and upkeep of the

mall. Any surplus remaining after meeting maintenance expenses was

to belong exclusively to the Appellant, while any deficit was also to be

borne entirely by the Appellant.

(xiii) On the very same date, namely 31.01.2018, another tripartite

agreement was executed among the Corporate Debtor, Mega Mall

Management Services Pvt. Ltd., and Aster Buildtech Private Limited.

Under this arrangement, the rights and responsibilities relating to

management, operation and collection of parking charges from the

parking area were assigned to Aster Buildtech Private Limited.

(xiv) Subsequently, following deliberations in Committee of Creditors

meeting held on 26.02.2024, the Resolution Professional sent a

communication dated 29.02.2024 to the Appellant seeking details of

Page 6 of 27 Company Appeal (AT) (Ins.) No. 1236 of 2025 rent and parking charges allegedly collected from the mall for Financial

Years 2021-22 and 2022-23 as well as thereafter.

(xv) The Appellant vide its reply dated 08.03.2024, rejected the

request and reiterated that it was not connected with the Corporate

Debtor in the manner alleged by the Resolution Professional. It further

maintained that internal financial details relating to the operations of

the mall could not be disclosed, merely because the Corporate Debtor

had once acted as the developer of the project.

(xvi) Thereafter, the Resolution Professional filed IA (IBC) No. 910 of

2024 on 19.04.2024 under Section 60(5) of the Code seeking directions

against the Appellant for disclosure of details relating to rent and

parking income generated from Avani Riverside Mall. The application

was filed in the pending CIRP proceedings of the Corporate Debtor and

formed the basis of the present dispute.

(xvii) The Appellant in its Reply Affidavit dated 01.07.2024, not only

challenged the maintainability of the application, but also asserted that

it was neither collecting rent from the mall nor collecting parking

charges. It specifically stated that parking charges were being collected

by Aster Buildtech Private Limited pursuant to the tripartite agreement

dated 31.01.2018 and emphasized that no legal relationship existed

between the Appellant and the Corporate Debtor that could justify the

disclosure sought by the Resolution Professional.

(xviii) During the proceedings, the Appellant relied extensively upon the

original agreement dated 01.06.2011, the Supplemental Agreement

Page 7 of 27 Company Appeal (AT) (Ins.) No. 1236 of 2025 dated 31.01.2018 and the Tripartite Agreement dated 31.01.2018 to

demonstrate that the contractual regime governing the mall had

fundamentally changed and that any rights earlier existing in favour of

the Corporate Debtor had either been modified or extinguished. It was

repeatedly asserted that sufficient information had already been

provided to the Resolution Professional and that the application was

speculative, misconceived and intended to harass a third party

unrelated to the assets of the Corporate Debtor. The Resolution

Professional, however, persisted with the allegation that substantial

revenue generated from the mall, particularly parking revenue,

ultimately accrued to the benefit of the Corporate Debtor.

(xix) Ld. Adjudicating Authority vide the impugned order dated

18.06.2025, allowed IA (IBC) No.910 of 2024 and directed the Appellant

to furnish complete details of rent and parking charges collected from

Avani Riverside Mall for Financial Years 2021-22 and 2022-23 and

thereafter, within thirty days. Aggrieved by the same the Appellant filed

the present appeal

Submissions of Appellant

4. Ld. Counsel submits that the impugned order proceeds on an erroneous

interpretation of the contractual documents governing the relationship

between the parties and travels beyond the scope of the pleadings before the

Adjudicating Authority. He submits that the Corporate Debtor, Avani Projects

and Infrastructure Limited, was admitted into CIRP on 13.03.2019. The

Corporate Debtor had developed a commercial mall known as "Avani Riverside

Page 8 of 27 Company Appeal (AT) (Ins.) No. 1236 of 2025 Mall". During the CIRP, the Resolution Professional filed an application under

Section 19(2) of the Insolvency and Bankruptcy Code on 02.03.2020 alleging

non-cooperation by the Appellant, which is merely a mall management

company. The said application, being I.A. No. 395 of 2020, was disposed of

by Order dated 13.06.2022 directing cooperation with the Resolution

Professional. Pursuant thereto, the Appellant furnished all information and

particulars sought by the Resolution Professional.

