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TMI Blog2019 (2) TMI 966X X X X Extracts X X X X X X X X Extracts X X X X ..... and addendums executed between them, a sum of ₹ 1,85,00,000/- (Rupees One Crore Eighty Five Lakh Only) belonging to the petitioners has been deposited with Trustworthy Gems & Jewellers Private Limited and Logical Jewellers Private Limited towards security of liabilities of K.K. Kohli & Brothers Private Limited (now known as SRS Automotive Components Pvt. Ltd.) for period upto 31.03.2008. It is also asserted by the Corporate Debtor that they have been fulfilling their part of obligation by payment of interest on the aforesaid amount through Trustworthy Gems & Jewellers Private Limited and Logical Jewellers Private Limited. However, the petitioners have remained unable to clear its own liabilities within maximum period of 5 years and alleged to have avoided the clearance of the aforesaid liabilities deliberately knowing fully well that interest and penalty is accruing day-by-day. The amount is to become due and payable on the performance of obligation undertaken by the Financial Creditor but not before that. In the petition a copy of the reply dated 06.12.2017 filed by the Corporate Debtor has been attached but no detailed explanation has been given has to how the Financia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ptcy (Application to Adjudicating Authority) Rules, 2016 has also been placed on record. There is a declaration made by him that no disciplinary proceedings are pending against him in Insolvency and Bankruptcy Board of India or Indian Institute of Insolvency Professionals of ICSI. In addition, further necessary disclosures have been made by Mr. Ashish Singh, as per the requirement of the IBBI Regulations. Accordingly, he satisfies the requirement of Section 7 (3) (b) of the Code. 4. It is the case of the petitioners that they are erstwhile shareholders of a company namely KK Kohli Brothers Private Limited (for brevity KKK ). A MOU dated 18.09.2006 (Annexure-C) was entered between KKK and one Tarang Infrastructure Limited (for brevity TIC ) for development of an IT Park in premises owned by KKK at 14/5th Milestone, Mathura Road, Faridabad. According to the terms of the MOU, TIC was to have 62% shareholding in KKK. 5. Subsequently, an agreement dated 16.11.2007 was executed between KKK, all its shareholders, TIC and SRS Real Infrastructure Limited (for brevity SRS ) whereby SRS was to take over KKK completely including the land belonging to KKK admeasuring 13 kanal (7865 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) . e) . f) . (g) It is clarified that all liabilities of KKK till the date of 100% take over of KKK by SRS or till 31.03.2018 (which ever is later) including on account of Labour Laws, Sales Tax, Provident Fund, Employees State Insurance, Electricity Department, penalties fines, Court Orders/Decrees, business transactions of KKK, any other dues of Government or Municipal Corporation or of any other person, shall be borne exclusively by the existing shareholders of KKK, who amongst themselves shall be jointly, severally and unlimitedly liable for the same. h) SRS shall withheld from the consideration payable to existing shareholders the amount equal to maximum limit of amount, which may be claimed by any person or authority or department against KKK, even in the cases where such claims are disputed by KKK or its shareholders and such disputes have not been finally adjudicated by the competent authorities or a sum of ₹ 1,00,00,000/- (Rupees One Crore only), whichever is more. After settling of all liabilities of KKK or complete development marketing of proposed I.T. Unit/Park on said land, SRS shall pay such amounts to the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Third Party (Mr. Krishan Kumar Kohli and the erstwhile shareholders of KKK), on the aforesaid deposits with effect from 01.04.2008 till the date of refund. 5. Third Party (Mr. Krishan Kumar Kohli and the erstwhile shareholders of KKK), shall at its own risks, costs and consequences, expeditiously contest, clear pay all the liabilities along with penalties and interests applicable thereon. For this purpose the Second Party has vide resolution dated 26.04.2008 authorized Sh. K.K. Kohli to initiate/contest all proceedings for contesting the said liabilities on behalf of Second Party and take all such steps, as may be necessary. 6. Soon after the particular liability of Second Party (SRS I-Tech) is cleared/paid/got discharged by the Third Party (Mr. Krishan Kumar Kohli and the erstwhile shareholders of KKK), an amount proportionate thereto shall be refunded by the Fourth Party (SRS Aviations) to the Third Party (Mr. Krishan Kumar Kohli and the erstwhile shareholders of KKK). First, Second and Fourth Parties shall be jointly and severally liable to refund the aforesaid deposits in proportion to the liabilities cleared/paid by the Third Party Appropriate adjustments shall al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Realtech Limited w.e.f. 10.12.2012 and the deposits were transferred to in it. Again, name of Akriti Realtech Limited was altered to Akriti Global Traders Ltd. On 19.07.2013 SRS I-Tech Pvt. Ltd. undergone a further change whereby its name was altered to SRS Automotive Components Pvt. Ltd. (SRSACPL). 9. All the aforesaid companies were controlled by the aforesaid three guarantors namely Mr. Nanak Chand Tayal, Mr. Anil Jindal and Mr. Rajesh Singla. 