EGT Entertainment IRP Seeks CIRP Termination Over Fraud Allegations

Case Name: Mr. Amit Pareek (IRP of EGT Entertainment Private Limited) vs. Ms. Sonu Gupta (Liquidator of PAN India Network Limited) & Others

Court/Authority: National Company Law Tribunal (NCLT), Guwahati Bench

Case Numbers: IA (IBC)/39/GB/2025 connected with CP (IB)/17/GB/2024

Date of Order: 19th May 2026

Presiding Officers: Hon'ble Member (Judicial) Shri Rammurti Kushawaha and Hon'ble Member (Technical) Shri Yogendra Kumar Singh

Period of Dispute: The CIRP was initiated on 07.04.2025, with allegations covering events from 2020 to 2025.

Petitioner/Applicant: Mr. Amit Pareek, Interim Resolution Professional of EGT Entertainment Private Limited

Respondents:

R-1: Ms. Sonu Gupta, Liquidator of PAN India Network Limited (Financial Creditor)
R-2: Mr. Dinesh Jayeshwar, Suspended Director of EGT Entertainment
R-3: Mr. Mukesh Singh, Suspended Director of EGT Entertainment

Corporate Debtor: EGT Entertainment Private Limited (Registered in Sikkim under Registration of Companies (Sikkim) Act, 1961)

Financial Creditor: PAN India Network Limited (Under Liquidation since 21.12.2021)

The IRP alleged that the CIRP was initiated fraudulently and with malicious intent under Section 65 of IBC, based on:

Collusive Initiation: The Financial Creditor (PAN India Network) holds 99.99% shares in the Corporate Debtor (EGT Entertainment), and its Liquidator (R-1) proposed herself as IRP despite being a related party, violating Regulation 3(1)(b) of IBBI CIRP Regulations read with Section 5(24)(i) & (j) of IBC.

Defective Service of Notices: Demand notices dated 15.07.2024 and 28.07.2024 were allegedly not properly served. The first notice was acknowledged at a Mumbai office (where CD claimed no presence), and the second was returned undelivered. The Section 7 application was filed without proper service to CD's registered office.

Non-Filing of Claim: Despite initiating CIRP, R-1 did not file any claim in response to the public announcement, preventing constitution of COC and stalling the process.

Concealment of Assets and Non-Cooperation: The suspended directors (R-2 & R-3) failed to provide complete records, bank details, minute books, and location of fixed assets with WDV of ₹3.77 crore (impaired in FY 2023-24). Investments in debentures of PIUDCL (₹12.99 crore) and Creative Gaming (₹15.63 crore) were not properly disclosed.

Contradictory Stands: CD claimed no operations since 2020 and no office, but financial statements showed substantial assets and investments. Board resolutions were passed in 2024 authorizing counsel and impairing assets, contradicting claims of dormancy.

The Tribunal made several key observations:

Scope of Section 65: Emphasized that Section 65 is penal and requires cogent evidence of fraudulent or malicious intent at inception, not mere procedural defects or subsequent disinterest.

Authorization for Initiation: Noted that R-1 initiated CIRP pursuant to permission from NCLT Mumbai (in IA 2315/2023) and consultations with Stakeholders' Consultation Committee of PAN India Network, which authorized action against subsidiaries.

Proposal as IRP: While proposal of R-1 (Liquidator of holding company) as IRP was not ideal and could create conflict, it did not amount to fraud as the Tribunal appointed an independent IRP (Mr. Amit Pareek).

Service Defects: Irregularities in service of notices and application did not establish fraud, especially since CD's directors appeared through counsel and did not contest the admission.

Non-Filing of Claim: R-1's failure to file claim and subsequent no-objection to termination reflected lack of seriousness but did not prove malicious initiation. The decision was based on SCC consultation and commercial considerations.

Non-Cooperation: While suspended directors' conduct showed inconsistencies and poor record-keeping (e.g., claiming no office but passing board resolutions), it was more relevant under Section 19(2) for non-cooperation rather than Section 65 for fraudulent initiation.

Debt and Default: Acknowledged that debt of ₹2.42 crore and default were reflected in audited financial statements of both entities, and were not fabricated.

The Tribunal dismissed the application (IA 39/GB/2025) and did not impose any penalties under Section 65.

The CIRP against EGT Entertainment remains admitted, but termination may be sought separately as R-1 has no objection.

No specific corrective actions or future obligations were mandated by the Tribunal in this order.

The IRP may pursue separate applications for termination of CIRP under appropriate provisions.

Issues of non-cooperation by suspended directors may be addressed under Section 19(2) in pending IA 36/2025.

The application under Section 65 was dismissed for lack of conclusive evidence of fraudulent or malicious initiation.

The Tribunal found that while there were irregularities and lack of diligence, the threshold for Section 65 was not met.

The file was consigned to records, and the Registry was directed to send copies to all parties.

The CIRP of EGT Entertainment continues, subject to any future applications for termination.