Mr. Pradeep Suri and Mr. Jitendra Joshi are friends since their school days. They are seasoned professionals and masters of their respective domains. Mr. Suri is a civil engineer having expertise in the business of construction and development of real estate. Alongwith the degree in the civil engineering, Suri also did Post Graduation in Finance, which gave him a reasonable understanding of financial matters. Mr. Joshi is a pharmacy expert and a promoter of two pharmaceutical companies. Apart from this, he also holds the post of Chancellor in a private University, based in North India. Mr. Suri is a popular name in the real estate industry. He is a promoter and director of Dreams Developers and Realtor Limited (DDRL). DDRL is well-known for making residential buildings, corporate offices, and corporate plazas with ultra-modern state of art. Affordable housing is the need of hour, on account of rapid growth of urbanization in the region. Mr. Suri recognized this need and came up with an aspirational project, LIGHT (Low Income Group Housing Township); an affordable housing scheme. 

Project LIGHT will comprise of 8 wings of 6 floors each, including the ground floor. Each floor will have an independent apartment with a carpet area equivalent to 80 square meters. The base area to be developed is 125% of the carpet area, which includes a parking area and a garden. After considering the market and economic conditions that emerged due to the widespread threat of COVID-19, the Board of DDRL collectively decided that rather starting the entire project at one go; the project should be broken down into phases (each wing represent a phase) and shall implement the project LIGHT in a phased manner. At the board meeting, it is also decided to perform some major renovations and redevelopment work at one of the projects named, ‘AWAS’ which was completed by DDRL in the year 2015, completion certificate regarding which was obtained before the enforcement of RERA. Due to under-ground wiring of fibre-optical wires on the side of roads, the roads and drainage system got damaged badly and DDRL became liable to fix it as part of the sale agreement. Hence, at the request of residents (buyers) at AWAS, DDRL decided to do the necessary renovations on the roads and drainage system and also a certain amount of re-development works in the area of community hall, for the purpose of operationalise it, which was left half-constructed; due to some legal aspects at that time. Some of the flats that remained unsold at AWAS will be advertised for sale after re-development. The father of Mr. Suri fell ill and was diagnosed with the chronic disease of cancer. Mr. Suri immediately made necessary arrangements to send his father for treatment to the world’s best-known hospital for curing cancer in Houston, Texas (US). One of the old friends of Mr. Suri’s wife is working there as a nurse. Mr. Kunal, an Indian resident, and nephew of Mr. Suri, accompanied with his father as an attendant to Houston. A sum of USD 400,000 was credited to the hospital in Houston, against the estimation given by doctors under the seal of the hospital. USD 200,000 is also remitted to Mr. Kunal for meeting his expenses as an attendant for taking care of his father. One of the properties owned by DDRL was suspected to be ‘Benami’ under the Prohibition of Benami Property Transactions Act, 1988, regarding which Mr. Suri got the notice to furnish the information within 10 days from the date of receipt of the notice. In order to make travelling and other necessary arrangements for sending his father to Houston, Mr. Suri failed to respond the notice to the Authority. Amongst the two pharmacy companies of which Mr. Joshi is a promoter, one is Prism Pharma Limited (PPL). PPL is supplying API (Active Pharmaceutical Ingredients) to other pharmaceutical companies. One amongst such buyers was Gelix Pharma Limited. Gelix Pharma Limited didn’t make payment to PPL, despite giving multiple reminders. Finally, PPL issued a demand notice under section 8 of IBC, 2016, demanding payment of the operational debt in respect of which default had occurred. No response to such demand notice was given due to which PPL made an application under section 9 of IBC, 2016 which got admitted by the adjudicating authority initiating the corporate insolvency resolution process (CIRP). Adjudicating authority made an order appointing the interim resolution professional and declaring a moratorium. In the first meeting of the committee of creditors, the interim resolution professional is resolved to be appointed as the resolution professional by a vote of 70% of the voting share of the financial creditors. One of the directors of Gelix Pharma Limited, who has given a personal guarantee against one of the borrowings of the company is very happy after the declaration of moratorium under section 14 of IBC, 2016 because he believes, now no legal action can be taken against him also. 

From the draft resolution plan, it seems clear to PPL, that their dues will hardly be satisfied and hence they apply to NCLT for withdrawal of their application filed earlier. Ms. Ankita Joshi, daughter of Mr. Joshi is studying international business at the University of Sheffield, London (UK), and Mr. Joshi remitted an amount equivalent to USD 275,000 in foreign currency through an authorised dealer (without any permission from RBI) to her daughter for her university fees and personal expenses during the financial year. University fees were approximately USD 100,000 during the year. This spring semester she completed her master's program and returned back to India under the ‘Vande Bharat mission’. She joined the same university as a director in which her father is a chancellor. Ms. Ankita bought a luxurious apartment for herself at a cost of ₹1.15 crores out of the funds sponsored for the trust of the university. On the same day, the property was shown to be purchased at a price of ₹35 lakhs to the sub-registrar of properties in order to save stamp duty on it and the property was duly registered in the name of Ms. Ankita; the fair value on the date of registration date was ₹1.20 crores. The transaction came in the scanner of authorities and the said transaction was declared as ‘Benami Transaction’ and Ms. Ankita was accused as a ‘Benamidar’ in the final order passed under the relevant provisions of the Prohibition of Benami Property Transactions Act, 1988. The fair market value of the property on the date of the order was ₹1.40 crores.What are the consequences of failure to respond to the notice from the relevant authority under the Prohibition of Benami Property Transactions Act, 1988, by Mr. Suri. 

Does it make any difference that Mr. Suri was engaged in making necessary arrangements to send his father Houston who was diagnosed with cancer.