# In the matter of Chuo Senko Advertising India Private Limited

> NCLT judgment dated 2023-11-01. Citation: TCN-2023-NCLT-00903. The Resolution Professional, Shri Manoj Kumar, filed an application (IA 2578/2021) under…

- **Court:** NCLT
- **Order date:** 1 Nov 2023
- **Citation:** TCN-2023-NCLT-00903
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/chuo-senko-advertising-india-private-limited-99e91f81

## Summary

### Background

The Resolution Professional, Shri Manoj Kumar, filed an application (IA 2578/2021) under Section 66(1) of the Insolvency & Bankruptcy Code, 2016, against M/s. Chuo Senko Advertising India Private Limited (Corporate Debtor). The application sought orders against the suspended directors and other parties to remit amounts allegedly diverted fraudulently from the Corporate Debtor's account. The CIRP against the Corporate Debtor commenced on 24.09.2019. The applicant sought to recover funds diverted during the period when Mandeep Malhotra (R4) was a director, and even after his resignation. The applicant also sought to recover funds transferred to Tata Capital Financial Services Limited (R5) and Muthoot Finance Limited (R6).

## Facts

The Resolution Professional (RP) filed an application alleging fraudulent transactions by the Corporate Debtor. The Corporate Debtor's CIRP commenced on 24.09.2019. The RP identified several transactions that appeared suspicious, including payments to Tata Capital Financial Services Limited (R5), Muthoot Finance Limited (R6), and other entities. Mandeep Malhotra (R4), a former director of the Corporate Debtor, authorized many of these transactions, even after his resignation. The RP appointed a Forensic Auditor to examine the Corporate Debtor's accounts. The Forensic Auditor faced difficulties in examining the accounts due to the lack of audited accounts and the non-cooperation of the suspended management. The RP found that a payment of Rs. 1,60,00,000/- was

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## Issues and analysis

### Issue 1: Whether the payment of Rs. 1,60,00,000/- to M/s. Digi Communications Private Limited (Digi) on …

**Ratio:** Section 66 of the Insolvency and Bankruptcy Code, 2016 allows the adjudicating authority

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**Reasoning:** The Tribunal noted that Digi Communications Private Limited, the payee, no longer exists

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**Interpretation:** The Tribunal interpreted that the non-existence of the payee and the lack of

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**Application:** Since the amount was paid under the authorization of R4, the Tribunal held that

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## Parties

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

## Timeline

- **2019-09-24 — Commencement…**: The Corporate Insolvency Resolution Process…
- **2019-10-13 — Public Annou…**: The Interim Resolution Professional (IRP) made a public announcement in newspapers…

## 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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