5. He submits that despite such compliance, the Resolution Professional

initiated contempt proceedings being CONT. (IBC) No.11/KB/2022. During

those proceedings, various documents were produced by stakeholders and

directions were issued requiring the Resolution Professional to ascertain

whether shops and showrooms in the mall had already been sold or

transferred prior to CIRP and whether the Corporate Debtor retained any

ownership rights in the mall.

6. It is submitted that the contempt proceedings were ultimately disposed

of by Order dated 04.09.2023 recording that twenty-five shop owners had

furnished ownership documents. The Resolution Professional was directed to

examine those documents and determine, whether such units formed part of

the assets of the Corporate Debtor. The Resolution Professional was further

directed to approach the Registrar of Assurances, Kolkata and verify the

ownership rights, if any, of the Corporate Debtor over the subject property.

Thus, even at that stage, the ownership status of the mall had not been

conclusively established.

Page 9 of 27 Company Appeal (AT) (Ins.) No. 1236 of 2025

7. Ld. Counsel further submits that the Appellant was thereafter served

with I.A. (IBC) No. 910 of 2024, wherein it was impleaded as a respondent. By

the said application, the Resolution Professional sought directions upon the

Appellant to furnish information allegedly sought through an email dated

04.03.2024. He submits that the sole allegation in the application was that

the Resolution Professional had requested the Appellant to provide details of

rent collections and parking charges allegedly collected from the mall during

Financial Years 2021-22 and 2022-23. The application did not disclose any

material establishing that such amounts constituted assets or receivables of

the Corporate Debtor. The said application also referred to the CoC meeting

held on 26.02.2024 and the Appellant's response to the email dated

04.03.2024.

8. It is the submission of Ld. Counsel that in its reply email, the Appellant

specifically informed the Resolution Professional, that it was an independent

third party having no role in the CIRP of the Corporate Debtor. It was pointed

out that its position had already been clarified through pleadings and

affidavits filed in the contempt proceedings. The Appellant further stated that

the information sought related to its internal accounts and confidential

commercial data, disclosure whereof was beyond the scope of CIRP

proceedings concerning the Corporate Debtor.

9. Ld. Counsel further submits that the Appellant filed a detailed reply

affidavit opposing I.A. No. 910 of 2024, wherein it was specifically contended

that the application was liable to be dismissed, since information was being

sought from a third-party entity in relation to assets, which had not been

Page 10 of 27 Company Appeal (AT) (Ins.) No. 1236 of 2025 shown to belong to the Corporate Debtor. Reference was made to the earlier

orders directing the Resolution Professional to first determine whether the

mall itself continued to be an asset of the Corporate Debtor. It was also

pointed out that the Resolution Professional had failed to place any material

on record demonstrating that the mall remained an asset of the Corporate

Debtor.

10. It is his submission that the Resolution Professional thereafter filed a

rejoinder seeking to introduce an entirely new case. The Appellant contended

that the allegations contained in the rejoinder were beyond the scope of the

original application, unrelated to the relief sought therein and incapable of

being introduced without amendment of the main pleadings. He submits that

the Resolution Professional relied upon two agreements executed between the

Corporate Debtor and the Appellant, namely the Agreements dated

01.06.2011 and 31.01.2018, which had already been disclosed by the

Appellant through its email dated 02.07.2022.

