Praful Satra vs Vaishali Patrikar

Praful Satra & Ors. ...Appellant(s)

Versus

Vaishali Patrikar ...Respondent(s) Present: For Appellant : Mr. Malak Bhatt, Ms. Neeha Nagpal, Mr. Shreyansh Chopra, Advocates. For Respondents : Ms. Neha Agarwal, Mr. Pulkit Sharma, Ms. Vanshika Mittal, Advocates. Ms. Vaishali Patrikar, for R-1/RP.

ORDER

(Hybrid Mode) [Per: (Oral) Justice Rakesh Kumar Jain] 28.05.2025: Comp. App. (AT) (Ins) No. 976 of 2024

This appeal is directed against the order dated 02.04.2024 by which

application bearing IA No. 1626 of 2023 filed by the RP of the Corporate

Debtor namely M/s Satra Properties (India) Ltd. for seeking the relief that

"(b) Be pleased to pass an order u/s. 66 of the Code directing the Respondent

Nos.2, 5 to 9 to remit/refund the amount of INR 2.65 Crore along with interest

@ 18% p.a. in the bank account of the Corporate Debtor to compensate the loss

suffered by the Creditors of the Corporate Debtor with respect to Transaction

No.2;" has been allowed.

2. Shorn of unnecessary details, Vistra ITCL (India) Ltd. (formerly known

as IL & FS Trust Company) filed an application under Section 7 of the IBC, 2016 for the resolution of its debt against Satra Properties (India) Ltd. before

the National Company Law Tribunal, Mumbai. The said application was

admitted on 03.08.2020 and Devrajan Raman was appointed as the IRP who

was later on replaced by the present RP namely, Ms. Vaishali Patrikar.

3. The present RP filed the aforesaid application bearing IA No. 1626 of

2023 under Section 66 of the Code and made four prayers including prayer

(b), referred above. The prayer was granted by the Ld. Tribunal by passing

the following order:

"7.6. Transaction no. 2 was entered into with the Respondent No. 2 for purchase of a property at Bandra and a sum of Rs. 2.65 crores was paid in the year 2006, which came to be written off in the year 2010 itself. The Applicant has contended that no details in relation to this transaction were provided by the Respondent No. 5 to 9 to him or the Forensic Auditor. We also find from the reply of Respondent No. 5 that the reply in this relation is discreet and does not specify for which piece of property, said advance was given. The Respondent No. 5 has simply pleaded that the promoter of Respondent No.2 has shifted to USA since last 6 years and the transaction, in question, is beyond the look back period. However, no look back is prescribed for purpose of Section 66 of the Code. Further, the advance was written off within 4 years of it having been given and the promoters have shifted to USA in last 6 years from the year of reply, we do not find coherence in the contention of Respondent no. 5 to 9 in this relation. In the absence of any details having been brought on record even in relation to target property, the transaction, in question, is fraudulent act on the part of suspended board. We do not find any substance in the contention of Respondent No. 5 to 9 that they had derived no benefit from this transaction.

7.6.1. The Resolution Professional has relied upon decision in the case of Shri Baiju Trading & Investment Private Limited Vs. Arihant Nanawati and Others Company Appeal (AT) Insolvency No. 611/2021 and Shri Dhatu Kirti Developers LLP Vs. Arihant Nanawati in Company Appeal (AT) Insolvency No. 95/2021 to contend that it is not necessary that each instance of fund being siphoned needs to be established from inception to the end and even one conduct of Director of CD can depict an act of fraud.

7.6.2. In view of this, we hold that this transaction to write off falls within the scope of section 66(1) of the Code being an act for fraudulent purpose in carrying the business of the Corporate Debtor. Accordingly, we order that the Respondent No. 5 to 9 shall be liable to make contribution of Rs. 2.65 crores alongwith interest @ 15% p.a. on this amount from the date of its payment to Respondent No. 2 till the same is refunded back to the Corporate Debtor. Nonetheless, it is made clear that the Resolution Professional shall be at liberty to initiate appropriate legal proceedings for recovery of this amount from the Respondent No. 2".

4. Aggrieved against the impugned order, the present appeal has been

preferred by five appellants who are the Suspended Directors of the

Corporate Debtor, namely, Satra Properties (India) Ltd.

5. Shri Malak Bhatt, Advocate appearing on behalf of the appellant has

submitted that the forensic auditor was appointed on 15.02.2021, who had

submitted the Forensic Audit Report dated 15.11.2021, pursuant to which

application has been filed on 12.04.2023 by the RP.

6. He has submitted that it has been wrongly noted in the order that an

amount of Rs. 2.65 Crore which was given as EMD (advance) by the

Company as a Vendee to the Vendor namely, Sanvruta Properties Pvt. Ltd.

was written off in 2010 but it was in March 2020.

7. He has further submitted that before the aforesaid amount was

written off, the appellant tried to recover the amount from the Vendor

Company but the promoters of the Vendor Company left for USA.

8. He has thus submitted that the appellants had tried to recover the

amount in question but it could not recover it because of the aforesaid

reason, therefore, the case set up by RP under Section 66 is not made out.

9. We have heard Counsel for the Appellant and the Respondent/RP.

10. During the course of hearing, Counsel for the appellant has been

candid enough to submit that at the time when Rs. 2.65 Crore was given as

an advance for purchase of property in Bandra, no agreement to sell was

executed between the Vendee Company with Vendor Company.

11. He has also admitted that though it is mentioned in their reply that

there was a Memorandum of Understanding entered into but he is not in

possession of the said Memorandum of Understanding nor it has been

brought on record.

12. He has also admitted that for the purposes of recovery of Rs. 2.65

Crore, no legal action was taken either by the CD or by its Directors.

13. All that has been said is that the present appellant were chasing the

Vendor Company for recovery of the amount but how the vendor Company

was being chased has also not been brought on record.

14. It is also pertinent to mention that there is no date given by the

appellant that when the amount of Rs. 2.65 Crore was given. All that has

been said is that the amount was given in 2006.

15. Besides, this, the appellant has also failed to give the description of

the property which was sought to be purchased at that time by the Vendee

Company from the Vendor Company because it only alleged that the said

property was in Bandra.

16. Going through the aforesaid facts and circumstances, we are satisfied

that there is no error in the finding recorded by the Tribunal, which called

for any interference by this court.

17. The present appeal is thus without any merit and the same is hereby

dismissed. No costs.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Justice Mohammad Faiz Alam Khan] Member (Judicial)

[Naresh Salecha] Member (Technical) sr/rr