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TMI Blog2018 (12) TMI 417X X X X Extracts X X X X X X X X Extracts X X X X ..... reditor) and 'M/s. Narbada Valley Chemical Industries Private Limited' (hereinafter as 4th Financial Creditor) (Collectively as Financial Creditors) have jointly furnished Form No. 1 under Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (hereinafter as Rules) in the capacity of "Financial Creditor" on 26.07.2017 by invoking the provisions of Section 7 of the Insolvency and Bankruptcy Code (hereinafter as Code). The Debtor has filed a Miscellaneous Application no. 367/2017 praying for the dismissal of the Petition. The MA has been treated as 'Reply' from the side of Debtor. 2. Further under the head "Particulars of Corporate Debtor" the description of the debtor is stated as 'M/s. M L Mansukhani & Co. Private Limited' (hereinafter as Debtor) having Registered office at, 69, Princess Street, Mumbai, Maharashtra - 400002. 3. In the requisite Form, under the head "Particulars of Financial Debt" the total amount of Debt in default is stated as Rs. 1,18,24,017/- which includes the Principal amount of Rs. 61,70,000/- plus Interest @ 18 % p.a. amounting to Rs. 56,54,017/- as on 01.04.2017. The date of default is stated as 01.04.2017. The bifurc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Financial Creditors that the Debtor is falsely questioning the Debt amount, rather the Debtor is in financial crunches and therefore the Debtor is unable to make any payment to the Financial Creditors. Hence, the Financial Creditors, jointly, have filed this Petition, invoking the provisions of S. 7 of the Code, for the commencement of the CIRP over the Debtor. 5. Submissions by the Financial Creditor : 5.1. The Learned Representative for the Financial Creditors has submitted that the 1st Financial Creditor has disbursed the amount as mentioned below : Sr. No. Amount Disbursed Date Cheque No./Ref. No. 1. Rs. 10,00,000/- 31.12.2011 000025 2. Rs. 5,00,000/- 31.01.2012 000033 3. Rs. 10,00,000/- 03.04.2012 000044 4. Rs. 5,00,000/- 05.07.2012 000003119026 5. Rs. 2,00,000/- 24.03.2014 000013423308 6. Rs. 5,00,000/- 19.05.2014 000014626366 7. Rs. 5,00,000/- 19.05.2014 000014627607 8. Rs. 5,00,000/- 19.05.2014 000014633378 9. Rs. 5,00,000/- 19.05.2014 000093 Total Rs. 52,00,000/- The Ledger Account of the Debtor in books of the Financial Creditors evidences the above mentioned transaction. The copies of Ledger Accounts a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ors. Copies of the TDS Certificates are annexed with the Petition. Hence, pleaded that deduction of TDS is an acknowledgement of Loan on Interest. 5.9. The Learned Representative for the Financial Creditors has drawn the attention of this Bench towards the Annual Report of the Debtor for the F.Y. 2016-17 wherein the Debtor has acknowledged the Principal amount claimed by the Financial Creditors under the head of 'Long Term Borrowings'. The copy of the Annual Report for the F.Y. 2016-17 of the Debtor is also placed on record. 5.10. In light of above submissions the Learned Representative for the Financial Creditors has vehemently argued that, since, the Debtor has paid the interest to the 1st to 3rd Financial Creditors, which is evident from the TDS Certificates, the claimed amount clearly falls under the definition of Financial Debt. The Debtor, both, in reply to Legal notice and in reply to this Petition has sought a defence of Dispute, which is irrelevant for adjudication of the Petition filed U/s. 7 of the Code. 5.11. It is further submitted that the Debtor has placed reliance over dispute involved in the Civil Suit filed before Hon'ble Bombay High Court bearing no. 227/2017. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aprobate and reprobate on the same time. It is stated that the Financial Creditors on one hand claiming for the Shares as well as on other hand claiming the outstanding amount. Hence, in light of these submissions, as there is serious dispute involved regards to the claimed amount, this Petition does not survives and therefore deserves to be dismissed. 7. Findings : 7.1. The Bench has gone through the submissions made by both the sides and also has also gone through the pleadings on record. It is noticed that the Learned Advocate for the Debtor has vehemently challenged the Jurisdiction of this Bench in light of the pending Civil Suit before the Hon'ble Bombay High Court. This objection has no force due to the basic reason that the issues raised in that litigation do not relate to the debt in question; which was otherwise an admitted Financial Liability. 7.2. It is also noticed that, admittedly, the amounts claimed by the Financial Creditors are disbursed by them in the above mentioned manner. 7.3. To adjudicate this Petition it is necessary to frame certain questions as follows : a) Whether the amount claimed by the Financial Creditors is an Investment or it is an amount ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmitted by the Directors of Financial Creditors, is not yet established. The question of fraud is still sub-judice before the Hon'ble Bombay High Court. 7.9. In light of this observation a conclusion can be drawn that, since, neither the fraud is yet established nor there is evidence for the transfer of shares in names of the Directors of the Financial Creditors, the amount claimed in this Petition still survives and therefore not discharged. Hence, to answer the above framed second question it can be stated that 'the amount claimed is not discharged yet'. 7.10. The Bench has also gone through the Ledger Account of the Debtor in the Books of the Financial Creditors and noticed that the Financial Creditors have advanced the amount as stated in their submissions. Rather there is no dispute with regard to amount advanced / disbursed. 7.11. It is also noticed that Annual Report for the F. Y. 2016-17, which is latest before filing of the Petition, of the Debtor reflects the amount claimed in this Petition as 'Long Term Borrowings' though the Note in Financial Statement to this entry reflects the amount is in litigation with respect to Civil Suit pending before the Hon'ble Bombay High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en by the Hon'ble Supreme Court in the case of 'Innovative Industries v. ICICI Bank' dated 31.08.2017. The relevant portion is worth to be reproduced as follows : "...... 30. On the other hand, as we have seen, in the case of a corporate debtor who commits a default of a financial debt, the adjudicating authority has merely to see the records of the information utility or other evidence produced by the financial creditor to satisfy itself that a default has occurred. It is of no matter that the debt is disputed so long as the debt is "due" i.e. payable unless interdicted by some law or has not yet become due in the sense that it is payable at some future date. It is only when this is proved to the satisfaction of the adjudicating authority that the adjudicating authority may reject an application and not otherwise." (Emphasis supplied). 7.17. By going through the above cited decision it is crystal clear that though there is pending dispute, prior to institution of the Petition U/s. 7 of the Code, the Adjudicating Authority need not to look into that dispute for the adjudication of the S. 7 Petition. In this case, the Bench has also perused the Orders of the Hon'ble Bombay Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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