# In the matter of Gems Care & Cure Health Center Private Limited CP (IB) No. 201 of 2019

> NCLT judgment dated 2020-06-02. Citation: TCN-2020-NCLT-01262. The case involves an application filed by the Resolution Professional (RP) alleging that the…

- **Court:** NCLT
- **Order date:** 2 Jun 2020
- **Citation:** TCN-2020-NCLT-01262
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-chandigarh/gems-care-cure-health-center-private-limited-cp-ib-no-201-of-2019-b4a2d054

## Summary

### Background

The case involves an application filed by the Resolution Professional (RP) alleging that the directors of the suspended board of the Corporate Debtor (CD), Gems Care & Cure Health Centre Private Limited, were unauthorizedly transferring/siphoning funds from the CD's account in HDFC Bank after the commencement of the Corporate Insolvency Resolution Process (CIRP). The RP sought directions for the respondents (directors) to cooperate, provide details of transactions, and refund the siphoned amount. The CIRP was initiated on 29th August, 2019. The RP discovered a bank account of the CD in HDFC Bank, Rashbehari Branch, and requested the bank to suspend activities in the account. However, the bank allegedly did not adhere to the RP's instructions. The directors

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## Facts

Gems Care & Cure Health Centre Private Limited (Corporate Debtor) is undergoing CIRP. The Resolution Professional (RP) discovered that the directors of the suspended board (Respondents 1-3: Ms. Ranjana Khanna, Mr. Sibayan Sarkar, Mr. Saurav Mukherjee) were allegedly transferring/siphoning funds from the Corporate Debtor's (CD) account in HDFC Bank after the CIRP commencement on 29th August 2019. The RP visited HDFC Bank on 4th September 2019 and requested suspension of activities in the account. The bank provided a statement on 12th March 2020, which indicated that the bank had not adhered to the RP's instructions. The directors allegedly violated the moratorium under Section 14 of the IBC by operating the account and making substantial transactions without the

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## Issues and analysis

### Issue 1: Whether the directors of the Corporate Debtor violated the moratorium under Section 14 of the …

**Ratio:** Section 14 of the Insolvency and Bankruptcy Code imposes a moratorium on the assets of

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**Reasoning:** The court observed that the respondents admitted to making transactions after the CIRP

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**Interpretation:** Section 14 is interpreted strictly to prevent any dissipation of the Corporate

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**Application:** In this case, the directors' operation of the bank account and making

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## Parties

- **Judges:** Jinan…
- **Appellants:** Rajesh L…
- **Respondents:** Gems Care & Cure…; Ranjana K…

## Timeline

- **2019-08-29 — CIRP Commen…**: CIRP commenced for Gems Care & Cure Health Centre Private Limited as per the order of the…
- **2019-09-04 — RP Visits HD…**: The RP visited HDFC Bank, Rashbehari Branch, and requested suspension of activities in…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 19 — Personnel to extend co-operation to interim…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-19)

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