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TMI Blog2019 (2) TMI 965X X X X Extracts X X X X X X X X Extracts X X X X ..... lication under the Code has serious civil consequences. Heavy onus lies on the applicant to prove the claim of interest component, date of default and as to when the repayment is due. Simply, relying upon the copy of a seriously disputed document would not suffice in the present summary proceedings. For the reasons stated above this petition fails and the same stands dismissed as not maintainable. - COMPANY PETITION (IB)-792(PB)2018 - - - Dated:- 2-1-2019 - MR M.M. KUMAR, PRESIDENT AND MR S.K. MOHAPATRA, MEMBER (TECHNICAL) For The Applicant : Mr. Sakal Bhushan, Joseph Pookkatt and Navodaya Singh Rajpurohit, Advocate for The Respondent : Dr. U.K. Chaudhary, Sr. Adv. Ashish Aggarwal, Himanshu Vij And Gurucharan Singh, Advocates ORDER S.K. Mohapatra, Member M/s. Carnoustie Management India Private Limited, claiming as the financial creditor, has filed the instant application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (for brevity the Code ) read with rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (for brevity the Rules ) with a prayer to trigger Corporate Insolvency Resolution Process ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Limited (CBS) was incorporated on 29.03.2007 by the applicant Financial Creditor and the respondent company was a 100% subsidiary of the applicant Financial Creditor till 13.08.2015. It is submitted that the Corporate Debtor being a 100% owned subsidiary of the Financial Creditor availed a loan/inter corporate deposit from the Financial Creditor vide Loan Agreement dated 11.05.2007 for an amount up to ₹ 40,00,00,000/- (Rupees Forty Crores only) to be received as and when required, to make payments to NOIDA Authority and for meeting other expenses for execution of the Project of development of IT IT enabled services. It is submitted that as per the loan agreement executed between the parties, the Loan was to become repayable with interest at the rate of 12% per annum. In terms of the agreement the Loan was to have a moratorium period for levy of interest which was to end at the start of the financial year following the happening of either of the following eventualities viz: i. receipt of completion certificate for the CBS Project, or ii. induction of a partner, financier or investor with regard to the CBS Project; or iii. Upon CBS no longer remaining a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30(6)(b) of the Companies (Incorporation) Rules 2014 sent to the Financial Creditor admitted the liability of Corporate Debtor to the extent of ₹ 34,31,87,965/- (Rupees Thirty Four Crores Thirty One Lakh Eighty Seven Thousand Nine Hundred Sixty Five Only). The Corporate Debtor in its audited financial statements for financial year 2016-17 has yet again acknowledged and verified the amount due and payable to the financial Creditor. But in the balance sheet for Financial year 2016-17, the Corporate Debtor has recognized the same liability under the head of Trade Payables as Sundry Creditors instead Unsecured Loans - Other Loans and Advances as ICD . 12. Thereafter, the financial Creditor vide various communications requested the Corporate Debtor to repay the loan amount due and payable to the Financial Creditor but the Corporate Debtor failed to repay the same. It is submitted that the applicant was constrained to issue a demand notice dated 28.03.2018 claiming all the due and payable amount to the Financial Creditor but the Corporate Debtor vide its reply dated 13.04.2018 maliciously denied such admitted amount as due and payable to the Financial Creditor. The Financial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent ceased to be a subsidiary of the applicant, no interest has been provided in the books of account of the applicant. In this regard respondent has relied upon the Balance Sheets for the year ending 31.03.2016 and 31.03.2017. Accordingly, it is argued that the alleged debt amount was not disbursed against the payment of interest. 19. Respondent company has also claimed that the loan agreement dated 11.05.2007 relied upon by applicant is false and fabricated for the purpose of filing of the present application. 20. The claim of applicant that the original loan agreement is with the borrower, has been vehemently denied as illogical and unbelievable. It is argued that the original of any loan agreement is always kept by the lender. 21. In this regard, it is further alleged that the applicant in the legal notice dated 28.03.2018 had made no reference of any alleged loan agreement dated 11.05.2007. In the reply to the notice dated 13.04.2018 more particularly in Para IV, the respondent had mentioned that petitioner had failed to produce any loan agreement. Despite objection raised regarding loan agreement, in the rejoinder dated 02.03.2018 of the applicant there was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tten submission of the parties. 29. There is no dispute that the applicant company had disbursed interest free amount to the respondent company. A perusal of the Balance Sheets of the applicant company itself clearly shows that transaction was interest free. Besides the auditor s report clearly states that these transactions were interest-free . 30. Nevertheless, applicant has relied upon the loan agreement dated 11.05.2007, which provides inter alia that the interest shall become payable from the beginning of Financial year following the Moratorium Period or upon demand by CMIPL, whichever is later, the determination of which shall be at the sole option of the applicant (CMIPL). 31. In this regard the respondent company has alleged that the sole loan agreement dated 11.05.2007 relied upon by the applicant is false and fabricated. It is alleged that the loan agreement has been forged for the purpose of filing of the present application. It is claimed that apart from the alleged forged loan document, there is nothing on record to show that the respondent company ever agreed to pay any such interest component. Accordingly, it is argued that the applicant is not a financial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hire purchase contract which is deemed as a finance or capital lease under the Indian Accounting Standards or such other accounting standards as may be prescribed; (e) receivables sold or discounted other than any receivables sold on nonrecourse basis; (f) any amount raised under any other transaction, including any forward sale or purchase agreement, having the effect of a borrowing. (i) any amount raised from an allottee under a real estate project shall be deemed to be an amount having the commercial effect of a borrowing; and (ii) the expressions, allottee and real estate project shall have the meanings respectively assigned to them in clauses (d) and (zn) of section 2 of the Real Estate (Regulation and Development) Act, 2016 (16 of 2016); (g) any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price and for calculating the value of any derivative transaction, only the market value of such transaction shall be taken into account; (h) any counter indemnity obligation in respect of a guarantee, indemnity, bond, documentary letter of credit or any other instrument issued by a ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to be ignored. 43. It is also pertinent to note that in the loan agreement it is specifically mentioned that on the date of loan agreement respondent was a subsidiary of the applicant. However, respondent has placed on record the Annual Return of the company for the year ending 31.03.2008 to show that the company was incorporated on 29.03.2007 and that as on 11.05.2007 i.e. on the date of the loan agreement petitioner was not a shareholder of the respondent company and the respondent was not a subsidiary of the applicant. This fact also creates doubt on the genuineness of the loan agreement. 44. It is further seen that the stamp paper on which the loan agreement was prepared is dated 20.03.2007. However, the respondent company was incorporated on 29.03.2007 i.e. about 9 days after the purchase of the stamp paper. This also creates a doubt, as the stamp paper was purchased for a transaction with a company which was not even in existence on that date. 45. It is further relevant to note that an FIR bearing No. 1276 of 2018 has also been lodged against the applicant for having forged the said alleged loan agreement which is under investigation. 46. It is well settled that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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