Ssmp Agro Export Private Limited & Ors vs Yogesh Sethi Office Liquidator M/S. ...

(Arising against the impugned order dated 20.12.2024, passed by the Ld. National Company Law Tribunal, Delhi Bench-III, in I.A. No. 3827 of 2022 filed in C.P. (IB) No. 495 (ND) 2017)

IN THE MATTER OF:

M/s SSMP Agro Export Private Limited, is a company ...Appellant No. 1 incorporated as an independent start-up.

Mr. Sagar Kunwar, is a Director of Appellant No.1. ...Appellant No. 2

Mr. Shrey Kunwar, is also a Director of Appellant ...Appellant No. 3 No.1.

Versus

Mr. Yogesh Sethi, is the Liquidator of the Corporate ...Respondent No.1

Debtor M/s SSMP Industries Ltd.

Mr. Manoj Kunwar, is the Promoter and Ex-Director ...Respondent No.2 of the Corporate Debtor.

Mr. Surendera Kunwar, is a suspended member of ...Respondent No.3 the Board of Directors of the Corporate Debtor.

Mr. Dhananjay Kumar, is a suspended member of ...Respondent No.4 the Board of Directors of the Corporate Debtor.

Smt. Brijkishori Devi, is associated with M/s DBA ...Respondent No.5 Enterprises LLP.

Sri A. Ravindra Naidu, is one of the alleged ...Respondent No.6 purchasers under the disputed agreement.

Cont'd..../ -2-

Sri V. Kamalapathi Naidu, is the other alleged ...Respondent No.7 purchaser under the disputed agreement.

Sub-Registrar, Chittoor District, Andhra Pradesh.

...Respondent No.8

Present:

For Appellant: Mr. Rohit Sinha, Advocate.

For Respondents: Mr. Yogesh Jagia, Ms. Nitya Ahuja, Ms. Udita Dubey, Advocates.

J U D G M EN T (20th February, 2026)

INDEVAR PANDEY, MEMBER (T)

The present appeal has been preferred under Section 61 of the

Insolvency and Bankruptcy Code, 2016, assailing the order dated

14.11.2024, as subsequently modified by order dated 20.12.2024, passed by

the Ld. National Company Law Tribunal, Delhi Bench-III, (Adjudicating

Authority) in I.A. No. 3827 of 2022 filed in C.P. (IB) No. 495 (ND) 2017. By

the impugned orders, the Ld. Adjudicating Authority directed the

Appellants, namely M/s SSMP Agro Export Private Limited/Appellant

No.1, Mr. Sagar Kunwar/Appellant No.2 and Mr. Shrey

Kunwar/Appellant No.3, to deposit a sum of ₹ 1.00 crore along with interest

@15% per annum into the liquidation estate of the Corporate Debtor through

Mr. Yogesh Sethi/Respondent No.1 and Liquidator of M/s SSMP

Industries Ltd. (Corporate Debtor). The said direction was based on the

finding that an alleged agreement to sell dated 13.12.2019 for a property of

Company Appeal (AT) (Ins.) No. 227 of 2025 -3-

Corporate Debtor (CD) was genuine and that the amount of Rs.1.00 crore

received by the appellant no. 1, constituted part of the sale consideration of

land belonging to the Corporate Debtor.

2. The appellants have raised serious disputes regarding the authenticity

of the document; absence of any adjudication on forgery; and non-

appearance of the alleged purchasers, Sri A. Ravindra Naidu/Respondent

No.6 and Sri V. Kamalapathi Naidu/Respondent No.7, before the Ld.

NCLT. They further state that the said amount stood consistently reflected

in the books of the Appellant as an unsecured investment. Aggrieved by the

exercise of jurisdiction against third parties and the consequential civil

liability fastened upon them without trial, the present appeal has been filed.

Brief facts of the case

3. The brief facts of the case are as given below:

i. The Corporate Insolvency Resolution Process (CIRP) of the Corporate

Debtor, M/s SSMP Industries Ltd., was initiated pursuant to admission

of a petition under Section 9 of the Insolvency and Bankruptcy Code,

2016, in CP (IB) No. 495(ND)/2017, by the Ld. National Company Law

Tribunal, Delhi, on 27.08.2018. Mr. Mohan Lal Jain was appointed as

the Resolution Professional.

ii. The Adjudicating Authority, by order dated 31.07.2019 passed under

Section 33 of the Insolvency and Bankruptcy Code, 2016, ordered the

liquidation of the Corporate Debtor and Respondent No. 1, Mr. Yogesh

Sethi, was appointed as the Liquidator. The assets of the Corporate

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Debtor included, inter alia, mortgaged land situated at Chittoor, bearing

Survey No. 242/1-3 and measuring 9.56 acres.

iii. The Appellant No.1, M/s SSMP Agro Export Private Limited, was

incorporated on 10.07.2019 by Appellant Nos.2 and 3, Mr. Sagar

Kunwar and Mr. Shrey Kunwar, respectively as a start-up venture in

the agro-export sector, drawing upon their family's long-standing

involvement in fruit pulp and concentrate processing across Andhra

Pradesh, Tamil Nadu, and Karnataka.

iv. The Appellants, namely M/s SSMP Agro Export Private Limited, Mr.

Sagar Kunwar and Mr. Shrey Kunwar, have no operational, managerial,

or financial connection with the Corporate Debtor M/s SSMP Industries

Ltd., except for the fact that Respondent No.2, Mr. Manoj Kunwar, Ex-

Director of the Corporate Debtor, is the father of Appellant Nos.2 and 3,

Mr. Sagar Kunwar and Mr. Shrey Kunwar.

v. The family of Appellant Nos.2 and 3, Mr. Sagar Kunwar and Mr. Shrey

Kunwar, had been associated with M/s DBA Enterprises LLP, a

partnership firm engaged in fruit pulp marketing, which later formed

part of a proposed restructuring and merger strategy.

vi. The appellant submitted that the Respondents No.6 and 7, namely Sri

A. Ravindra Naidu and Sri V. Kamalapathi Naidu, approached Appellant

Nos.2 and 3, Mr. Sagar Kunwar and Mr. Shrey Kunwar, with a proposal

to establish a new agro-export start-up, promising total funding of

Rs.6.00 crore, facilitation of government grants, and eventual merger of

Company Appeal (AT) (Ins.) No. 227 of 2025 -5-

M/s DBA Enterprises LLP with Appellant No.1, M/s SSMP Agro Export

Private Limited.

vii. M/s SSMP Agro Export Private Limited, passed a Board Resolution

authorising capital infusion on 12.08.2019. Pursuant thereto, an

amount of Rs.1.00 crore was received by the Appellant No. 1 by RTGS

in two tranches of Rs. 50 lakh each from Respondents No.6 and 7, Sri

A. Ravindra Naidu and Sri V. Kamalapathi Naidu, on 13.12.2019 to

commence operations.

