# In the matter of KGS Sugar and Infra Corporation Ltd.

> NCLT judgment dated 2024-05-03. Citation: TCN-2024-NCLT-01442. This case involves an application (IA 1133/2022) filed by Mr. Sunil G. Kundnani against Mr.…

- **Court:** NCLT
- **Order date:** 3 May 2024
- **Citation:** TCN-2024-NCLT-01442
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/kgs-sugar-and-infra-corporation-ltd-5e036a29

## Summary

### Background

This case involves an application (IA 1133/2022) filed by Mr. Sunil G. Kundnani against Mr. Pankaj Shyam Joshi in the matter of KGS Sugar & Infra Corporation Limited (Corporate Debtor) under Section 60(5) of the Insolvency and Bankruptcy Code, 2016. The applicant seeks to be excluded as a respondent in IA 1444/2021, summoning of the instant respondent U/rule 39 of NCLT rules, initiating proceedings U/s 424(4) of the Companies Act r/w Sec 340 of Cr PC, and appropriate reliefs in terms of prayer clause/s 'a to c and such other directions given the factual matrix/circumstances of the present matter. The respondent filed an affidavit stating that an Order issuing a Show Cause Notice has serious consequences, and the same necessarily has to be based on reasons qua the

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## Facts

Mr. Sunil G. Kundnani filed IA 1133/2022 seeking to be excluded as a respondent in IA 1444/2021, which pertains to allegations of fraudulent transactions against KGS Sugar & Infra Corporation Limited (Corporate Debtor). Mr. Kundnani argues he is not a director or key managerial personnel. The respondent, Mr. Pankaj Shyam Joshi, contends that Mr. Kundnani was the auditor of the Corporate Debtor and its group companies, and his wife holds 1% shares in the Corporate Debtor. A forensic audit report identifies Mr. Kundnani as 'key personnel' due to his role as previous auditor and current CFO of the Corporate Debtor. The report also alleges that Mr. Kundnani was the auditor of related parties involved in round tripping of funds. The Committee of Creditors (CoC)

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## Issues and analysis

### Issue 1: Whether the applicant, Mr. Sunil G. Kundnani, should …

**Ratio:** The court held that it would be premature to delete the applicant as a party in IA No.

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**Reasoning:** The court reasoned that IA 1444/2021 is yet to be heard on merits, and the applicant's

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**Interpretation:** This implies that the court prioritizes a comprehensive examination of all

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**Application:** The court applied this reasoning to the specific facts of the case, considering

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## Parties

- **Judges:** Prabhat…; V.G. B…
- **Appellants:** Sunil G. Ku…
- **Respondents:** KGS Sugar & Infra…; Pankaj Shya…

## Timeline

- **2019-01-01 — C.P.(IB) No. 2156/MB/201…**: The matter is registered as…
- **2019-11-25 — 1st CoC M…**: At the 1st Committee of Creditors (CoC) meeting of the corporate debtor, it was resolved…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 60(5) — Adjudicating Authority for corporate persons](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-60)

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