11. Ld. Counsel submits that the 2011 and 2018 Agreements clearly

demonstrated that the rent and parking charges sought by the Resolution

Professional were not receivables of the Corporate Debtor. It was submitted

that Clause 3, Paragraphs 1 and 2 of the 2011 Agreement stood superseded

and novated by the subsequent Agreement dated 31.01.2018 executed in the

ordinary course of business. Consequently, the rights and obligations of the

parties were governed by the 2018 Agreement. He further submitted that at

the hearing, the Appellant specifically argued that no new case could be made

out through a rejoinder affidavit. The allegations regarding the Appellant

Page 11 of 27 Company Appeal (AT) (Ins.) No. 1236 of 2025 being a related party or step-down subsidiary of the Corporate Debtor were

introduced for the first time in the rejoinder and formed no part of the original

application. No amendment had been sought to incorporate such allegations.

The Appellant nevertheless furnished replies to those allegations without

prejudice to its rights and contentions.

12. Ld. Counsel submits that the impugned order dated 18.06.2025

proceeds on a complete misreading of the 2011 and 2018 Agreements. At

paragraph 2.2 of the impugned order, the Adjudicating Authority

misconstrued Clause 2 of the 2018 Agreement. The said clause specifically

provides that any surplus remaining after meeting the maintenance and

upkeep expenses of the mall would belong to the Appellant, being the Second

Party under the agreement. However, the Adjudicating Authority erroneously

concluded that such surplus belonged to the Corporate Debtor. Similar errors

appear in paragraphs 8, 10 and 13 of the impugned order.

13. He further submits that the Adjudicating Authority failed to appreciate

that under the 2018 Agreement, collection of parking charges no longer

formed part of the Appellant's obligations and had been assigned to another

third party under a separate agreement. The finding that the Corporate

Debtor was maintaining the parking area is therefore contrary to the record.

Having accepted the existence and validity of both agreements, the

Adjudicating Authority could not have interpreted their clauses in a manner

directly contrary to their express terms. The impugned order is therefore liable

to be set aside on this ground alone.

Page 12 of 27 Company Appeal (AT) (Ins.) No. 1236 of 2025

14. Ld. Counsel submits that the Resolution Professional has once again

sought to rely upon allegations introduced for the first time in the rejoinder

affidavit. Significantly, those allegations were not considered by the

Adjudicating Authority, while passing the impugned order. In the absence of

any appeal or cross-objection by the Resolution Professional challenging such

non-consideration, it is not open to him to enlarge the scope of the present

appeal. The controversy before this Appellate Tribunal is confined to the

findings recorded by the Adjudicating Authority regarding the interpretation

of the Agreements dated 01.06.2011 and 31.01.2018.

15. The Appellant places reliance upon the judgment of the Hon'ble

Supreme Court in "Banarsi & Ors. v. Ram Phal,[(2003) 9 SCC 606]". It is

submitted that in paragraph 22 of the said judgment, the Hon'ble Supreme

Court held that in the absence of a cross-appeal or cross-objection, an

appellant cannot be placed in a position worse than the one existing prior to

filing the appeal. Applying the said principle, it is submitted that the present

appeal must be decided solely on the basis of the findings contained in the

impugned order and the Resolution Professional cannot be permitted to

introduce new controversies or seek enlargement of the issues involved.

Accordingly, he submits that the impugned Order dated 18.06.2025 deserves

to be set aside and the present Appeal deserves to be allowed.

Submissions of Respondent

16. Ld. Counsel for the Resolution Professional submits that under the

original Agreement dated 01st June 2011 executed between Avani Projects

and Infrastructure Limited (Corporate Debtor) and the Appellant, the

Page 13 of 27 Company Appeal (AT) (Ins.) No. 1236 of 2025 Appellant was engaged to provide maintenance, housekeeping, security and

other operational services in relation to the shopping Mall. Under this

arrangement, the Appellant was entrusted with collection of revenue

generated from the Mall on behalf of the Corporate Debtor, and was required

to transfer the same to the Corporate Debtor. In consideration of such

services, the Appellant was entitled to a fixed fee of Rs. 50,000/- per month.

Thus, the agreement clearly contemplated that all revenues generated from

the Mall belonged to the Corporate Debtor and that the Appellant merely acted

as a service provider responsible for collection and remittance of such

revenues.