viii. The appellant stated that the said amount of Rs.1.00 crore was

consistently reflected in the statutory books, audited balance sheets,

and ROC filings of the Appellant No.1, M/s SSMP Agro Export Private

Limited, as an unsecured loan from the financial year 2019-20 onwards,

without any reference to a sale transaction or linkage with the Corporate

Debtor M/s SSMP Industries Ltd.

ix. No further infusion of Rs. 5.00 crore and facilitation of government

funding, assured by Respondents No.6 and 7, Sri A. Ravindra Naidu and

Sri V. Kamalapathi Naidu, happened thereafter.

x. As part of the proposed business integration, the operational business

of M/s DBA Enterprises LLP was formally transferred by Respondent

No. 5, Smt. Brijkishori Devi, on 30.07.2020 to Appellant Nos.2 and 3,

Mr. Sagar Kunwar and Mr. Shrey Kunwar, during July 2020.

xi. On 09.06.2022, Respondent No.1, Mr. Yogesh Sethi, Liquidator of the

Corporate Debtor M/s SSMP Industries Ltd., received a legal notice from

the counsel of Respondents No.6 and 7, Sri A. Ravindra Naidu and Sri

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V. Kamalapathi Naidu, alleging for the first time that an agreement to

sell dated 13.12.2019 existed between the Corporate Debtor and

Respondents No. 6 and 7 for sale of land measuring approximately 9.56

acres situated in Chittoor District for a total consideration of Rs.

6,59,52,000/-.

xii. It was stated in the said notice that Rs.1.00 crore paid to the Appellant

No.1, M/s SSMP Agro Export Private Limited, constituted part of the

sale consideration of land belonging to the Corporate Debtor,

purportedly at the instance of Respondent No.2, Mr. Manoj Kunwar,

despite the Appellant not being the owner of the land.

xiii. After examining papers on record, the Respondent No.1, Mr. Yogesh

Sethi, filed I.A. No. 3827 of 2022 under Sections 33(5), 33(1), 66 and

60(5) of the Code, stating that the said Rs. 1 crore constituted sale

consideration under an Agreement to Sell dated 13.12.2019 in respect

of the Chittoor land before the Ld. NCLT on 11.08.2022 seeking

directions against the Appellants, namely M/s SSMP Agro Export

Private Limited, Mr. Sagar Kunwar and Mr. Shrey Kunwar, to deposit

Rs. 1.00 crore with interest into the liquidation estate.

xiv. On 31.08.2022, the Ld. NCLT restrained Respondents No.6 and 7, Sri

A. Ravindra Naidu and Sri V. Kamalapathi Naidu, from enforcing the

alleged agreement. Throughout the proceedings before the Ld. NCLT,

Respondents No.6 and 7, Sri A. Ravindra Naidu and Sri V. Kamalapathi

Naidu, never appeared nor produced corroborative evidence beyond the

disputed document.

Company Appeal (AT) (Ins.) No. 227 of 2025 -7-

xv. The Respondent No. 6 & 7 however, instituted Civil Suit No. 39 of 2022

for specific performance before the Civil Court at Chittoor on

13.12.2022.

xvi. Final arguments in I.A. No. 3827 of 2022, were heard on 05.01.2024,

with liberty granted to file written submissions, though due to

procedural lapses by the appellants counsel, the written submissions of

the Appellants, namely M/s SSMP Agro Export Private Limited, Mr.

Sagar Kunwar and Mr. Shrey Kunwar, were not taken on record.

xvii. By the impugned order dated 14.11.2024, the Learned NCLT declared

the Agreement to Sell void, restrained Respondents Nos. 8 and 9 from

enforcement, and directed the Appellants and Respondents Nos. 1-3 to

deposit Rs.1 crore with interest @ 15% per annum, followed by a clerical

modification dated 20.12.2024.

Submissions of the appellant

4. Submissions of the appellant are as below:

i. Ld. Counsel for the Appellants respectfully submits that the present

appeal has been filed challenging the impugned orders dated

14.11.2024 and 20.12.2024 passed by the Learned National Company

Law Tribunal, Delhi Bench-III, in IA-3827/2022 in CP (IB) No.

495(ND)/2017, whereby the Learned Adjudicating Authority directed

the Appellants to deposit an amount of Rs. 1 crore along with interest

at the rate of 15% per annum into the liquidation estate of the

Corporate Debtor. Ld. Counsel submits that the Appellants are third-

party entities and their directors, who have no connection with the

Corporate Debtor, and the amount in question was received as an

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independent investment transaction, wholly unrelated to the

Corporate Debtor or its liquidation estate. Ld. Counsel further submits

that the Learned NCLT exceeded its jurisdiction under Section 60(5) of

the Insolvency and Bankruptcy Code, 2016 by presuming the validity

of a disputed Agreement to Sell dated 13.12.2019, ignoring the

Appellants' submissions, and directing recovery from third parties

without any nexus to the Corporate Debtor. It is further submitted that

invocation of Section 66 of the Code is wholly misconceived in the

absence of any pleading or proof of fraudulent intent. The impugned

orders, therefore, deserve to be set aside.

ii. Ld. Counsel submits that the Adjudicating Authority's direction against

the Appellants, who are third-party entities, is wholly without

jurisdiction. Section 60(5) of the Code limits the jurisdiction of the NCLT

to matters arising out of or in relation to the insolvency or liquidation of

the Corporate Debtor. The Rs. 1 crore received by Appellant No. 1 was

an independent investment transaction post-liquidation and had no

connection with the Corporate Debtor. He places reliance upon

Judgment of Hon'ble Supreme Court in 'Anuj Jain v. Axis Bank Ltd.'

[(2020) 8 SCC 401] and 'Gujarat Urja Vikas Nigam Ltd. v. Amit Gupta',

[(2021) INSC 163] which clearly restrict the NCLT's jurisdiction to the

debtor's assets and creditors. The impugned direction thus constitutes

a jurisdictional overreach. The alleged agreement dated 13.12.2019 is a

fabricated document and is otherwise void-ab-initio and has no effect

what-so-ever.

Company Appeal (AT) (Ins.) No. 227 of 2025 -9-

iii. Ld. Counsel submits that Section 66 of the Code mandates proof of

intent to defraud creditors. The Liquidator's case rests solely on a

disputed Agreement allegedly produced by Respondents Nos. 8 and 9,

who deliberately failed to appear before the Learned NCLT. There is no

averment or document demonstrating dishonest intent on the part of

the Appellants. Ld. Counsel relies on 'Balwant Rai Saluja & Anr. v. Air

India Ltd. & Ors.' [(2014) 9 SCC 407] to submit that piercing of corporate

veil is impermissible without cogent proof of fraud. The Appellants have

consistently recorded the amount as unsecured debt since 2019, and

no material links it to the Corporate Debtor.

iv. Ld. Counsel submits that allegations of forgery involve complex

questions of fact requiring trial and expert evidence, falling within the

jurisdiction of civil courts. The Learned NCLT exceeded its summary

jurisdiction by adjudicating upon alleged forgery and agreement validity.

