# In the matter of Gajanan Solvex Limited

> NCLT judgment dated 2024-05-07. Citation: TCN-2024-NCLT-01413. The case involves an application (I.A. No. 677 of 2023) filed by the Resolution Professional…

- **Court:** NCLT
- **Order date:** 7 May 2024
- **Citation:** TCN-2024-NCLT-01413
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/gajanan-solvex-limited-eccc8e24

## Summary

### Background

The case involves an application (I.A. No. 677 of 2023) filed by the Resolution Professional (Mr. Vijendra Kumar Jain) of the Corporate Debtor (Gajanan Solvex Limited) under Section 66 of the Insolvency and Bankruptcy Code, 2016, seeking directions against the suspended board of directors (Respondents: Mr. Nitin Ramchandra Jadhav & Ors.) for fraudulent and wrongful trading. The Corporate Debtor was admitted into Corporate Insolvency Resolution Process (CIRP) on 20.07.2022. Allegations include misreporting of investments in a subsidiary company (Rio Resource PTE Ltd.), fraudulent transactions, and failure to disclose liabilities. A forensic audit revealed discrepancies in the Corporate Debtor's financial statements and transactions.

## Facts

The Corporate Debtor, Gajanan Solvex Limited, was admitted into CIRP on 20.07.2022. Mr. Vijendra Kumar Jain was appointed as the Interim Resolution Professional (IRP) and later as the Resolution Professional (RP). A Committee of Creditors (CoC) was formed on 12.08.2022. A forensic audit was conducted, revealing that the Corporate Debtor had invested Rs.8,84,91,725/- in its subsidiary, Rio Resource PTE Ltd. Rio Resource PTE Ltd. had a fixed deposit of 3 million USD with the Indian Bank, Singapore Branch. The Indian Bank filed an application against Gajanan Oil Private Limited before the Bombay High Court. The audited financials of the Corporate Debtor as on 31.03.2022 showed an investment of Rs.8,84,91,725/- in Rio Resource PTE Ltd., but the shares had been transferred

…

## Issues and analysis

### Issue 1: Whether the suspended board of directors of the Corporate Debtor engaged in fraudulent trading or …

**Ratio:** Section 66(1) of IBC, 2016 deals with 'Fraudulent Trading' and Section 66(2) of IBC, 2016

…

**Reasoning:** The court relied on the forensic audit report, which highlighted several irregularities,

…

**Interpretation:** The court interpreted Section 66 of the IBC to mean that directors have a duty

…

**Application:** The court applied the ratio to the facts of the case, finding that the

…

## Parties

- **Judges:** Reeta K…; SANJIV…
- **Appellants:** Vijendra Kumar…
- **Respondents:** Gajanan Solvex…; Nitin Ramchandra…

## Timeline

- **2022-07-20 — CIRP Admi…**: Corporate Debtor admitted under Corporate…
- **2022-08-12 — CoC Form…**: Committee of Creditors…

## Legal provisions

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

---

This is a preview. The full structured summary, issues, precedents and source judgment are available on CaseEase - Legal Intelligence Simplified: https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/gajanan-solvex-limited-eccc8e24