17. Ld. Counsel further submits that the financial records establish that

the Mall was a substantial revenue-generating asset of the Corporate Debtor.

The financial statements show that from 2017 onwards, approximately Rs.

117 Crores was received by the Corporate Debtor from income generated by

the Mall. These figures demonstrate the significant revenues generated from

Mall operations, which, if continued to be remitted in accordance with the

original arrangement, could have been utilized towards repayment of creditors

and improvement of the Corporate Debtor's financial position.

18. He submits that the subsequent agreements executed on 31st January

2018 fundamentally altered the commercial arrangement and diluted the

rights of the Corporate Debtor. The original terms were modified so that the

surplus generated from the Mall, after meeting maintenance and operational

expenses, no longer belonged to the Corporate Debtor, but accrued to the

Page 14 of 27 Company Appeal (AT) (Ins.) No. 1236 of 2025 Appellant. This resulted in diversion of valuable revenue streams away from

the Corporate Debtor.

19. Ld. Counsel further submits that the audited financial statements for

the year ending 31st March 2017 disclose income from the Mall amounting

to Rs. 307.56 Lakhs. However, after execution of the agreements dated 31st

January 2018, no corresponding income appears to have been credited to the

Corporate Debtor. Instead, the audited records indicate that the Appellant

continued collecting lease rentals, signage charges and other revenues

generated from the Mall, without remitting the same to the Corporate Debtor,

thereby diverting its revenue-generating rights.

20. Ld. Counsel submits that on the same date, i.e., 31st January 2018, a

Tripartite Agreement was executed amongst the Appellant, Aster Buildtech

Private Limited and the Corporate Debtor. The consideration for this

agreement was fixed at only Rs.10,00,000/-. Considering the substantial

revenues generated from the Mall and the valuable rights transferred, such

consideration was wholly inadequate and commercially irrational. The

financial records further show that Aster itself generated revenue of

approximately Rs. 193.53 Lakhs. The consideration reflected in the Tripartite

Agreement, therefore bears no reasonable nexus with the value of the rights

transferred and strongly indicates lack of bona fides.

21. He further submits that the surrounding circumstances clearly

establish that the true intent behind the agreements dated 31st January 2018

was to divert and siphon the funds and revenue streams of the Corporate

Debtor. The agreements were so structured that substantial economic

Page 15 of 27 Company Appeal (AT) (Ins.) No. 1236 of 2025 benefits arising from the Mall were diverted to related entities, thereby

prejudicing creditors.

22. Ld. Counsel submits that the fraudulent nature of the transaction

becomes even more apparent in light of the winding-up proceedings against

the Corporate Debtor. The Hon'ble High Court at Calcutta had admitted a

winding-up petition by order dated 01st December 2017 and appointed a

Provisional Liquidator on 07th September 2018. A petition under Section 7 of

the Insolvency and Bankruptcy Code, 2016 had also been filed on 14th March

2018. Despite these developments, the parties proceeded to execute

arrangements affecting valuable assets and revenue streams of the Corporate

Debtor.

23. Ld. Counsel invited attention to Section 441(2) of the Companies Act,

1956 provides that winding-up is deemed to commence from the date of

presentation of the winding-up petition. Accordingly, although the admission

order was passed on 01st December 2017, the winding-up process is deemed

to have commenced, when the petition was presented in 2016. Therefore, on

31st January 2018, the Corporate Debtor was already under the shadow of

winding-up proceedings. Any transfer or dealing with valuable assets during

this period was highly suspect and indicative of an attempt to defraud

creditors. The conduct of the Corporate Debtor, the Appellant and Aster

demonstrate a concerted effort to siphon revenue-generating rights away from

the Corporate Debtor and diminish the asset pool available to creditors.