Further, fraudulent transaction under Section 66 requires proof of

intent, which has not been established.

v. Ld. Counsel submits that by directing deposit of Rs.1 crore into the

liquidation estate, the Learned NCLT has extinguished the Appellants'

legitimate claims for damages, interest, and business loss against

Respondents Nos. 8 and 9 (Respondents Nos. 6 and 7 in this appeal).

Notably, Respondents Nos. 8 and 9 have never issued any demand

notice or instituted any proceedings for refund. The impugned order

grants them an unjust windfall and allows them to benefit from their

own wrong.

Company Appeal (AT) (Ins.) No. 227 of 2025 -10-

vi. Ld. Counsel submits that the imposition of 15% interest is unsupported

by any contract, statute, or regulation. The Insolvency and Bankruptcy

Code does not permit speculative interest on third-party transactions

unrelated to the Corporate Debtor. Interest under the Code must arise

from debtor liabilities, not independent investments.

vii. In view of the above, Ld. Counsel for the Appellants respectfully prays

that this Hon'ble Appellate Tribunal may be pleased to set aside the

impugned orders dated 14.11.2024 and 20.12.2024 passed in IA-

3827/2022, declare that the amount of Rs. 1 crore is unrelated to the

liquidation estate of the Corporate Debtor, and award costs in favour of

the Appellants.

Submission of Respondent No.1/ Liquidator

5. Submissions of Respondent No.1 are as below:

i. Ld. Counsel for the Respondent No. 1, the Liquidator of SSMP Industries

Ltd., submits that the present appeal has been preferred by the

Appellants seeking to assail the well-reasoned order dated 14.11.2024

passed by the Learned Adjudicating Authority, whereby the Appellants

and the suspended directors of the Corporate Debtor were directed to

deposit an amount of Rs. 1 Crore along with interest @ 15% per annum

into the liquidation estate. It is submitted that the impugned order has

been passed after a detailed examination of the factual matrix and the

statutory framework under the Insolvency and Bankruptcy Code, 2016,

particularly Section 66 thereof, and does not warrant any interference

by this Hon'ble Appellate Tribunal.

Company Appeal (AT) (Ins.) No. 227 of 2025 -11-

ii. The Respondent submits that the appeal is a clear attempt by the

Appellants to escape the consequences of their fraudulent conduct,

which stands fully established from the record, including the admitted

execution of an Agreement to Sell with respect to a liquidation asset and

the receipt of Rs. 1 Crore without any authority of law during the

liquidation period.

iii. Ld. Counsel for the Respondent submits that SSMP Industries Ltd., the

Corporate Debtor, was promoted by Mr. Manoj Kunwar and Mrs.

Anupama Kunwar and was engaged in the business of export of mango

pulp. The Corporate Debtor was admitted into Corporate Insolvency

Resolution Process under Section 9 of the Insolvency and Bankruptcy

Code, 2016 by the Learned Adjudicating Authority on 22.08.2018. At

the time of commencement of CIRP, the Board of Directors of the

Corporate Debtor comprised Mr. Manoj Kunwar, Mr. Surender Kumar

and Mr. Dhananjay Kumar, with Mr. Manoj Kunwar being the alter ego

and controlling mind of the Corporate Debtor.

iv. It is submitted that during the CIRP, the Resolution Professional caused

a special audit, the report of which was submitted on 18.03.2019. The

said audit unearthed serious financial irregularities, including the

submission of two separate balance sheets for the same financial year

2015-2016, one reflecting a profit of Rs. 15,41,157/- and the other

reflecting a loss of Rs. 3,00,33,676/-. The audit further revealed that

assets worth Rs. 2.39 Crores were sold by Mr. Manoj Kunwar, both prior

to and subsequent to the commencement of CIRP, and that destruction

of stock worth Rs. 8.5 Crores was falsely declared.

Company Appeal (AT) (Ins.) No. 227 of 2025 -12-

v. These facts clearly demonstrate systematic manipulation of accounts

and diversion of assets with the intent to defraud creditors, laying the

foundation for the subsequent proceedings under Section 66 of the

Code.

vi. Ld. Counsel for the Respondent submits that owing to the failure of

CIRP, the Learned Adjudicating Authority passed an order dated

31.07.2019 directing liquidation of the Corporate Debtor. The

liquidation estate included, inter alia, an immovable property bearing

Survey No. 242/1242/2242/3 situated at Gundlakattamanchi,

Bangarupalem Mandal, Chittoor District, Andhra Pradesh,

admeasuring 9.56 acres and mortgaged with Oriental Bank of

Commerce (now Punjab National Bank), which has been consistently

referred to as the "Scheduled Property". The liquidation estate also

included a BMW car bearing registration number UP-16-AX-8151,

debtor receivables and intellectual property rights.

vii. It is submitted that during the liquidation process, the BMW car was

lawfully e-auctioned on 10.09.2021 for an amount of Rs. 15.85 Lakhs.

However, despite the liquidation having commenced on 31.07.2019, Mr.

Manoj Kunwar, acting through his mother, Smt. Brij Kishori Devi,

instituted arbitration proceedings with respect to the immovable

properties, including the Scheduled Property. These proceedings were

stayed by the Learned Adjudicating Authority by order dated 17.03.2021

upon an application moved by the Liquidator, thereby affirming the

exclusive jurisdiction of the Adjudicating Authority over liquidation

assets.

Company Appeal (AT) (Ins.) No. 227 of 2025 -13-

viii. Ld. Counsel for the Respondent submits that SSMP Agro Exports Private

Limited, Appellant No. 1 herein, was incorporated after the

commencement of CIRP of the Corporate Debtor. The said company was

promoted by the two sons of Mr. Manoj Kunwar and was engaged in a

business identical to that of the Corporate Debtor, as is evident from the

family tree placed on record.

ix. It is submitted that on 13.12.2019, during the subsistence of

liquidation, Mr. Manoj Kunwar, without any authority of law and in

complete violation of the provisions of the IBC, entered into an

Agreement to Sell with respect to the Scheduled Property in favour of

Respondent Nos. 6 and 7 and received an advance of Rs. 1 Crore through

RTGS in favour of SSMP Agro Exports Private Limited. The details of the

said payment are expressly recorded in the Agreement to Sell itself,

copies whereof form part of the appellate record.

x. The Liquidator became aware of this illegal transaction only upon

receiving a legal notice dated 09.06.2022 from the alleged purchaser.

