BEFORE THE HON’BLE NATIONAL COMPANY LAW TRIBUNAL

HYDERABAD BENCH
I.A. NO. OF 2023
IN
C.P. (IB) 269/9/HDB/2018
BETWEEN:
MONITORING COMMITTEE THROUGH
STATE BANK OF INDIA
SAM Branch, Secunderabad, H No.5-9-76,2nd
Floor, Prabhat Towers, Opp. Amaravathi LHO,
Chapel Road, Gunfoundry, HYDERABAD-
500001
…Applicant
AND
MR. GHANSHYAM SURAJBALI KUMRI
(Director - powers suspended) Apex Drugs
Limited, 210, 2nd Floor, Ram’s Enclave,
Erragadda, Hyderabad – 500018, Telangana.
…Respondent No. 1
MR. SANDEEP KUMAR VERMA
(Director - powers suspended) Apex Drugs
Limited, 210, 2nd Floor, Ram’s Enclave,
Erragadda, Hyderabad – 500018, Telangana.
…Respondent No. 2
APPLICATION FILED BY THE APPLICANT UNDER SECTION 60 (5) OF THE
INSOLVENCY AND BANKRUPTCY CODE, 2016 R/W SECTION 66, 67 AND 69 OF
THE INSOLVENCY AND BANKRUPTCY CODE, 2016.
Filed on:
Filed by:
Counsels for the Applicant
JURIS PRIME LAW SERVICES
V V S N RAJU
A V P REDDY
PRAVEEN JAIN
SRIKANTH RATHI
ABHAY TRIPATHI
AISHWARYA N.
ADVOCATES
Office at Plot No. 33, J K Enclave, Rao and Raju Colony, Near Lucid Diagnostics, Road
no 2,
Banjara Hills, Hyderabad- 500034
Ph: - 9866446467; Email: raju@jurisprime.com

BEFORE THE HON’BLE NATIONAL COMPANY LAW TRIBUNAL

 HYDERABAD BENCH
I.A. NO. OF 2023
IN
C.P. (IB) 269/9/HDB/2018
BETWEEN:
MONITORING COMMITTEE THROUGH
STATE BANK OF INDIA
SAM Branch, Secunderabad, H No.5-9-76,2nd
Floor, Prabhat Towers, Opp. Amaravathi LHO,
Chapel Road, Gunfoundry, HYDERABAD-
500001
…Applicant
AND
MR. GHANSHYAM SURAJBALI KUMRI
(Director - powers suspended) Apex Drugs
Limited, 210, 2nd Floor, Ram’s Enclave,
Erragadda, Hyderabad – 500018, Telangana.
…Respondent No. 1
MR. SANDEEP KUMAR VERMA
(Director - powers suspended) Apex Drugs
Limited, 210, 2nd Floor, Ram’s Enclave,
Erragadda, Hyderabad – 500018, Telangana.
…Respondent No. 2
APPLICATION FILED BY THE APPLICANT UNDER SECTION 60 (5) OF THE
INSOLVENCY AND BANKRUPTCY CODE, 2016 R/W SECTION 66, 67 AND 69 OF
THE INSOLVENCY AND BANKRUPTCY CODE, 2016.
INDEX OF DOCUMENTS

S. No. Date Particulars Annexure Page No.

1. Application filed by the Applicant under
Section 60 (5) of the Insolvency And
Bankruptcy Code, 2016 R/W Section 66,
67 and 69 of the Insolvency and
Bankruptcy Code, 2016.
Affidavit verifying the Application
2. Annexure 1
3. Annexure 2
4. Annexure 3
5. Annexure 4

DATE:

PLACE:

