Third-party land sellers to Corporate Debtors not covered under Section 66 of IBC

Jakson Limited Vs Three C Universal Developers Pvt Ltd (NCLT Delhi)

NCLT Delhi held that third persons such as the Applicants who sold their land to the Corporate Debtor, cannot said to be falling within the ambit of expression “any persons who were knowingly parties to the carrying on the business of the Corporate Debtor” as used in Section 66 of the Insolvency and Bankruptcy Code.

Facts- The application was preferred under Section 9 of IBC, 2016 by M/s Jakson Limited (Operational Creditor) against M/s Three C Universal Developers Private Limited (Corporate Debtor) and this Tribunal in terms of order dated 17.02.2019 directed the initiation of Corporate Insolvency Resolution Process against the Corporate Debtor. Presently, Mr. Rakesh Kumar Gupta (Respondent) is acting as the Resolution Professional qua the Corporate Debtor.

The Respondent had preferred applicaton under Section 66 of the Code wherein Respondent Nos. 1-2 are the suspended directors and the Nos. 3-5 are promoters qua the CD and the Applicants herein are arrayed as Respondents No. 6-9. It is the contention of the RP that the Respondents had defrauded the creditors of the Corporate Debtor to the tune of Rs. 66,70,00,000/-by way of certain transactions regarding purchase of land whereby the Corporate Debtor and its subsidiary, M/s Three C Infratech Private Limited, separately purchased certain agricultural land parcels from the Respondent No. 6-9 in I.A. No. 3054/2021 at exorbitant rates with the intention to defraud the creditors of the Corporate Debtor.