Upon request, copies of the Agreement to Sell and proof of payment were

provided to the Liquidator. Thereafter, the Liquidator was constrained

to file an application under Section 66 read with Section 60(5) of the

Insolvency and Bankruptcy Code, 2016, which came to be numbered as

I.A. No. 3827 of 2022.

xi. Ld. Counsel for the Respondent submits that Mr. Manoj Kunwar filed a

reply to I.A. No. 3827 of 2022 contending that the claim of the Liquidator

was baseless and alleging that the purchaser had entered into a

fraudulent transaction to recover Rs.1 Crore. Significantly, while raising

Company Appeal (AT) (Ins.) No. 227 of 2025 -14-

such contentions, Mr. Manoj Kunwar did not deny the execution of the

Agreement to Sell.

xii. It is further submitted that Appellant Nos. 2 and 3 did not file any reply

to the application, but filed written submissions before the Learned

Adjudicating Authority, contending that they were not signatories to the

Agreement to Sell, that the principle of limited liability and separate legal

personality of a company protected them, and that receipt of Rs. 1 Crore

under the Agreement to Sell was denied. These defences were examined

and rejected by the Learned Adjudicating Authority after appreciating

the factual record.

xiii. Ld. Counsel for the Respondent submits that the Appellants have raised

entirely new and contradictory pleas before this Hon'ble Appellate

Tribunal by way of an additional affidavit dated 12.03.2025. It has now

been claimed that the amount of Rs. 1 Crore was received as initial

funding and shown as an unsecured loan in the books of account, a

plea never taken before the Learned Adjudicating Authority.

xiv. It is further alleged for the first time that the signatures of Respondent

No. 2 on the Agreement to Sell are forged and that a Memorandum of

Understanding dated 12.12.2023 was executed by Mr. Manoj Kunwar,

which was conspicuously absent from the pleadings filed before the

Adjudicating Authority. It is also claimed that no allotment of shares

was ever made by Appellant No. 1, which itself runs contrary to Section

62 of the Companies Act, 2013.

Company Appeal (AT) (Ins.) No. 227 of 2025 -15-

xv. Ld. Counsel submits that these mutually destructive stands clearly

establish a fraudulent design and collusion between the Appellants and

the suspended directors of the Corporate Debtor, including Mr.

Surender Kumar and Mr. Dhananjay Kumar, thereby reinforcing the

findings recorded in the impugned order.

xvi. Ld. Counsel for the Respondent submits that the Learned Adjudicating

Authority, by the impugned order dated 14.11.2024, after detailed

consideration of the pleadings and evidence, rightly directed all three

suspended directors of the Corporate Debtor and the Appellants to

deposit Rs.1 Crore along with interest @ 15% per annum into the

liquidation estate. The said direction flows directly from the statutory

mandate of the Insolvency and Bankruptcy Code and is fully justified in

law.

xvii. Ld. Counsel for the Respondent submits that Section 36(2) of the

Insolvency and Bankruptcy Code, 2016 clearly defines the liquidation

estate, and there is no dispute whatsoever that the Scheduled Property

formed part of the liquidation estate. Any dealing with such property

without authority of the Liquidator is void ab initio.

xviii. It is further submitted that Section 66 of the Code empowers the

Adjudicating Authority to pass appropriate orders against persons who

are knowingly parties to fraudulent transactions carried out during

CIRP or liquidation with intent to defraud creditors. The execution of the

Agreement to Sell dated 13.12.2019 and receipt of Rs. 1 Crore without

any authority during liquidation squarely satisfy all ingredients of

Section 66, leaving no infirmity in the impugned order.

Company Appeal (AT) (Ins.) No. 227 of 2025 -16-

xix. Ld. Counsel for the Respondent places reliance on the judgment of the

Hon'ble Supreme Court in 'Piramal Capital and Housing Finance Ltd.

(formerly Dewan Housing Finance Corporation Ltd.) v. 63 Moons

Technologies Ltd. & Ors.', reported as 2025 SCC OnLine SC 690,

particularly paragraph 50, which affirms the powers of the Adjudicating

Authority in dealing with avoidance and fraudulent transactions.

xx. Reliance is also placed on the judgment of this Hon'ble Appellate

Tribunal in 'SMBC Aviation Capital Ltd. & Ors. v. Interim Resolution

Professional of Go Airlines (India) Ltd. & Anr.', reported as (2023 SCC

OnLine NCLAT 230), paragraph 32, which reiterates that transactions

undertaken without authority during insolvency proceedings are liable

to be set aside and appropriate restitution ordered.

Submission of Respondent No. 2: Suspended Director of the Corporate Debtor- Mr. Manoj Kunwar

6. Submissions of Respondent No.2 are as below:

i. Ld. Counsel for Respondent No.2 in his opening remarks submits that

by way of the Impugned Orders, the Learned NCLT has travelled far

beyond the scope of its jurisdiction inasmuch as it has, firstly,

adjudicated serious allegations of forgery and fabrication in a summary

proceeding under the Insolvency and Bankruptcy Code, 2016, and

secondly, granted reliefs which were never prayed for in the underlying

application. It is submitted that the Learned NCLT also gravely erred in

directing the Appellants as well as the Answering Respondent to refund

amounts allegedly received under a forged and fabricated Agreement to

Company Appeal (AT) (Ins.) No. 227 of 2025 -17-

Sell, thereby conferring unintended legal sanctity upon a document that

is fundamentally void and fraudulent.

ii. At the outset, Ld. Counsel submits that the Answering Respondent has

independently preferred an Appeal assailing the very same Impugned

Orders, bearing Filing No. 9910110007232025, which is presently

pending consideration before this Hon'ble Tribunal. The contents and

grounds raised therein are reiterated and not reproduced herein for the

sake of brevity

iii. Ld. Counsel for Respondent No. 2 submits that the Learned NCLT

completely failed to appreciate that the purported Agreement to Sell

dated 13.12.2019 is a forged and fabricated document, created at the

behest of Respondent Nos. 6 and 7. It is submitted that Respondent Nos.

6 and 7 illegally affixed forged signatures of the Answering Respondent

on the said Agreement, falsely portraying him as a consenting party to

the transaction.

iv. Ld. Counsel clarifies that Respondent Nos. 6 and 7 had initially

proposed to infuse an amount of Rs. 6,00,00,000/- as investment into

SSMP Agro Export Private Limited, a company distinct and separate

from the Corporate Debtor. Towards part performance of the said

proposed investment, Respondent Nos. 6 and 7 paid a sum of Rs.

1,00,00,000/- to SSMP Agro Export Private Limited. However, owing to

the outbreak of Covid-19 and the subsequent withdrawal of Respondent

Nos. 6 and 7 from the remaining investment, the said company suffered

acute financial distress.

