Jaykishan R Rathi Liquidator of Baid Industries Private Limited Vs Ashok Kumar Baid Suspended Board of Director of Baid Industries Pvt. Ltd.& Ors. (NCLT Ahmedabad)
The National Company Law Tribunal (NCLT), Ahmedabad, decided an application filed by the Resolution Professional, later pursued by the Liquidator, under Sections 45, 49, 68, 69, 70(a), (b), 70(e), 236 and 67 of the Insolvency and Bankruptcy Code, 2016 (IBC), read with Regulation 35A of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016 and Rule 11 of the NCLT Rules, 2016. The application sought orders against the respondents in respect of alleged fraudulent transactions, recovery of amounts allegedly lost through such transactions, and restoration of Rs. 5,14,24,288 to the Corporate Debtor.
The Corporate Debtor was engaged in the yarn business and entered CIRP pursuant to an order dated 07.12.2022. The Committee of Creditors comprised State Bank of India (SBI) and Meliora Asset Reconstruction Company Ltd. Liquidation commenced on 19.04.2024, and the applicant was appointed as liquidator.
According to the applicant, GIDC had allotted a 99-year leasehold industrial plot measuring 51,039.74 square metres to the Corporate Debtor, and the property was mortgaged in favour of SBI and Dena Bank under consortium lending arrangements securing credit facilities. The applicant stated that the mortgage and charges were duly registered with the Registrar of Companies and reflected in revenue records. After Dena Bank assigned its debt to Meliora Asset Reconstruction Company Ltd., Meliora initiated proceedings under Section 7 of the IBC. During pendency of those proceedings, SBI entered into a One Time Settlement (OTS) with the Corporate Debtor, released its charge over 37,104 square metres of land, and issued a partial No Objection Certificate (NOC). The applicant alleged that the suspended directors thereafter transferred subdivided plots between July and August 2022 despite the continuing charge of Meliora ARC over the land, without obtaining consent from the secured creditor. The applicant further contended that GIDC was aware of the mortgage and charge because it had earlier granted permission for creation of charge under the lease deed.
