# In the matter of Chuo Senko Advertising India Private Limited

> NCLT judgment dated 2023-11-01. Citation: TCN-2023-NCLT-00893. The Resolution Professional, Shri Manoj Kumar, filed an application (IA 2578/2021) against M/s.…

- **Court:** NCLT
- **Order date:** 1 Nov 2023
- **Citation:** TCN-2023-NCLT-00893
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/chuo-senko-advertising-india-private-limited-92fba216

## Summary

### Background

The Resolution Professional, Shri Manoj Kumar, filed an application (IA 2578/2021) against M/s. Chuo Senko Advertising India Private Limited (Corporate Debtor) under Section 66(1) of the Insolvency & Bankruptcy Code, 2016, seeking orders against the suspended directors and other parties for fraudulent transactions. The application was filed in the matter of Corporate Insolvency Resolution Process (CIRP). The applicant sought orders to direct the respondents to remit amounts allegedly diverted from the Corporate Debtor's account.

## Facts

The Resolution Professional filed an application alleging fraudulent transactions by the Corporate Debtor, M/s. Chuo Senko Advertising India Private Limited. The application was filed against the suspended directors (R1 to R3), former director Shri Mandeep Malhotra (R4), Tata Capital Financial Services Limited (R5), and Muthoot Finance Limited (R6). The applicant claimed that the respondents had fraudulently diverted funds from the Corporate Debtor's account. Specifically, the applicant alleged that R4 authorized payments to R5, R6, and other entities without proper documentation or justification. The applicant also claimed that R4 continued to authorize payments even after resigning as a director. The forensic auditor's report revealed that the Corporate Debtor had

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## Issues and analysis

### Issue 1: Whether the payments made by the Corporate Debtor to Tata Capital Financial Services Limited (R5) …

**Ratio:** The burden of proof lies on the applicant to demonstrate that the payments were made with

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**Reasoning:** The court found that R5 was paid against invoices raised in the ordinary course of

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**Interpretation:** The court interpreted that payments made in the ordinary course of business,

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**Application:** The court applied the ratio to the facts and concluded that the payments to R5

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## Parties

- **Judges:** Prabhat…; V.G. B…
- **Appellants:** Manoj K…
- **Respondents:** M/s. Chuo Senko…; Chew Sow…

## Timeline

- **2019-09-24 — CIRP Commen…**: CIRP against the…
- **2019-10-13 — Public Annou…**: IRP caused public announcement in two…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 66(1) — Fraudulent trading or wrongful trading](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-66)

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