Company Appeal (AT) (Ins.) No. 227 of 2025 -18-

v. Ld. Counsel submits that taking advantage of the aforesaid situation,

Respondent Nos. 6 and 7, in collusion with Respondent No. 1, devised

a deliberate and calculated scheme to illegally usurp a valuable

immovable property belonging to the Corporate Debtor, which is

primarily owned by the Answering Respondent. To effectuate this

unlawful design, a forged Agreement to Sell was fabricated, falsely

implicating the Answering Respondent.

vi. Ld. Counsel emphatically submits that the Answering Respondent never

executed, signed, or consented to the said Agreement to Sell at any point

of time. The signatures appearing on the purported Agreement are

forged, which is evident from a bare comparison with the admitted

signatures of the Answering Respondent on official and

contemporaneous documents.

vii. Ld. Counsel submits that the Answering Respondent became aware of

the existence of the forged Agreement only upon receipt of a legal notice

dated 09.06.2022, wherein Respondent Nos. 6 and 7 demanded

execution of a Sale Deed on the basis of the said fabricated document.

The Answering Respondent immediately and unequivocally denied the

allegations and issued a detailed reply dated 06.07.2022, categorically

refuting the execution of any such Agreement and cautioning

Respondent Nos. 6 and 7 against relying upon the same.

viii. Ld. Counsel further submits that despite the explicit denial, Respondent

No. 1, acting in his capacity as Liquidator, maliciously relied upon the

forged Agreement and filed the same before the Learned NCLT in I.A. No.

3827 of 2022, seeking recovery of Rs. 1,00,00,000/- from the Appellants

Company Appeal (AT) (Ins.) No. 227 of 2025 -19-

and the suspended directors, including the Answering Respondent. It is

submitted that Respondent No. 1 was fully aware that the said amount

was never received by the Answering Respondent and pertained solely

to an independent transaction involving SSMP Agro Export Private

Limited.

ix. Ld. Counsel submits that the deliberate reliance upon a forged

document by Respondent No. 1, in collusion with Respondent Nos. 6

and 7, amounts to a clear criminal conspiracy aimed at misleading the

Learned NCLT. Aggrieved thereby, the Answering Respondent was

constrained to file a criminal complaint dated 20.03.2025 before Police

Station Sarita Vihar, New Delhi, detailing the offences of forgery,

fabrication, and fraudulent use of documents.

x. Ld. Counsel submits that the Learned NCLT gravely exceeded its

jurisdiction by adjudicating upon serious allegations of forgery and

fabrication, which by their very nature require detailed examination of

evidence, expert opinion, and trial, and cannot be determined in

summary insolvency proceedings.

xi. Ld. Counsel submits that it is a settled position of law, as consistently

held by the Hon'ble Supreme Court and this Hon'ble Appellate Tribunal,

that allegations involving forgery, coercion, manipulation, or fabrication

of documents must be adjudicated by a competent civil court or criminal

forum and not by the NCLT in exercise of summary jurisdiction under

the IBC.

Company Appeal (AT) (Ins.) No. 227 of 2025 -20-

xii. Ld. Counsel places reliance on the judgments of this Appellate Tribunal

in 'Satori Global Limited & Anr. v. Shailja Krishna & Ors.' [2023 SCC

OnLine NCLAT 249] and 'Shelendra Kumar Sharma v. DSC Limited'

[2019 SCC OnLine NCLAT 1274], wherein it has been categorically held

that disputes involving allegations of forged or fabricated documents

cannot be decided by the NCLT and must be relegated to appropriate

forums.

xiii. Ld. Counsel submits that despite explicit pleadings and material

demonstrating forgery, the Learned NCLT proceeded to adjudicate the

issue and even directed refund of monies, thereby indirectly validating

a forged document, which renders the Impugned Orders patently illegal

and unsustainable.

xiv. Ld. Counsel submits that the Learned NCLT committed a jurisdictional

error by granting reliefs which were never prayed for. A bare perusal of

I.A. No. 3827 of 2022 would reveal that the Liquidator sought only a

declaration that the Agreement to Sell is void.

xv. Ld. Counsel submits that despite the limited prayer, the Learned NCLT

directed refund of Rs. 1,00,00,000/- and further directed execution of a

private sale in favour of Respondent Nos. 6 and 7 for the remaining

consideration of Rs. 5,00,00,000/-, a relief wholly dehors the pleadings.

xvi. Ld. Counsel submits that such grant of relief, in the absence of a specific

prayer, is impermissible in law and vitiates the entire order.

xvii. Ld. Counsel places reliance on the judgments of the Hon'ble Supreme

Court in 'Desh Raj & Ors. v. Rohtash Singh' [(2023) 3 SCC 714] and

Company Appeal (AT) (Ins.) No. 227 of 2025 -21-

'Akella Lalitha v. Konda Hanumantha Rao & Anr.' [2023 SCC OnLine SC

928], wherein it has been unequivocally held that courts cannot grant

reliefs beyond the pleadings.

xviii. Ld. Counsel submits that owing to the mala fide and malicious

conduct of Respondent No. 1, the Answering Respondent was compelled

to file I.A. No. 5634 of 2021 seeking replacement of the Liquidator, which

remains pending adjudication before the Learned NCLT.

xix. Ld. Counsel further submits that the objections raised by Respondent

No. 1 in the present Appeal are misleading and suppress the material

fact that all such objections are already sub judice before the Learned

NCLT, including challenges to the Special Audit Report and applications

seeking impleadment of the Special Auditor.

xx. Ld. Counsel submits that the pendency of these applications

demonstrates that the findings relied upon by Respondent No. 1 lack

finality and cannot form the basis of adverse directions against the

answering Respondent.

xxi. In view of the aforesaid submissions, Ld. Counsel for Respondent No. 2

most humbly prays that the present Appeal be allowed and the

Impugned Orders be set aside, in the interest of justice.

Analysis and findings

7. We have heard the parties in great detail, gone through voluminous

records of the case including written submissions of the Parties.

Company Appeal (AT) (Ins.) No. 227 of 2025 -22-

8. Before addressing the issues raised by the Appellants and Respondent

No. 2, we consider it necessary to place on record the undisputed

connections between all parties and entities involved, as these facts form the

backbone of the present controversy.

9. To clearly understand the relationship between the parties and the

companies involved, it is necessary to place the family structure, control

pattern, and flow of business and funds in a structured manner.

10. At the top of the structure is Smt. Braj Kishori Devi, who is the mother

of Mr. Manoj Kunwar and the grandmother of Mr. Sagar Kunwar and Mr.

Shrey Kunwar. She has been associated with the family's business interests

and was connected with M/s DBA Enterprises LLP, a family-run concern

engaged in agro and fruit pulp related business. She also holds 8.60 %

shares of Corporate Debtor.

