# In the matter of Maylari Agro Products Limited

> NCLT judgment dated 2024-02-15. Citation: TCN-2024-NCLT-02576. The case involves an application (I.A 539 of 2022) filed by the Resolution Professional (RP) of…

- **Court:** NCLT
- **Order date:** 15 Feb 2024
- **Citation:** TCN-2024-NCLT-02576
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/maylari-agro-products-limited-692483f5

## Summary

### Background

The case involves an application (I.A 539 of 2022) filed by the Resolution Professional (RP) of Mylari Agro Products Limited, seeking to declare certain agreements entered into by the former directors of the Corporate Debtor (Mr. Mahesh and Mr. Vaddarahally Puttaswamygowda Prakash) with Shree Sai Marketing (SSM) and RVI Enterprises as null and void. These agreements, a consignment forwarding agents agreement and a distribution agreement, were entered into after the initiation of the Corporate Insolvency Resolution Process (CIRP) of the Corporate Debtor. The RP contends that the former directors had no authority to enter into these agreements and that the respondents received payments directly from SSM and RVI Enterprises, which were not credited to the Corporate

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## Facts

The Corporate Insolvency Resolution Process (CIRP) of Mylari Agro Products Limited was initiated on 08.03.2021. After the initiation of CIRP, the former directors of the Corporate Debtor, Mr. Mahesh and Mr. Vaddarahally Puttaswamygowda Prakash, entered into a consignment agreement with Shree Sai Marketing (SSM) on 19.03.2021 and a distribution agreement with RVI Enterprises on 09.04.2021. Shree Sai Marketing made a claim for a refund of Rs. 21,64,445 from the Corporate Debtor, stating that the Corporate Debtor had already received Rs. 15,64,445 in advance. RVI Enterprises also made a claim for Rs. 10 Lakh, stating it was paid to the Corporate Debtor as a security deposit. These amounts were not credited to the Corporate Debtor's accounts but were allegedly received

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## Issues and analysis

### Issue 1: Whether the agreements entered into by the former directors of the Corporate Debtor with Shree Sai …

**Ratio:** Section 17(1)(b) of the Insolvency and Bankruptcy Code (IBC) stipulates that the powers

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**Reasoning:** The Tribunal reasoned that since the agreements were entered into after the initiation of

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**Interpretation:** This section implies that any actions taken by the former directors after the

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**Application:** The Tribunal applied this principle to the facts of the case, concluding that

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## Parties

- **Judges:** K. Bi…; Manoj Kumar…
- **Appellants:** Shirley M…
- **Respondents:** Mylari Agro…; Mr.Ma…
- **Advocates:** Aishwarya…

## Timeline

- **2020-01-01 — CP (IB) No.02…**: Mention of the case…
- **2021-03-08 — CIRP Init…**: CIRP initiated for Mylari…

## 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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