2020 (12) TMI 1131 - Tri - Insolvency and Bankruptcy

Prayer to classify the Applicant as the Financial Creditor - Section 60 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - It is found that the Applicant has annexed the letter dated 30.11.2018 issued to AMW Motorworks Limited. Vide said letter, the Applicant demanded ₹ 10 Crores from AMW Motorworks Limited paid on 24.10.2007 through Cheques along with 18% interest per annum. The said letter was issued by Chief Operating Officer. Apart from that, no other document such as an agreement or any promissory note is annexed, so as to infer the date of disbursement of the loan - on comparison with the demand notice dated 30.11.2018 (at page no. 43 of the application) with that of the Ledger Account from the period 01.04.2007 to 31.03.2008 (at page no. 52 of the application), it is found that Cheque no. 001291 is of ₹ 4 Crores whereas the date of cheque clearance is of 25.10.2017 and for other two cheques, the clearance date is of 2007 when the Ledger Account is of the period 01.04.2007 to 31.03.2008. Hence, the document so filed by the Applicant is/ are contradictory to the statements made in the application, in as much as, the cheque which was issued in 2007, how it could be cleared in the year 2017. Under such circumstances, it is difficult to assess the bonafide of the Applicant. Furthermore, apart from these documents, Applicant has annexed the statement of account at page no. 53 of the application showing the period 2005 to 2014. However, on perusal of the said statement, it is found that it is originating from 16.11.2013 to 18.11.2013 only, which in our opinion is an irrelevant document which does not reflect the date of disbursement of loan amount - Evidently and admittedly, as per their own document in the application annexed at page no. 43, reflects the said amount is paid on 24.10.2007 through three cheques. To that effect, no agreement/ promissory note has been entered into. The claim is not free from iota of doubt. Accordingly, the instant application is rejected. However, with regard to the ₹ 5 Crores which is acknowledged by the Corporate Debtor maybe taken in to account by the IRP, as Claims other than Operational Creditor and Financial Creditor. Application dismissed.

Summary

Issues: Classification of Applicant as Financial Creditor under Section 60 of IB Code.

Detailed Analysis:

Issue 1: Classification of Applicant as Financial Creditor
The case involved an application under Section 60 of the Insolvency and Bankruptcy Code, 2016, seeking classification of the Applicant as a Financial Creditor. The Financial Creditor, Indian Overseas Bank, initiated Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, which was admitted by the Adjudicating Authority. The Applicant submitted a claim of &8377; 16,35,25,444/- along with documents, but the Respondent disputed the claim, acknowledging liability only for &8377; 5 Crores and denying the status of the Applicant as a Financial Creditor.

Issue 2: Dispute Over Loan Disbursement
The Respondent denied the Applicant's claim, citing lack of agreement, balance sheet, or board resolutions authorizing the loan disbursement in compliance with relevant provisions of the Companies Act, 2013. The Books of Account of the Corporate Debtor reflected an amount of &8377; 5 Crores only, leading the Respondent to request the Applicant to file Form-F for claims other than Operational and Financial creditors.

Issue 3: Examination of Documentary Evidence
Upon examination of the documentary evidence provided by the Applicant, discrepancies were found regarding the date of disbursement of the loan. The ledger account showed cheques dated 24.10.2007, totaling &8377; 10 Crores, but a demand notice dated 30.11.2018 indicated a different amount. The documents submitted were contradictory, raising doubts about the authenticity and bonafide of the Applicant's claim.

Issue 4: Lack of Supporting Documentation
The Applicant failed to produce essential documents such as agreements, promissory notes, board resolutions, or conclusive evidence of the loan disbursement amounting to &8377; 16,35,25,444/-. The absence of proper documentation and discrepancies in the submitted materials weakened the credibility of the Applicant's claim.

Issue 5: Rejection of Claim
Considering the inconsistencies, lack of supporting documentation, and doubts surrounding the claim, the Tribunal rejected the Applicant's application to be classified as a Financial Creditor. However, the acknowledged liability of &8377; 5 Crores by the Corporate Debtor was deemed admissible as a claim other than Operational or Financial Creditor, to be considered by the Interim Resolution Professional.

In conclusion, the Tribunal dismissed the application due to the lack of conclusive evidence, discrepancies in documentation, and failure to meet the legal requirements for establishing the Applicant as a Financial Creditor under the Insolvency and Bankruptcy Code.