11. Mr. Manoj Kunwar, son of Smt. Braj Kishori Devi, is the promoter and

ex-director of M/s SSMP Industries Ltd., which is the Corporate Debtor in

the present proceedings. CIRP against M/s SSMP Industries Ltd. commenced

on 27.08.2018, and the company was ordered into liquidation on

31.07.2019. Upon commencement of liquidation, all assets of the Corporate

Debtor, including the immovable property situated at Chittoor, Andhra

Pradesh, became part of the liquidation estate. Mr. Manoj Kunwar is also the

father of Appellant Nos. 2 and 3, namely Mr. Sagar Kunwar and Mr. Shrey

Kunwar.

Company Appeal (AT) (Ins.) No. 227 of 2025 -23-

12. As on 31.07.2019, the Corporate Debtor was having total paid up

capital of Rs. 1,83,91,500/- consisting of 18,39,150 equity shares of Rs. 10/-

each which were held as under:

We can see from the above that out of total 18,39,150 shares of the

CD, 18,38,550 shares (99.97%) were held by the family of Sh. Manoj

Kunwar/ Respondent No.2. The CD in effect is a family concern of the

Respondent No.2.

13. Mr. Sagar Kunwar and Mr. Shrey Kunwar, the sons of Mr. Manoj

Kunwar, are the directors and shareholders of M/s SSMP Agro Export Private

Limited, which is Appellant No. 1 in the present appeal. This company was

incorporated after commencement of CIRP of the Corporate Debtor and

during the pendency of insolvency proceedings. M/s SSMP Agro Export

Private Limited carries on business similar to that of the Corporate Debtor,

namely agro-export and fruit pulp related activities. The shareholding and

control of this company vest entirely with Mr. Sagar Kunwar and Mr. Shrey

Kunwar.

14. Another relevant entity is M/s DBA Enterprises LLP, which was a

family-controlled business associated with the Kunwar family and engaged

in similar agro-based activities. The operational business of M/s DBA

Company Appeal (AT) (Ins.) No. 227 of 2025 -24-

Enterprises LLP was subsequently transferred within the family fold, thereby

ensuring continuity of business operations and control among family

members.

15. For clarity, the family structure and control pattern, as emerging from

the undisputed record, can be represented as follows:

16. As regards the Agreement to Sell, the land in Chittoor, which is the

transaction in question, it is not disputed that the Agreement to Sell dated

13.12.2019 pertained to immovable property belonging to Corporate Debtor/

SSMP Industries Ltd., which by that time was already under liquidation. It

is also not in dispute that a sum of Rs. 1 crore was received by the M/s SSMP

Agro Export Private Limited, a company controlled by the sons of the

promoter of the Corporate Debtor. The agreement to sale clearly shows the

payment was made to the appellant company on the same day (13.12.2019)

which is the date of execution of agreement to sale. The property being sold

Company Appeal (AT) (Ins.) No. 227 of 2025 -25-

however, belonged to the liquidation estate of the CD. These facts, taken

together, clearly establish that the transaction was neither remote nor

accidental, but was facilitated through entities and individuals having direct

family and financial nexus with the Corporate Debtor.

17. This factual matrix leaves no doubt that the Appellant Company is a

related party of the suspended management of the Corporate Debtor, and

that the transaction under scrutiny cannot be characterised as a dealing by

an unrelated third party. The absence of formal cross-shareholding between

appellant No.1 and CD does not dilute the reality of common family control,

continuity of business, and shared economic interest, particularly in the

context of insolvency and liquidation proceedings.

18. Having thus established the undisputed nexus and relationship

between all concerned parties and entities, we proceed to examine the

conduct of the Appellants in raising allegations of forgery and fraud, and the

timing thereof, in the context of the impugned order.

19. It is an admitted position on record that the Agreement to Sell is dated

13.12.2019. It is also not disputed that pursuant to this Agreement, a sum

of Rs. 1 crore was received, by the M/s SSMP Agro Export Private Limited, a

company controlled by Mr. Sagar Kunwar and Mr. Shrey Kunwar, the sons

of Mr. Manoj Kunwar, the promoter and ex-director of the Corporate Debtor,

M/s SSMP Industries Ltd. These facts are not denied by the Appellants.

Company Appeal (AT) (Ins.) No. 227 of 2025 -26-

20. We note that Agreement to Sell is a vital document giving factual

details about the transaction. We now examine the relevant portions of

agreement to sell dated 13.12.2019, which is extracted below:

Company Appeal (AT) (Ins.) No. 227 of 2025 -27-

Company Appeal (AT) (Ins.) No. 227 of 2025 -28-

Company Appeal (AT) (Ins.) No. 227 of 2025 -29-

Company Appeal (AT) (Ins.) No. 227 of 2025 -30-

Company Appeal (AT) (Ins.) No. 227 of 2025 -31-

21. The following points are noted from the sale agreement:

(i) The sale agreement is for Rs. 6,59,52,000/- and was executed on

13.12.2019 at Bangarupalaym Mandal, Chitoor Distt. A.P.

(ii) M/s SSMP Industries (Corporate Debtor), represented by its

Managing Director/ Authorised signatory Mr. Manoj Kunwar

(Respondent No.2) is the vendor. The vendor is the absolute owner

of the scheduled property.

(iii) Sh. Manoj Kunwar, Managing Director of the vendor company has

been authorised by the Directors of the vendor company as per

resolution dated 25.11.2019 to sign and to deal on behalf of the

vendor company

(iv) Sh. A. Ravindra Naidu (Respondent No.6) and Sh. V. Kamalapathi

Naidu (Respondent No.7) are the vendees.

(v) In pursuance of the above agreement the Vendees herein have paid

1,00,00,000/- (Rupees one crore only) from their bank accounts

through RTGS in to the bank Account of Vendor Account bearing

No. 03361100051790 in the following manner:

(a) Rs.50,00,000/- from Punjab & Sind Bank, Banglore under UTR

No. CNRBR52019121300721667 by 1st Vendee

(b) Rs.50,00,000/- from State Bank of India, Bangarupalyam under

UTR No. SBINR52019121300136137 by 2nd vendee.

Company Appeal (AT) (Ins.) No. 227 of 2025 -32-

(vi) The details of the land of the CD in the Chitoor Distt. are mentioned

in the agreement.

(vii) The agreement has been signed by Respondent No.2 as vendor and

Respondent No. 6 and 7 as vendees.

22. We now take a look at the details of payment made by the vendees.

The same are extracted below:

Company Appeal (AT) (Ins.) No. 227 of 2025 -33-

23. The first document shows the payment of Rs. 50 lakhs made by vendee

1 Sh. A. Ravindra Naidu through RTGS, which clearly shows the UTR No.

mentioned in the sale agreement and account mentioned in the sale

agreement which belongs to SSMP Agro Exports.

24. The second document shows the payment of Rs. 50 lakhs by the

vendee 2 Sh. V. Kamalapathi Naidu through RTGS transfer. Even though

UTR No. is not mentioned in the said document, but the bank account details

Company Appeal (AT) (Ins.) No. 227 of 2025 -34-

of receiving party are clearly mentioned, which is the bank account of SSMP

Agro Exports.