COUNSEL FOR THE APPLICANT

BEFORE THE HON’BLE NATIONAL COMPANY LAW TRIBUNAL

 HYDERABAD BENCH
I.A. NO. OF 2023
IN
C.P. (IB) 269/9/HDB/2018
BETWEEN:
MONITORING COMMITTEE THROUGH
STATE BANK OF INDIA
SAM Branch, Secunderabad, H No.5-9-76, 2nd
Floor, Prabhat Towers, Opp. Amaravathi LHO,
Chapel Road, Gunfoundry, HYDERABAD-
500001
…Applicant
AND
MR. GHANSHYAM SURAJBALI KUMRI
(Director - powers suspended) Apex Drugs
Limited, 210, 2nd Floor, Ram’s Enclave,
Erragadda, Hyderabad – 500018, Telangana.
…Respondent No. 1
MR. SANDEEP KUMAR VERMA
(Director - powers suspended) Apex Drugs
Limited, 210, 2nd Floor, Ram’s Enclave,
Erragadda, Hyderabad – 500018, Telangana.
…Respondent No. 2
APPLICATION FILED BY THE APPLICANT UNDER SECTION 60 (5) OF THE
INSOLVENCY AND BANKRUPTCY CODE, 2016 R/W SECTION 66, 67 AND 69 OF
THE INSOLVENCY AND BANKRUPTCY CODE, 2016.
Most Respectfully Showeth:
I. PARTICULARS OF THE APPLICANT

The Application is filed by the Monitoring Committee of the Corporate Debtor

through State Bank of India having its office at SAM Branch, Secunderabad, H No.

5-9-76, 2nd Floor, Prabhat Towers, Opp. Amaravathi LHO, Chapel Road,

Gunfoundry, Hyderabad - 500001.

II. PARTICULARS OF THE RESPONDENTS

The Respondent No. 1 i.e., Mr. Ghanshyam Surajbali Kumar is the suspended

director of the Apex Drugs Limited (Corporate Debtor) having its registered office

at 210, 2nd Floor, Ram’s Enclave, Erragadda, Hyderabad – 500018, Telangana.

The Respondent No. 2 i.e., Mr. Sandeep Kumar Verma Kumar is the suspended

director of the Apex Drugs Limited (Corporate Debtor) having its registered office

at 210, 2nd Floor, Ram’s Enclave, Erragadda, Hyderabad – 500018, Telangana.

III. JURISDICTION
 The present Interlocutory Application is being preferred under Company

Application bearing C.P. (IB) No. 269/9/HDB/2018 which was filed under Section

9 of the IB Code, 2016. It is submitted that as the said Company Petition was filed

before this Hon’ble Tribunal, hence, this Hon’ble Tribunal has the Jurisdiction to try

the instant I.A.

IV. LIMITATION

The Applicant submits that the present I.A. is not battled by the provisions of the

Limitation Act or any other provisions of law and is well within the period of

limitation.

V. FACTS OF THE CASE

1. It is submitted that M/s Zheijang Tongxiang Foreign Trade (Group) Co. initiated

CIRP proceedings against the Corporate Debtor under Section 9 of the IB Code,

2016 and the same was admitted by the Hon’ble Tribunal vide Order dated

06.09.2018 and the Hon’ble Tribunal appointed Mr. Maligi Madhusudhana Reddy

as the Interim Resolution Professional.

2. It is submitted that in the 2 nd CoC meeting the said Interim Resolution Professional

was replaced by Mr. Kapil Dev Taneja as the Resolution Professional and the

Hon’ble Tribunal vide order dated 26.11.2018 along with the confirmation letter of

IBBI dated 10.12.2018 confirmed the appointment of Mr. Kapil Dev Taneja as the

RP.

3. It is submitted that the RP in discharge of its duties perused the books of accounts

of the CD and found that certain transactions of irregular nature were carried out

by the CD before the commencement of the CIRP. It is submitted that for carrying

out audit in order to facilitate the Applicant to report such transactions to the

Adjudicating Authority they appointed professional services.

4. It is submitted that in the 8th CoC Meeting held on 07.05.2019, the members of the

CoC changed the transaction auditor from M/s J. Singh & Associates to M/s Ganta

and Associates for determining the transactions under section 66 of the IB Code,

2016. It is submitted that the Transaction Auditor submitted the transaction audit

report on 29.05.2019 and the same was placed before the CoC by the RP in the 10 th
 CoC Meeting held on 31.05.2019 and the transactions carried out by the CD were

held as preferential, undervalued and fraudulent. The CoC directed the RP to file

an appropriate application before the Tribunal.

