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2020 (5) TMI 129 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Financial debt or not - Corporate Debtor has failed to make repayment of its debt - existence of debt and dispute or not - Time Limitation - HELD THAT - The applicant has failed to file the agreement entered in between the parties regarding the debt, which the applicant claim to be deposited in the account of Desiya Hotel and Resorts P. Ltd. Further, the applicant has also failed to produced any documents to show that what was the agreed term of interest, which applicant are entitled to get in case of default of payment - the applicant has also failed to produce any document to show that as per the agreed terms the Desiya Hotel and Resorts P. Ltd., which was required to repay the loan amount within certain period and if he fails to repay the amount during such period then on that day, the default occurred and that is the reason the applicant claim that the date of default is the date when he sent the notice of demand to Desiya Hotel and Resorts P. Ltd. Time Limitation - HELD THAT - As per the provision of article 137 of the Limitation Act, so far the recovery of money is concerned, the person is required to file the application within three years when the cause of action arises - Here the case in hand, the applicants has failed to show what is the date of cause of action or what is the date of actual default. Therefore in my opinion, since the last amount claimed by the applicant was defaulted on December 26, 2014, December 29, 2014 and August 25, 2014 therefore limitation runs from that day. Since this application has been filed on June 27, 2019, therefore, in my opinion it is much after the 3 years as provided under the law. So the present application is also barred by law of limitation. The applicants failed to produce any document to show that what was the agreed interest in between the parties on the basis of which money was borrowed. Therefore, the case of the applicant, does not comes under section 5(8)(a) of the I and B Code and further it is found that it also does not come either under (b) or (c) or (d) or (e) or (f) or (g) or (h) or (i) of section 5(8) of the I and B Code. Therefore, I am unable to accept the contention of the applicant that these deposit annexed as annexure 1 comes under financial debt and they comes under the definition of financial creditor in view of section 5(7) of the I and B Code - this Adjudicating Authority is of the considered view that in absence of any document, the contention of the applicant is not liable to accepted and the applicants fails to prove that there deposit as per annexure 1 comes under the definition of financial debt under section 5(8) of the IBC and deposited amount as claimed is not barred by law of limitation The application filed under section 7 is not according to the provision of law and is not complete thus this application is not liable to be admitted - Application admitted - moratorium declared.
Issues Involved:
1. Establishment of financial debt. 2. Default in payment by the corporate debtor. 3. Documentation and evidence of default. 4. Limitation period for filing the application. 5. Definition of financial debt under section 5(8) of the Insolvency and Bankruptcy Code (IBC). Detailed Analysis: 1. Establishment of Financial Debt: The applicants, Pramendra Kumar Mittal, Rameshwar Chand Mittal, and Nisha Mittal, claimed that they had provided an unsecured loan amounting to ?1,60,00,000 to the corporate debtor, Desiya Hotel and Resorts P. Ltd. The petitioners filed the application under section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the corporate insolvency resolution process against the corporate debtor due to non-repayment of the loan. 2. Default in Payment by the Corporate Debtor: The applicants alleged that the corporate debtor defaulted in repaying the loan, with the total amount claimed in default being ?2,43,47,467. Despite sending a notice of repayment on February 18, 2019, which was received by the respondent on February 19, 2019, no amount was repaid, nor was there any response from the corporate debtor. 3. Documentation and Evidence of Default: The applicants annexed several documents to prove the existence of the financial debt, including the balance-sheet of the corporate debtor for the years 2015-2018 and proof of the legal demand notice. However, the application lacked crucial documents such as the agreement detailing the loan terms, the agreed interest rate, and evidence of the agreed repayment schedule. The tribunal noted that the applicants failed to fill in several columns in Part V of the application, which were crucial for establishing the default. 4. Limitation Period for Filing the Application: The tribunal observed that the last payments made by the applicants were on December 26, 2014, December 29, 2014, and August 25, 2014. The application was filed on June 27, 2019, which was beyond the three-year limitation period as per Article 137 of the Limitation Act. The tribunal emphasized that the applicants failed to specify the actual date of default or cause of action, leading to the conclusion that the application was barred by the limitation period. 5. Definition of Financial Debt under Section 5(8) of the IBC: The tribunal examined whether the amount claimed by the applicants qualified as a "financial debt" under section 5(8) of the IBC. It was noted that the applicants did not provide any evidence to show that the loan was disbursed against the consideration for the time value of money, nor did they specify any agreed interest rate. The tribunal concluded that the deposits made by the applicants did not meet the criteria for financial debt as defined under section 5(8) of the IBC. Conclusion: The tribunal dismissed the application, stating that the applicants failed to establish the existence of a financial debt, provide necessary documentation, and prove that the application was within the limitation period. The tribunal also held that the claimed amount did not qualify as a financial debt under the IBC, leading to the rejection of the prayer to initiate proceedings under section 7 of the IBC against Desiya Hotel and Resorts P. Ltd.
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