25. It is stated in the Agreement to Sell that the aforesaid funds have been

transferred to the vendor, which is SSMP Industries Pvt. Ltd. (Corporate

Debtor). But the bank account mentioned in the Agreement to Sell is that of

SSMP Agro Export Pvt. Ltd. (Appellant No.1)

26. It is also relevant to note that the Corporate Debtor had already

entered CIRP and subsequently entered in liquidation w.e.f. 31.07.2019. The

liquidator was in charge of the CD during the period when the aforesaid

agreement to sell was executed by the Respondent No.2. At the relevant point

of time, Respondent No.2 had no authority to sell or dispose of any asset of

the CD which was in moratorium.

27. The Liquidator, in the course of discharging his statutory duties,

examined transactions affecting the liquidation estate and filed I.A. No. 3827

of 2022 before the Learned NCLT questioning the legality of the Agreement

to Sell and the receipt of Rs. 1 crore. Even at this stage, while contesting the

application before the Adjudicating Authority, the Appellants did not

contemporaneously pursue any criminal remedy alleging forgery with

urgency or seriousness.

28. Despite the execution of the Agreement to Sell in December 2019 and

receipt of money at that time, no FIR, police complaint, or civil suit alleging

forgery or fraud was lodged since 2019 till 12.12.2023. This is significant

because, according to the Appellants, the Agreement was forged from the

Company Appeal (AT) (Ins.) No. 227 of 2025 -35-

very beginning. If that were so, a reasonable and expected course of conduct

would have been to immediately approach the police or a competent court

upon discovering the alleged forgery.

29. From a reading of the police complaint dated 12.12.2023 (Annexure-

F), it is clear that the grievance raised therein relates to alleged coercion,

intimidation, and forcible extraction of cheque and cash amounts by the

accused persons. The complaint refers to offences under Sections

384/386/34 IPC and narrates allegations of threats, forced signatures on a

cheque of Rs. 20,00,000, seizure of mobile phones, and removal of cash.

Importantly, there is no specific allegation in the complaint that the

Agreement to Sell dated 13.12.2019 was forged or fabricated, nor is there

any averment stating that the Agreement itself is fraudulent. The complaint

does not even refer to the Agreement to Sell as being void, manipulated, or

forged. The entire narration is confined to alleged coercive acts on

12.12.2023 and the demand for money. Thus, the police complaint does not

contain any explicit assertion that the Agreement of Sale is a forged

document, which further weakens the subsequent plea that the Agreement

itself is fraudulent.

30. If the Appellants' claim of fraud were genuine and bona fide, nothing

prevented them from initiating criminal proceedings much earlier--either at

the time of execution of the Agreement, at the time of receipt of money, or at

least when the Liquidator first questioned the transaction vide letter dated

09.06.2022. The IA No. 3827 of 2022 was filed by the liquidator on

11.08.2022. The appellant, in his reply to IA No. 3827 dated 19.11.2022, in

Company Appeal (AT) (Ins.) No. 227 of 2025 -36-

para 5, did not plead fraud about the alleged agreement to sell and only

pleaded that these are baseless allegations filed by Respondents No. 6 and 7

to harass the Respondent No. 2 herein.

31. We are conscious that allegations of forgery are serious and fall within

the domain of criminal courts. However, in insolvency proceedings, the

conduct of the parties, their timing, and their consistency are crucial factors

in evaluating the credibility of such defences. The Adjudicating Authority was

not called upon to decide criminal guilt, nor has it done so. It confined itself

to examining whether an unauthorised transaction affecting liquidation

estate property had resulted in receipt of money which ought to be restored

to the estate.

32. It is also important to emphasise that the impugned order of Ld.

Adjudicating Authority does not get into the matter of determination of fraud

if any. The Ld. AA proceeded on a simpler and legally correct premise that

once liquidation has commenced, no person, whether related or otherwise,

can deal with property of the liquidation estate, without authority of the

Liquidator. Any money received pursuant to such a transaction cannot be

retained, irrespective of whether the underlying document is valid or forged.

33. Therefore, even if the criminal complaint ultimately results in an

independent inquiry or prosecution, it does not dilute the statutory

consequence under the Insolvency and Bankruptcy Code. The post-order

filing of a criminal complaint cannot be permitted to undermine the

liquidation process or to defeat the protection afforded to creditors. Accepting

Company Appeal (AT) (Ins.) No. 227 of 2025 -37-

such a course would allow parties to frustrate insolvency proceedings by

raising criminal allegations only after adverse orders are passed.

34. It is also to note here that the appellants have now claimed that the

amount of Rs. 1 Crore was received as initial funding and shown as an

unsecured loan in the books of account. However, if this was the case, they

should have taken this plea before the Adjudicating Authority in the first

place. The records on the contrary shows that no such plea was taken by the

appellant in their submissions/ reply before the Adjudicating Authority. This

plea has been taken for the first time before us. The relevant portion of their

submission in Reply to IA No. 3827 has been extracted below:

"3. The said Application has been filed by the Liquidator solely on

the basis of the information provided by the Respondent No. 8 to 9

that Rs. 1 Crores were paid to SSMP Agro Export Private Limited

(Respondent No. 5) as part-consideration under the Agreement to

Sell. The entire basis of the present Application qua the Answering

Respondents is statement of the Respondent No. 8 to 9.

Surprisingly, Respondent No. 8 to 9 have never entered appearance

in the present Application, perhaps they may not have been served

with the notice or wilfully choosing to remain absent.

5. Further, the present Application does not allege any specific or

direct role to Respondent Nos. 6 and 7 in the context of the alleged

grievances. The references made are general and indirect, citing an

unsubstantiated allegation of conspiracy with Respondent No. 1.

Such vague allegations do not meet the threshold of specificity and

relevance required for sustaining a party's involvement in a

Company Appeal (AT) (Ins.) No. 227 of 2025 -38-

proceeding before this Hon'ble Tribunal. The inclusion of

Respondent Nos. 6 and 7 without any concrete allegations against

them is not only unjust but is an abuse of process.

6. Moreover, the principle of limited liability and separate legal

personality of a company distinctly outlines that directors or

employees of a company cannot not be dragged into litigation as

parties. Claims (if any) are to be raised against the Respondent

No.5.

7. In light of the aforementioned reasons and in the interest of

justice and fair play, it is imperative that Respondent Nos. 6 and 7

be deleted from the array of parties.

B. PRAYERS A & B OF THE APPLICATION ARE CONTRARY

8. At the outset, it is submitted that the allegations qua the

Answering Respondents are denied and that the Respondent No. 5

is not party to the Agreement to Sell. The purported sum of Rs. I

Crores alleged to have been received under the Agreement to Sell is

denied. Without prejudice to the above, the Respondents would like

to point out that the Prayer A & B are contrary to each other, and

the present proceedings are nothing but legal harassment at the

hands of the Liquidator.''

