Mumbai, Jan 23 : The National Company Law Tribunal (NCLT) has dismissed a plea by Andheri-based Enviro Home Solutions Private Limited, which sought corporate insolvency proceedings against Santacruz-based Max Publicity and Communication Private Limited.
In its detailed order, the tribunal shed light on a suspected larger scam involving several entities, including Suumaya Industries, Veda Multicorp LLP, and other vendors, linked to allegedly fraudulent Corporate Social Responsibility (CSR) transactions.
The tribunal observed that the matter pointed to a “much larger conspiracy” requiring an in-depth investigation by agencies such as the Registrar of Companies (RoC), Income Tax Department, Economic Offences Wing (EOW), and Serious Fraud Investigation Office (SFIO).
Alleged Fraudulent Transactions
At the core of the case are allegations of sham transactions tied to a fraudulent CSR scheme. Max Publicity, the corporate debtor, had agreements with Veda Multicorp LLP and Suumaya Industries. These agreements reportedly facilitated bogus transactions through falsified invoices and forged documents.
The petitioner, Enviro Home Solutions, claimed it had entered into a contract with Max Publicity in August 2021, supported by a Letter of Intent (LoI) and a purchase order. It issued tax invoices worth ₹14.45 crore and delivered goods with repeated assurances of payment. However, the payments were not made, and in January 2022, Max Publicity disputed the validity of the transactions.
Max Publicity’s Defense
Max Publicity refuted the claims, arguing that the alleged transporter, SD Freight Carrier, did not exist at the address mentioned on the lorry receipts. Additionally, the delivery location was reportedly a vacant plot, and Veda’s office was nonexistent at the stated address. The company alleged that no goods were actually supplied and that the transactions were fabricated.
Tribunal’s Findings
The tribunal’s 20-page order outlined inconsistencies in Max Publicity’s claims. Despite reversing the sales transactions worth ₹387.67 crore and ₹14.45 crore in March 2022, the company did not refund payments it had already received, raising suspicions of its involvement in fraudulent activities.
The tribunal also noted that Max Publicity could not escape liability due to the legal principle of “in pari delicto” (equal fault).
Investigation Ordered
Instead of initiating insolvency proceedings, the NCLT directed regulatory authorities to thoroughly investigate:
– Alleged sham transactions involving Suumaya Industries, Veda Multicorp LLP, Max Publicity, and other vendors.
– Fraudulent CSR obligations and the role of all entities involved.
– Claims of forged invoices and fictitious facilities used in the transactions.
The tribunal’s decision underscores the need for transparency and accountability in CSR practices and signals strict action against fraudulent corporate activities.