10. On 22.02.2012, SRS I-Tech Pvt. Ltd. paid an amount of ₹ 60,00,000/- towards the income tax liability, which had to be discharged by erstwhile shareholder of KKK and due to this count the deposit amount was reduced to ₹ 1,85,00,000/- 11. On 11.12.2013, SRSRIL, SRSACPL, the aforesaid guarantors and Akriti Global Traders Ltd. transferred the deposit amount to Vision Jewellers Pvt. Ltd. Vision Jewellers Pvt. Ltd. was also controlled by the aforesaid guarantors and was a group company of SRSRIL, SRSACPL. The said deposit remained with the said company till 31.03.2015. 12. Thereafter SRSRIL, SRSACPL, the aforesaid guarantors and Akriti Global Traders Ltd. transferred an amount of ₹ 100 lacs to Mr. K.K. Kohli, Ms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gems Jewellers Private Limited and Logical Jewellers Private Limited towards security of liabilities of K.K. Kohli Brothers Private Limited (now known as SRS Automotive Components Pvt. Ltd.) for period upto 31.03.2008. We have been causing payment of interest on your aforesaid amount through Trustworthy Gems 86 Jewellers Private Limited and Logical Jewellers Private Limited. Please be noted that you had agreed to clear your liabilities within a period of 2-3 years and maximum in 5 years of the agreement. However, you have been indulging in willful defaults only with the mala fide intention to cheat and defraud the company. In fact, despite our repeated requests and lapse of about 9 years, it appears that you are deliberately avoiding clearing the aforesaid liabilities despite being fully aware that interest and penalty is accruing day by day and further the statutory authorities are exerting pressure upon us to clear the liabilities. In fact, interests and penalties are accruing on said liabilities and the same are increasing day by day. In these circumstances, please note that Trustworthy Gems Jewellers Private Limited and Logical Jewellers Private Limited ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 231968 Int. for Nov upto 30.11.2017 236221 Int. for Dec upto 31.12.2017 240551 Int. for Jan upto 31.01.2018 244961 Grand Total 5106524 17. The Petitioners made various attempts to serve at the e-mail address of the Respondent reflected in its master data available at the website by MCA as well as through post. It was found that it was not possible to procure the presence of the Respondent by ordinary process. Then on the oral request of the Petitioner an order for substituted service was passed on 06.06.2018 allowing it to adopt the procedure as laid down under Order V Rule 20 CPC. Thereafter in compliance of aforesaid order, publication in two newspapers was carried but all in vain and afterwards vide order dated 13.08.2018 of this Tribunal respondent was proceeded ex partee. 18. On 12.09.2018, during the course of hearing the question arose in our mind as to whether the petitioner would fall within the definition of financial creditor as given in Section 5(8) of the Code or it could be reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... auses (a) to (h) of this clause; A perusal of the definition given in Section 5(8) of the Code would show that a financial debt would mean a debt along with interest which is disbursed against the consideration for the time value of money. In other words, a financial debt would include the principal as well as interest. However, it must satisfy the requirements that such a financial debt was disbursed against the consideration for the time value of money. In ordinary course it is seen that an elementary feature of financial transactions is its consideration being time value of money. Financial transactions usually pertain to a sum of money received today, to be paid for over a period of time in a single or series of payments in future. It may also be a sum of money invested today, to be repaid over a period of time in a single or series of payments in future. In either case, as the inflows and outflows are distanced by time, there is a compensation for time value of money. The amount of compensation is usually worked out on the risk factor inherent in the series of payments. There can be complex financial instruments where deciphering the true intent of the transaction, debt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 22. The aforesaid question came up for consideration of Hon ble the Supreme Court in the case of Innoventive Industries Ltd. v. ICICI Bank Ltd. (2018) 1 SCC 407 , in para 28 reference has been made to the Section 7 (5) of the Code to lay down the law as under:- It is at the stage of Section 7(5), where the adjudicating authority is to be satisfied that a default has occurred, that the corporate debtor is entitled to point out that a default has not occurred in the sense that the debt , which may also include a disputed claim, is not due. A debt may not be due if it is not payable in law or in fact. The moment the adjudicating authority is satisfied that a default has occurred, the application must be admitted unless it is incomplete, in which case it may give notice to the applicant to rectify the defect within 7 days of receipt of a notice from the adjudicating authority. Under subsection (7), the adjudicating authority shall then communicate the order passed to the financial creditor and corporate debtor within 7 days of admission or rejection of such application, as the case may be. A perusal of the aforesaid observation would show that the Adjudicating Authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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