IN RE Vs. FORTUNE PHARMA PRIVATE LIMITED

JUDGEMENT

(1.) This is an application filed under section 73 and section 77 of the Insolvency and Bankruptcy Code 2016 read with Rule 11 of National Company Law Tribunal Rules 2016. This application has been filed by the State Bank of India mainly contending that the Corporate Insolvency Resolution Process has been commenced by virtue of the Orders of this Tribunal against the Corporate Debtor/Company i.e. Fortune Pharma Private Limited on 28.08.2017 and Mr. Martin S. K. Golla was appointed as Interim Resolution Professional to initiate the Insolvency Resolution Process. It is said this Application is arising pursuant to the First Monthly Report dated 27th October 2017 served by the IRP Mr. Martin S. K. Golla subsequent to the orders of the Bench dated 28.08.2017. Mr. Sudhakar Haribhau Mulay and Mr. Vikram Sudhakar Mulay, Directors/Promoters of Corporate Debtor have executed personal guarantees in favour of the Applicants. The Applicant initiated recovery proceedings against the Company to enforce the securities under the SARFAESI Act and the District Magistrate, Aurangabad, by order dated 23rd March 2016, directed the Company and its Directors to hand over peaceful possession of the factory premises situated at Aurangabad to SBI.

(2.) It is further contented that up to the date of initiation of CIRP process viz. 29.06.2017 being the date when section 10 application was filed by the Corporate Debtor before NCLT, Mumbai, the Applicant I.e. SBI was the sole Financial Creditor of the Company. Apart from creating numerous hindrances caused to the Applicant, the Corporate Debtor had executed few assignment deeds for assigning debts in a manner in which it reduced Applicant's percentage of voting share from 100% to 55% during the period between 29.06.2017 and 28.08.2017 so that the Applicant herein no more remains to be the sole Financial Creditor. It is said in the Application that the Corporate Debtor has no intentions of reviving its own business and Directors/Promoters are only going to liquidate all assets at the very first instance they may get. But they always assured the Applicant that they intended to sell the secured Assets and possibility of revival of its business operations due to cheaper imports from China which has been shut down by the Government due to pollution issues. No sooner was this Tribunal passed Order dated 28.08.2017 they (SBI) received several calls and also letters from Mr. Martin S.K. Golla seeking the access to the factory premises possessed by the Applicant including an email dated 19.09.2017. The Applicant in good faith had handed over the physical possession of the factory formally on 25.09.2017 in the hope that the IRP shall make all endeavours to protect and preserve the property and put in all the efforts to revive the operations of the Company and manage them as a going concern. To the utter shock and surprise of the Applicant, on receipt of the Monthly Report dated 17th October, 2017 from IRP, the Corporate Debtor has created two unsecured Financial Creditors viz. Brainer Impex Limited by Mulay Constructions Private Limited and Pankaj Yadav by Sudhakar H. Mulay after initiation date viz. 29.06.2017 but prior to Insolvency commencement date viz. 28.08,2017 vide Deed of Assignment dated 01st July 2017. Now by virtue of the Assignment Deeds executed in favour of Brainer Impex Limited and Mr. Pankaj Yadav the voting power of the Applicant had come down to 55% as against 100%. It is also an admitted fact that earlier Mr. Sudhakar H. Mulay and Mulay Constructions Private Limited were regarded as "related parties" and the total voting share of Committee of Creditors remained with the Applicant.

(3.) It is stated, in the Monthly Report dated 17th October 2017 submitted before the NCLT by the IRP, it reflects that IRP proceeded to appoint Registered Valuers even prior to initiation of CIRP process. Mulay Constructions Private Limited holds about 22.50% of shares in the Corporate Debtor but had advanced unsecured Loans to the extent of Rs.9,75,17,470.50. Mulay Constructions is not only a shareholder but also a Corporate Creditor. In the same manner, Mr. Sudhakar H. Mulay who holds 19.01% in the total equity share capital of the Corporate Debtor is also an unsecured creditor and the related party. Hence Mr. Pankaj Radhakrishna Yadav could never have any voting rights in the meeting of CoC. It is also suspected on the part of the IRP that certain documents annexed to the Monthly Report disclose siphoning off monies from the accounts of the Corporate Debtor. The malicious act of allegedly creating a Financial Creditor who is not a related party to Corporate Debtor in a manner to reduce the voting share of the Applicant Financial Creditor post filing of section 10 Application by the Corporate Debtor but before the admission of the same is nothing but an after-thought with ulterior motive and mala fide intention on the part of the Corporate Debtor to reduce the voting right of the Applicant from 100% to 55%. This act which was hidden from the Applicant Financial Creditor establishes non-transparency, wilful and deliberate suppression and mala fide intent on the part of the Corporate Debtor.