35. It can be seen that in their written submissions before the AA, the

appellant No. 2 and 3 herein (Mr. Sagar Kunwar and Mr. Shrey Kunwar

respectively) have taken a stand that they are not a necessary party to the

aforesaid IA and they should be deleted from the array of parties.

Company Appeal (AT) (Ins.) No. 227 of 2025 -39-

36. The second submission of the appellants in IA 3827 was that they are

not a party to the agreement to sell and the receipt of Rs. 1 crore qua the

agreement to sell was denied. At no point in their reply did they raise the

issue of the amount being paid to the appellant No. 1 in lieu of unsecured

loan. This plea was not taken in their submission before the AA. The

proceedings before the Ld. AA were conducted on the basis that the amount

was received pursuant to the Agreement dated 13.12.2019 concerning the

land of the Corporate Debtor. The plea that the amount was merely an

unsecured loan appears to have been developed subsequently in this

Appellate Forum.

37. It is true that learned counsel for the Appellants has submitted that

the amount of Rs. 1 crore is reflected in their balance sheet as an unsecured

loan. However, a mere accounting entry cannot by itself determine the true

nature of a transaction. No loan agreement with the creditor, no board

resolution, no repayment schedule, no interest clause, and no

correspondence have been placed on record to show that the amount was

advanced as a genuine unsecured loan. In the absence of supporting

documentation, a subsequent book entry cannot override the surrounding

facts, which consistently connect the payment with the Agreement to Sell

dated 13.12.2019 relating to the Corporate Debtor's land. Therefore, the plea

that the amount was merely an unsecured loan appears to have been

developed subsequently in this Appellate Forum.

38. In view of the above factual sequence and surrounding circumstances,

we note that the transaction under question is related party transaction, as

Company Appeal (AT) (Ins.) No. 227 of 2025 -40-

CD is a family business of Father, Mother and grandmother of the appellant

No. 2 and 3, who are the owners of Appellant No.1. We further note that the

allegation of forgery, raised belatedly, lacks credibility at this stage and

appears to be an afterthought adopted as a defensive measure. The Learned

AA was therefore justified in proceeding on the material before it and in

directing restoration of Rs. 1 crore to the liquidation estate in order to

safeguard creditor interests.

39. We will now examine the case laws cited by the Appellants to support

their challenge to the impugned order:

i. Anuj Jain, Interim Resolution Professional for Jaypee

Infratech Limited v. Axis Bank Limited & Ors., (2020) 8 SCC

401:

In Anuj Jain (supra), the Hon'ble Supreme Court examined the

scope of avoidance transactions under Sections 43 to 51 of the

Insolvency and Bankruptcy Code, 2016, and held that such

provisions can be invoked only when the statutory ingredients are

strictly satisfied. The judgment was rendered in the context of

preferential and undervalued transactions entered into by the

Corporate Debtor prior to commencement of insolvency

proceedings. In the present case, however, the controversy does

not relate to avoidance of a pre-CIRP transaction. What is under

consideration is an unlawful transaction undertaken during the

moratorium period in liquidation proceedings, involving a

property included in liquidation estate without authority of the

Company Appeal (AT) (Ins.) No. 227 of 2025 -41-

Liquidator. The direction to deposit Rs. 1 crore flows from the need

to restore funds to the liquidation estate and safeguard creditor

interest, and not from the avoidance framework discussed in Anuj

Jain (supra).

ii. Balwant Rai Saluja & Anr. v. Air India Limited & Ors., (2014)

9 SCC 407 : In Balwant Rai Saluja (supra), the Hon'ble Supreme

Court reiterated the principle of separate legal personality and

cautioned that lifting of the corporate veil is an exception and

cannot be undertaken mechanically. The Appellants have relied

on this principle to contend that Appellant No.1, being a separate

legal entity, cannot be proceeded against. In the present case,

however, the Adjudicating Authority has not lifted the corporate

veil merely on account of relationship or control. The inquiry

undertaken was limited to examining receipt of money in

connection with an unlawful sale of a property of the Corporate

Debtor included in the liquidation estate during the moratorium

period. The direction issued is restorative in nature, aimed at

protecting the liquidation estate, and is not in the teeth of the ratio

laid down in Balwant Rai Saluja (supra).

40. We will now examine the judgments cited by the Respondent in the

context of the present factual matrix:

i. In Satori Global Limited & Anr. v. Shailja Krishna & Ors., 2023

SCC OnLine NCLAT 249, this Tribunal held that serious

allegations of forgery or fraud cannot be finally decided in

Company Appeal (AT) (Ins.) No. 227 of 2025 -42-

summary insolvency proceedings and must be examined by a

competent civil court after full evidence. Similarly, in Shelendra

Kumar Sharma v. DSC Limited, 2019 SCC OnLine NCLAT

1274, it was held that complex disputes involving fraud should

not be conclusively determined in IBC proceedings. These

judgments support the Respondents in the present case. The

Adjudicating Authority has not decided whether the Agreement to

Sell is forged or genuine. It has not given any finding on criminal

liability. Instead, it has simply directed that money received in

connection on unlawful sale of property included in the

liquidation estate during the moratorium period must be restored.

Therefore, the NCLT has acted exactly in line with the above

judgments by not entering into a detailed fraud trial and by

limiting itself to protecting the liquidation estate. ii. In Desh Raj & Ors. v. Rohtash Singh, (2023) 3 SCC 714, the

Hon'ble Supreme Court held that courts cannot grant relief

beyond what is prayed for in the pleadings. Likewise, in Akella

Lalitha v. Kond Hanumantha Rao & Anr., 2023 SCC OnLine

SC 928, it was reiterated that courts must confine themselves to

the relief sought. In the present case, the Liquidator had

challenged the Agreement to Sell and the receipt of Rs. 1 crore

relating to the Corporate Debtor's land. The direction to deposit

Rs. 1 crore is directly connected to that challenge and is necessary

to protect the liquidation estate. It is not a new or unrelated relief.

Therefore, the Adjudicating Authority has acted within the scope

Company Appeal (AT) (Ins.) No. 227 of 2025 -43-

of the pleadings and in accordance with the law laid down by the

Hon'ble Supreme Court.

41. In view of the findings above, we do not find any infirmity in the

impugned order dated 20.12.2024 passed by the Adjudicating Authority in

I.A. No. 3827 of 2022 filed in C.P. (IB) No. 495 (ND) 2017. The appeal is

dismissed. Pending I.As, if any, are closed. There shall be no order as to

costs.

[Justice N Seshasayee] Member (Judicial)

[Mr. Arun Baroka] Member (Technical)

[Mr. Indevar Pandey] Member (Technical)

SA/Pragya (LRA)

Company Appeal (AT) (Ins.) No. 227 of 2025