9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (11) TMI 527 - AT - Insolvency and BankruptcyInitiation of CIRP - NCLT rejected the Section 7 Application - no concluded contract between the parties - no consideration for time value of money - no financial debt - HELD THAT - There is nothing on the record to indicate that the company at any time has issued a private placement offer. Appellant has not brought any material on record to indicate that company at any time has issued private placement offer and in pursuance of which Appellant has made any application of allotment of shares. There being no material brought on the record to indicate that the amount of Rs.2.6 Crore was advanced by the Appellant in pursuance of any offer of private placement invited by the company. Amount of Rs.2.6 Crores which was advanced by the Appellant cannot be treated to be amount in response to the private placement. When the amount advanced cannot be related to Section 42, the applicability of Section 42(6) cannot be pressed as is being sought by the Appellant in the present case. Similarly, Rule 2(vii) of the Companies (Acceptance of Deposit) Rules 2014 and its explanation are not attracted. Rule 2(vii) contemplates any amount received and held pursuant to an offer made in accordance with the provisions of the Companies Act, 2013. Validity of findings of NCLT in PARA 27 of the order - HELD THAT - Counsel for the Appellant is right in his submission that what was observed in the aforesaid e-mail and the attachment was that the amount can come out of the sale of summit units and then to be paid to the Appellant. The said e-mail cannot be read to mean that the amount has been paid and debt has been liquidated, even the Adjudicating Authority notices that the Financial Creditor has agreed that the said sum of Rs.2.6 Crores could have been adjusted by sale of summit units. The Corporate Debtor, thus, is not supporting the observations of the Adjudicating Authority that an amount of Rs.2.6 Crores has to be paid from sale of summit units and now the new theory is being propounded that the said amount is paid and adjusted - the finding of the Adjudicating Authority in paragraph 27 that no financial debt is due is unsustainable. Further, the finding of the Adjudicating Authority is it can easily be presumed that as on this day there is no financial debt within the meaning of Section 5(8) of the IBC, 2016 , which finding is based only surmises and conjecture. There being no material on the record to indicate that an amount of Rs.2.6 Crore was paid to the Appellant, the impugned order passed by the Adjudicating Authority deserves to be deleted. The order of the Adjudicating Authority rejecting Section 7 Application is upheld - Appeal disposed off.
Issues Involved:
1. Whether the amount of Rs.2.6 Crores transferred by the Appellant to the Corporate Debtor constitutes a financial debt. 2. Applicability of Section 42 of the Companies Act, 2013 and Companies (Acceptance of Deposit) Rules, 2014. 3. Validity of the Adjudicating Authority's observation that no financial debt is due. Summary: Issue 1: Financial Debt The Appellant transferred Rs.2.6 Crores to the Corporate Debtor between 04.03.2017 and 18.05.2017. The Adjudicating Authority rejected the Section 7 application, stating there was no concluded contract and no consideration for the time value of money, hence no financial debt. The Appellant contended that Rs.2 Crores was for share allotment and Rs.60 Lakhs as an unsecured loan, which was to be repaid with statutory interest under Section 42(6) of the Companies Act, 2013. The Respondent refuted, claiming the amount was not advanced against any share application money and that statutory compliances for private placement were not met. Issue 2: Applicability of Section 42 and Deposit Rules The Appellant argued that the share application money not refunded should be treated as a financial debt under Section 42 and Companies (Acceptance of Deposit) Rules, 2014. The Tribunal noted that several statutory requirements under Section 42 were not met, such as issuing a private placement offer, Board Resolution, and Special Resolution. There was no material on record to indicate that the amount was advanced in response to any offer for private placement, making Section 42(6) and Rule 2(vii) inapplicable. Issue 3: Validity of Adjudicating Authority's Observation The Adjudicating Authority's observation in paragraph 27 that no financial debt is due was challenged. The Tribunal found that the email dated 09.04.2018, which suggested the amount could be adjusted by the sale of summit units, did not imply the debt was liquidated. The Corporate Debtor's reply in the Appeal introduced a new theory of financial adjustments, which contradicted the Adjudicating Authority's findings. The Tribunal concluded that the Adjudicating Authority's finding that no financial debt is due was unsustainable and based on conjecture. Conclusion: The Tribunal upheld the Adjudicating Authority's order rejecting the Section 7 Application but deleted paragraph 27 of the Adjudicating Authority's order, stating it was unsustainable. The Tribunal did not express any opinion on whether the amount of Rs.2.6 Crores was repaid, leaving it to be decided in appropriate proceedings.
|