5. It is submitted that in the Transaction Audit Report following was reported-

a) During the Financial Year 2015-2016, CD has written off assets worth Rs. 140,

65, 13, 323/-.

b) During the Financial Years 2016-2017 and 2017-2018 it was reported that the

assets were written off worth Rs. 5,03, 24, 200/- (short term loans and

advances) and Rs. 11, 70, 829/- (cash and bank balances) respectively.

c) It is also observed that the stock reports which has been written off were not

available before and during the audit period.

d) It is observed that the Corporate Debtor due to unavailability of the list of

debtors (receivables) and their ageing, but from total receivable figure they

have written off 95% as non-recoverable.

e) It is also noted that the book of accounts of the CD have not reconciled with the

Bank Accounts and some bank accounts are not supported with the bank

statements to review the transaction under the scope of audit. The CD’s books

of receivables are not maintained and the list is not available with the auditor

who has prepared the financial based on the available book of accounts.

6. It is submitted that as per the Transaction Audit Report, it is demonstrated that

such transactions, as carried out by the Corporate Debtor, have been identified as

fraudulent. The said transactions appear to have been entered with an intent to

defraud the creditors of the Corporate Debtor. Moreover, in case of such

transaction, the applicability of look back period does not arise. It is submitted that

therefore the RP filed I.A. No. 531 of 2019 in the instant Company Petition against

the preferential, wrongful and fraudulent transactions done by the CD under

Section 66 of the IB Code, 2016. It is submitted that Section 25(2)Q) read with

Section 66,67 and 69 read with Section 60(5) of the IBC, 2016 provides for

fraudulent or wrongful trading and consequences thereof. It is submitted that if

during the CIRP or liquidation process, it is found that any business of the
 Corporate Debtor has been caried on with an intent to defraud creditors of the

Corporate Debtor or for any fraudulent purpose, this Hon'ble Tribunal may, on an

application pass an order that any person who were knowingly parties for

carrying on such business, shall be liable to make such contributions to the assets

of the Corporate Debtor, as this Hon'ble Tribunal may deem fit.

7. It is submitted that the RP in I.A. No. 531 of 2019, prayed before the Ld.

Adjudicating Authority to declare the Transactions, as reflected in the Audit

Report as Fraudulent/wrongful trading and for passing appropriate order under

Section 66 of IBC, especially directing the Respondents to make such contribution

towards the assets of the Corporate Debtor.

8. It is submitted that the Hon’ble Tribunal vide Order dated 08.09.2021 in I.A. No.

531 of 2019 held that as per the Transaction Audit Report the financial year 2015-

2016, the corporate debtor has written off assets worth Rs. 140,65,13,323/- which

resulted the corporate debtor in huge loss and the same was continued in the

following financial years, i.e., 2016-2017 and 2017-2018, which reported the written

off of the assets to the tune of Rs. 5,03,24,300/- only to defraud the creditors. The

Hon’ble Tribunal held that the Corporate Debtor indulged inwritten off in the

financial year 2015-2016 to the tune of 95% of the assets and further the books of

account/records of the Corporate Debtor in respect of the assets written off was

also not maintained. It was also recorded that no worthwhile record was

maintained by the Corporate Debtor to prove that those transactions were genuine

transactions. The Hon’ble Tribunal in para 14 of the Order dated 08.09.2021 held

that that the written off done by the Respondents during the relevant period is for

defrauding the creditors of the CD.

9. It is submitted that the Hon’ble Tribunal vide corrigendum dated 17.09.2021 under

Rule 154(1) of the NCLT Rules, 2016, held that in respect of para 14 of order dated

08.09.2019, the said Para be read as "Although it is contended by the Resolution

Professional that an amount of more than Rs. 145 Crores appears to be siphoned

off by the Respondents but during submission the learned counsel for the

Resolution Professional restricted prayer of contribution to the extent of Rs.

5,14,95,129/- only stating that this much is the amount due and payable to the

creditor of the Corporate Debtor. We appreciate and accept his gesture. Hence,

although we noted that an amount of more than Rs- 145 Crores appears to be

siphoned off, we pass following order subsidizing contribution amount to the

extent of Rs. 5,14,95,129/-."