24. Ld. Counsel further places reliance upon Section 531 of the Companies

Act, 1956 relating to avoidance of voluntary transfers. The provision

Page 16 of 27 Company Appeal (AT) (Ins.) No. 1236 of 2025 stipulates that transfers made without valuable consideration and not in good

faith, within one year prior to commencement of winding-up are void against

the liquidator. The consideration of Rs. 10 Lakhs bears no reasonable relation

to the valuable rights transferred under the agreements. The transaction

therefore falls squarely within the mischief of Section 531 and strongly

suggests a mala fide intention to defeat stakeholder interests and deprive the

Corporate Debtor of valuable income.

25. Ld. Counsel submits that after commencement of CIRP, the Respondent

repeatedly sought complete information and documentation concerning

revenues generated from the Mall and collected by the Appellant. Despite

several requests, no meaningful information was furnished, compelling the

Respondent to seek directions from the Adjudicating Authority.

26. He submits that during CIRP, a detailed transaction audit was

conducted. The auditors concluded that the transactions involving the

Appellant and Aster were fraudulent and resulted in diversion of funds

belonging to the Corporate Debtor. The audit quantified the diverted amount

at approximately Rs. 117 Crores and additionally recorded diversion of Rs.

1.94 Crores. Based on the findings of the transaction audit report dated 16th

December 2024, prepared by S.K. Agarwal & Co., Company Chartered

Accountants LLP, and upon an independent assessment, the Respondent has

filed IA No. 591 of 2025 under Sections 45, 49 and 66 of the Insolvency and

Bankruptcy Code, 2016, which is presently pending adjudication before the

Adjudicating Authority.

Page 17 of 27 Company Appeal (AT) (Ins.) No. 1236 of 2025

27. Ld. Counsel submits that the Appellant and the Corporate Debtor have

always remained closely connected entities. The Appellant was incorporated

on 14th March 2011 and its entire shareholding was held by Deveran

Conglomerate Private Limited and Jairon Tie-Up Private Limited, each holding

50%. Further, both Deveran and Jairon were subsidiaries and/or step-down

subsidiaries of the Corporate Debtor, the Appellant became a step-down

subsidiary and consequently a related party of the Corporate Debtor.

28. He further submits that the commonality of ownership and

management is evident from the corporate structure and shareholding

records. The documentary record shows that Deveran and Jairon remained

wholly owned subsidiaries within the group structure, and consequently the

Appellant continued as a step-down subsidiary of the Corporate Debtor until

at least FY 2022. This relationship persisted well beyond commencement of

CIRP on 13th March 2019. He submits that although subsequent changes in

shareholding are reflected in the financial statements for FY 2022-23, such

restructuring cannot erase the historical related-party relationship that

existed when the impugned transactions were entered into.

29. It is the submission of Ld. Counsel that the transfer of shareholding

was affected without the knowledge of the Respondent, who had assumed

control of the Corporate Debtor during CIRP. A party that was once a related

party cannot avoid scrutiny for transactions undertaken during the period of

such relationship. The Corporate Debtor, through its subsidiaries, originally

held complete ownership and control over the Appellant. The subsequent

transfer of shares formed part of a broader scheme to deprive the Corporate

Page 18 of 27 Company Appeal (AT) (Ins.) No. 1236 of 2025 Debtor of valuable revenue-generating rights associated with the Mall.

Through this arrangement, revenues arising from the Mall were diverted away

from the Corporate Debtor, causing substantial loss and prejudice to

creditors.

30. Ld. Counsel further submits that such conduct attracts scrutiny under

Section 66 of the Code, as a fraudulent transaction intended to defeat creditor

interests. The magnitude of the assets involved is evident from the audited

balance sheet for FY 2016-17, which recorded fixed tangible assets of Avani

Riverside Mall, including plant and machinery, furniture, fixtures and

electrical installations, at a book value of Rs. 97.39 Crores and a written down

value of Rs. 48.33 Crores as on 31st March 2017. He submits that despite

generating substantial revenues from the Mall, the Appellant never remitted

the amounts due to the Corporate Debtor. The diversion and retention of such

revenues was undertaken solely to deprive the Corporate Debtor and its

creditors of funds rightfully belonging to it.

