# In the matter of Kumar Aquatech Agencies Private Limited

> NCLT judgment dated 2023-10-18. Citation: TCN-2023-NCLT-01132. The case involves an application filed by the Resolution Professional (RP) of Kumar Aquatech…

- **Court:** NCLT
- **Order date:** 18 Oct 2023
- **Citation:** TCN-2023-NCLT-01132
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/kumar-aquatech-agencies-private-limited-76b6bbd7

## Summary

### Background

The case involves an application filed by the Resolution Professional (RP) of Kumar Aquatech Agencies Private Limited under Section 66 read with Section 60(5)(c) of the Insolvency and Bankruptcy Code (IBC), 2016. The RP sought contributions from the respondents, who are the suspended board of directors, to the assets of the corporate debtor, alleging fraudulent transactions, misuse of company funds, and wrongful trading. The Corporate Insolvency Resolution Process (CIRP) was initiated against Kumar Aquatech Agencies Private Limited, and the applicant was appointed as the Interim Resolution Professional (IRP). A forensic audit was conducted by M/s Sarath & Associates at the behest of the State Bank of India, the financial creditor, to investigate the books of

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## Facts

Kumar Aquatech Agencies Private Limited is undergoing Corporate Insolvency Resolution Process (CIRP). The Resolution Professional (RP) filed an application under Section 66 of the Insolvency and Bankruptcy Code (IBC), 2016, alleging fraudulent transactions by the suspended board of directors (Respondents). The RP claims that Rs. 9,74,14,192/- was transferred to various entities between 13.12.2016 and 23.01.2017. The Financial Creditor, State Bank of India, appointed M/s Sarath & Associates to conduct a forensic audit of the Corporate Debtor. The forensic audit report indicated suspicious transactions and non-cooperation from the respondents. The RP sent an email on 15.09.2022 requesting the respondents to provide proof of the transactions, but received no response.

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## Issues and analysis

### Issue 1: Whether the application filed by the Resolution Professional under Section 66 of the Insolvency and …

**Ratio:** An application under Section 66 of the IBC, alleging fraudulent trading, requires

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**Reasoning:** The NCLT reasoned that the forensic audit report, which formed the basis of the RP's

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**Interpretation:** Section 66 of the IBC deals with fraudulent or wrongful trading. The

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**Application:** In this case, the NCLT found that the forensic audit report was inconclusive

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## Parties

- **Judges:** Venkata Ramakrishn…; SH. CHARAN…
- **Appellants:** Dommeti Surya…
- **Respondents:** Kumar Aquatech…; Kadiyala Sankar…

## Timeline

- **2013-11-26 — Incorporation of…**: Kumar Aquatech Agencies…
- **2016-12-13 — Start of Alleged…**: Period during which the Resolution…

## 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)

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