2022 (2) TMI 203 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - financial debt or not -existence of debt and dispute or not - WhatsApp conversation between the Parties can be admitted as evidence or not - pecuniary jurisdiction. Whether this application is maintainable and whether it is within the pecuniary jurisdiction of this Tribunal? - HELD THAT - This Petition is filed before this Tribunal on 10.11.2020. The notification enhancing the pecuniary limits of this Tribunal is dated 24.03.2020. By virtue of the said notification issued by Ministry of Corporate Affairs, Government of India, the pecuniary limits are raised from ₹ 1 Lakh to ₹ 1 Crore w.e.f. 24.03.2020 - In the reply written submissions it is contended that the notification issued by the Central Government does not confer power upon the Tribunal to act retrospectively. But the Petitioner's Counsel fails to show that the Petition was filed before the NCLT, Hyderabad Bench prior to the notification - Hence the disputed amount being less than the pecuniary jurisdiction of this Tribunal, the Application needs to be rejected on that count. Whether the WhatsApp conversation between the Parties can be admitted as evidence? - HELD THAT - The counsel tries to interpret section 20 of the Companies Act, in a way to admit the electronic evidence without section 65B certificate. But the said argument does not at all impress this Tribunal. Section 20 is only with regard to the service of notice on the opposite party. The proof of service through electronic mode would not form part of a record as an evidence whereas the WhatsApp messages are filed to be admitted as evidence. Hence it cannot be said that Section 20 of the Companies Act permits a party to produce electronic evidence without it being accompanied by the section 65B certificate. Hence, on the 2nd ground also the petition fails. Whether the Petitioner can be termed as Financial Creditor and whether the amount i.e., admittedly received by the Corporate Debtor can be termed as financial debt within the meaning of Section 5 (8) of IBC? - HELD THAT - It is an admitted fact that the petitioner moved similar petitions before the NCLT, Hyderabad Bench and it is admitted that the facts and issues involved in those cases are the same as in this case. NCLT Hyderabad Bench has dismissed the Petition on the ground that the Petitioner failed to prove that the amount lent to the Corporate Debtor is a financial debt and that the Petitioner is a Financial Creditor. Unless the Petitioner succeeds in proving that the amount given to the Corporate Debtor is against time value of money, it does not qualify for the financial debt. There is absolutely no evidence to prove that the amount was given for the time value of money. Hence for the same reasons for which the earlier Petitions were dismissed, this Petition is liable to be dismissed on the said ground. The Petition is dismissed.

Summary

Issues Involved:
1. Maintainability and pecuniary jurisdiction of the application.
2. Admissibility of WhatsApp conversation as evidence.
3. Whether the Petitioner can be termed as Financial Creditor and the amount as financial debt under Section 5(8) of IBC.

Issue-wise Detailed Analysis:

I. Maintainability and Pecuniary Jurisdiction:
The application was filed before the Tribunal on 10.11.2020. The notification enhancing the pecuniary jurisdiction to ?1 Crore was dated 24.03.2020. The Petitioner claimed the application was initially filed before the NCLT, Hyderabad Bench before the notification and later transferred. However, the Petitioner failed to provide evidence of the initial filing. The Tribunal concluded that the notification could not be applied retrospectively and, without proof of prior filing, the application was dismissed due to the disputed amount being less than the pecuniary jurisdiction of ?1 Crore.

II. Admissibility of WhatsApp Conversation as Evidence:
The Petitioner relied on a WhatsApp message from Mr. P.V. Narasimha Rao to prove acknowledgment of debt. The Corporate Debtor objected, citing the Supreme Court judgments in *Arjun Panditrao Khotkar vs. Kailash Kushanrao Gorantyal* and *Anvar P. V. vs. P.K. Basheer*, which mandate that secondary electronic evidence must be accompanied by a Section 65-B certificate. The Tribunal agreed, noting that Rao was not a shareholder or director at the time of the message and that Section 20 of the Companies Act pertains to service of notice, not admissibility of evidence. Hence, the WhatsApp messages were not admitted as evidence.

III. Financial Creditor and Financial Debt:
The Tribunal examined whether the Petitioner could be termed as a Financial Creditor and whether the amount given constituted a financial debt under Section 5(8) of IBC. The Petitioner had previously filed similar petitions which were dismissed by the NCLT, Hyderabad Bench on the grounds that the amount did not qualify as financial debt. The Tribunal reiterated that financial debt must be disbursed against the consideration for the time value of money. The Petitioner failed to prove this, and there was no evidence that the amount was given for the time value of money. Consequently, the Petition was dismissed on these grounds as well.

IV. Result:
The Petition was dismissed due to lack of evidence proving the application was filed before the pecuniary jurisdiction change, inadmissibility of WhatsApp messages as evidence, and failure to establish the debt as a financial debt under Section 5(8) of IBC.