31. Ld. Counsel submits that the Corporate Debtor executed Lease Deeds

with Reliance Footprint Limited and PVR Limited on 15th February 2012 and

11th November 2011 respectively. These lease deeds expressly provided that

Common Area Maintenance (CAM) charges were to be collected through the

Appellant and thereafter remitted to the Corporate Debtor. These provisions

reaffirm the original arrangement under which revenues generated from the

Mall belonged to the Corporate Debtor and were merely collected through the

Appellant as a facilitating entity. In view of the lease deeds and the original

Agreement dated 01st June 2011, there was no commercial or legal

Page 19 of 27 Company Appeal (AT) (Ins.) No. 1236 of 2025 justification for entering into subsequent arrangements that diluted or

extinguished the Corporate Debtor's entitlement to CAM charges and other

revenues arising from the Mall. The later agreements were specifically

designed to alter the revenue structure to the detriment of the Corporate

Debtor and its creditors and therefore warrant strict scrutiny by this Appellate

Tribunal.

Analysis and Findings

32. We have gone through the records of the case including written

submissions, and heard the ld. Counsels.

33. At the outset, it is important to note that the impugned order does not

determine ownership of Avani Riverside Mall, does not adjudicate competing

contractual rights between the parties, does not declare that any amount is

payable by the Appellant to the Corporate Debtor, and does not finally decide

whether the revenues generated from the mall belong to the Corporate Debtor

or to the Appellant. The Adjudicating Authority has merely directed the

Appellant to furnish details relating to rent and parking collections sought by

the Resolution Professional. Therefore, the principal question before us is not

one of ownership or entitlement, but whether such information could

legitimately be sought by the Resolution Professional and whether the

Appellant was justified in refusing to disclose it. The challenge raised in the

present appeal requires us to examine the true nature of the direction issued

by the Adjudicating Authority.

34. The factual background assumes significance. The Corporate Debtor,

Avani Projects and Infrastructure Ltd., was admitted into CIRP on

Page 20 of 27 Company Appeal (AT) (Ins.) No. 1236 of 2025 13.03.2019. During the CIRP proceedings, the Resolution Professional had

been compelled to initiate proceedings under Section 19(2) of the Code

alleging non-cooperation from several entities, including the Appellant. Those

proceedings culminated in an order dated 13.06.2022 from the Adjudicating

Authority directing all Respondents to cooperate with the Resolution

Professional. Thereafter, contempt proceedings were also initiated, during

which the Adjudicating Authority repeatedly directed examination of

ownership records and verification of documents relating to different portions

of the mall. Ultimately, by order dated 04.09.2023, the Resolution

Professional was directed to ascertain the ownership position by examining

documents furnished by various occupants and by approaching the Registrar

of Assurances. Thus, the present application did not arise in isolation. It

forms part of a continuing effort undertaken during CIRP to ascertain the true

nature of assets, transactions and revenue streams connected with the

Corporate Debtor.

35. The Appellant has sought to resist disclosure primarily relying on the

two agreements dated 31.01.2018. According to the Appellant, the original

agreement dated 01.06.2011 under which the Appellant became responsible

for maintenance and operational expenses of the mall and was entitled to

retain any surplus remaining after such expenses, stood modified by the

subsequent arrangements. It has been further argued that parking operations

stood transferred to Aster Buildtech Private Limited and therefore no details

concerning parking revenue can be demanded from the Appellant. Based on

these agreements, the Appellant contends that neither the mall nor the

revenues generated therefrom belong to the Corporate Debtor.

Page 21 of 27 Company Appeal (AT) (Ins.) No. 1236 of 2025

36. This line of argument proceeds on an assumption that the validity,

effect and legal consequences of the 2018 agreements stand conclusively

established. The record, however, does not support such an assumption. The

materials placed before us indicate that the winding-up petition against the

Corporate Debtor had already been admitted on 01.12.2017, whereas the

agreements upon which the Appellant places heavy reliance were executed

thereafter on 31.01.2018. Consequently, the transactions reflected in those

agreements cannot automatically be treated as beyond scrutiny. Where

valuable commercial rights, revenue streams and operational benefits are

alleged to have been transferred away from a financially distressed company

after commencement of winding-up proceedings, such transactions

necessarily require careful examination from the standpoint of creditors and

stakeholders. Therefore, the Appellant cannot insist that the Resolution

Professional must first accept the validity of the 2018 arrangements before

seeking information relating to revenues generated under those very

arrangements.

37. It is seen from the records that a transaction audit has been conducted

during the CIRP and that the findings thereof have led to initiation of

proceedings under Sections 45, 49 and 66 of the Insolvency and Bankruptcy

Code. Those proceedings are stated to concern alleged diversion of substantial

value from the Corporate Debtor through transactions involving the Appellant

and connected entities. We are conscious that those proceedings remain

pending adjudication and therefore no final opinion can presently be

expressed on the allegations raised therein. Nevertheless, the existence of

such proceedings is a relevant circumstance. It demonstrates that the

Page 22 of 27 Company Appeal (AT) (Ins.) No. 1236 of 2025 financial dealings relating to the mall and the agreements relied upon by the

Appellant are already under examination. In such circumstances, a request

for financial information cannot be viewed as speculative or unnecessary. On

the contrary, disclosure of complete records becomes essential for a

meaningful examination of the transactions which are already the subject

matter of scrutiny.

38. Under the scheme of the Insolvency and Bankruptcy Code, the

Resolution Professional is entrusted with the duty of collecting, collating and

verifying information concerning the affairs of the Corporate Debtor. The

Resolution Professional is also required to preserve and maximise value for

the benefit of all stakeholders. Such obligations cannot be discharged

effectively unless relevant information is made available. The information

sought in the present case pertains to rental income and parking collections

generated from a mall admittedly developed by the Corporate Debtor and

managed by the Appellant pursuant to arrangements entered into with the

Corporate Debtor. The request for such information is therefore directly

connected with the discharge of statutory duties and cannot be treated as a

fishing or roving inquiry.

39. We also note that the Appellant's own case establishes a continuing

nexus with the affairs of the mall. The Appellant is not a complete stranger

having no connection whatsoever with the Corporate Debtor. The Appellant

admits that it was appointed under agreements executed with the Corporate

Debtor for management and maintenance functions relating to the mall. The

rights now claimed by the Appellant are themselves traced to agreements

Page 23 of 27 Company Appeal (AT) (Ins.) No. 1236 of 2025 entered into with the Corporate Debtor. Once such relationship is admitted,

it becomes difficult to accept the contention that information relating to

revenues generated through those arrangements is wholly beyond the reach

of the Resolution Professional.

40. We note that the Appellant has been part of the Corporate Debtor's

group structure. The shareholding pattern demonstrates that entities holding

shares in the Appellant are subsidiaries and/or step-down subsidiaries of the

Corporate Debtor, thereby rendering the Appellant a related party. The

Appellant has, at all material times, been intrinsically connected with the

affairs and management of the Corporate Debtor and is in possession of

relevant financial information. In view thereof, the Appellant is squarely

covered under Section 19 of the Code, which mandates all persons associated

with the management of the Corporate Debtor to extend full cooperation to

the Resolution Professional.

41. At this stage, it is necessary to draw a distinction between disclosure

of information and determination of rights. The Appellant appears to

equate the two. However, furnishing information does not amount to an

admission that the revenues belong to the Corporate Debtor. Nor does it result

in a declaration that the Appellant has acted improperly. Production of

records merely enables the Resolution Professional and the Adjudicating

Authority to ascertain the true factual position. The question whether any

revenue ultimately belongs to the Corporate Debtor, whether the agreements

of 2018 are valid and enforceable, or whether any avoidance transaction has

occurred, are matters that can be examined only after the relevant facts and

Page 24 of 27 Company Appeal (AT) (Ins.) No. 1236 of 2025 financial records are available on record. Therefore, disclosure is a

preliminary step towards adjudication and not an adjudication in itself.

42. The history of this litigation further demonstrates that the Resolution

Professional has repeatedly faced difficulty in obtaining information relevant

to the CIRP. Proceedings under Section 19(2), subsequent contempt

proceedings, directions for verification of ownership records and finally the

present application all indicate a continuing struggle to obtain material

information. Seen in this background, the impugned order appears to be a

measured attempt by the Adjudicating Authority to facilitate the insolvency

process rather than an unwarranted interference with the affairs of the

Appellant. The direction issued is narrow in scope and confined only to

furnishing information sought by the Resolution Professional.

43. The argument of the Appellant that it is a third party to the dispute and

a separate legal entity also does not carry the matter much further. Separate

legal personality cannot become a shield against disclosure, where the

information sought bears a direct nexus with transactions and arrangements

connected with the Corporate Debtor. As seen earlier Appellant has been a

step-down subsidiary of the Corporate Debtor for a major portion of CIRP.

The impugned order neither disregards the independent legal status of the

Appellant nor imposes any liability upon it. It merely requires production of

information which may assist in determining the true nature and effect of

transactions undertaken in relation to the mall.

44. Most importantly, the issues relating to ownership of the mall,

entitlement to revenues, validity of the 2018 agreements and alleged diversion

Page 25 of 27 Company Appeal (AT) (Ins.) No. 1236 of 2025 of value remain matters of inquiry and adjudication. The record itself shows

that these questions have not attained finality. Once it is accepted that such

issues remain open, it necessarily follows that information relevant to those

issues cannot be withheld. Acceptance of the Appellant's contention would

lead to an anomalous situation where a party could refuse disclosure of

relevant records by asserting a defence which itself requires investigation.

Such an approach would frustrate the very purpose of CIRP and substantially

impair the ability of the Resolution Professional to perform duties entrusted

under the Code.

45. The Appellant has relied upon the judgment of the Hon'ble Supreme

Court in Banarsi & Ors. v. Ram Phal, (2003) 9 SCC 606 to contend that

the Respondent cannot raise issues beyond those specifically dealt with in the

impugned order. It was held that such relief could not be granted in the

absence of an appeal or cross-objection. In the present case, however, no

additional relief is being sought by the Respondent, nor is there any attempt

to enlarge the scope of the impugned order. The facts and circumstances

referred to by the Respondent are only being relied upon to support the

direction already issued by the Adjudicating Authority and to demonstrate

why disclosure of information was necessary for the effective conduct of CIRP.

The controversy before us is confined to examining the correctness of the

direction requiring disclosure of information and not to granting any fresh

relief in favour of the Respondent.

46. For all the aforesaid reasons, we are unable to find any irregularity in

the impugned order. The direction issued by the Adjudicating Authority is

Page 26 of 27 Company Appeal (AT) (Ins.) No. 1236 of 2025 limited in nature, does not adjudicate substantive rights of the parties and is

intended only to enable the Resolution Professional to discharge statutory

obligations under the Insolvency and Bankruptcy Code. The objections raised

by the Appellant are essentially founded upon disputed questions concerning

ownership, contractual entitlement and validity of transactions, all of which

can be examined only after complete facts and records are available.

47. We are, therefore, of the view that the Adjudicating Authority committed

no error in directing the Appellant to furnish the information sought by the

Resolution Professional. Consequently, the appeal is liable to be dismissed

and the impugned order deserves to be affirmed.

Justice N. Seshasayee Member (Judicial)

Arun Baroka Member (Technical)

Indevar Pandey Member (Technical) Place: New Delhi

Harleen/ Pragya (LRA)

Page 27 of 27 Company Appeal (AT) (Ins.) No. 1236 of 2025