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TMI Blog2019 (2) TMI 1040X X X X Extracts X X X X X X X X Extracts X X X X ..... hed that no debt payable to the Applicants is in existence as on the date of filing this Company Petition, but also established that this debt is time barred, therefore this Company Petition is hereby dismissed as misconceived. - CP/770/2018 - - - Dated:- 19-12-2018 - Mr. B.S.V. PRAKASH KUMAR, MEMBER (JUDICIAL) AND Mr. S. VIJAYARAGHAVAN, MEMBER (TECHNICAL) For The Financial Creditor : Mr T.V. Vineeth Kumar, Advocate For The Corporate Debtor : Mr P.H. Arvindh Pandian, Sr. Adv. and Sandeep Kumar, Advocate ORDER Per : B.S.V. Prakash Kumar, Member (Judicial) It is a Company Application, the Applicants/the Financial Creditors filed u/s 7 of the Insolvency Bankruptcy Code, 2016 ( the Code ) against the Corporate Debtor, namely M/s. Radha Exports (India) Private Limited, stating that the Corporate Debtor having defaulted in repaying ₹ 2,10,00,000 along with interest of ₹ 2,31,60,000 towards interest from the year 2007 aggregating to ₹ 4,41,60,000, this Applicant has sought initiation of Corporate Insolvency Resolution Process ( CIRP ) against this Corporate Debtor. 2. These Applicants are wife and husband, First Applicant is husb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Copy of Statutory Notice sent to Corporate Debtor and its Director and Reply notice for the same. 4. Representation by the Corporate Debtor to the Commissioner of Income Tax (Appeals). 5. Copy of Petition in C.P. No. 335 of 2013 filed before the Honourable High Court of Judicature at Chennai and transferred to National Company Law Tribunal, Chennai. 6. Worksheet. 4. The Corporate Debtor counsel submits that these applicants have no locus to file the present application as there is no existence of any debt payable by the Corporate Debtor. 5. The Corporate Debtor counsel submits that, to initiate CIRP u/s 7 of the Code, it is a condition precedent that debt shall be a financial debt as defined u/s 5(8) of the Code by showing that there is a debt payable along with interest, which has been disbursed against the consideration for the time value of money including (a) to (i) situations given in the subsection. These Applicants having not filed any material papers to constitute elements of financial debt, the Corporate Debtor counsel says, this A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss Bank 696689 K. JAYARAM 550,000 14.07.2004 Canara Bank 795937 K. JAYARAM 200,000 1,08,14,650 7. To fortify that partnership firm M/s. Radha Exports made the above payments to the Applicants, the corporate debtor has filed statements of account copies as Annexure-Al. On verification of the items given in the above table with the payments reflected in the bank statements filed by the Corporate Debtor, we have noticed that they are true and correct. The Applicants have not placed any material against Bank statements filed by the corporate debtor to say that the material papers given by the corporate debtor are not true and correct. 8. For the assets and liabilities of the sole proprietorship concern were taken over by the Corporate Debtor on its incorporation on 19.07.2004, since the first Applicant requested the Corporate Debtor to convert ₹ 90,00,000 of the balance payable to the Applicants into share application money, ₹ 90,00,000 ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alingapuram Branch, I have advanced this money to Radha Exports out of my Savings in NR A/c at HSBC (A/c Nos: 041 063934006, 041 063934007, 041 529371006), IOB (SB A/c No: 17182). Further, I also confirm that we were residing at No. 34, Gill Nagar 2nd Street, Choolaimedu, Chennai-94 in India and proof of our residence (EB Copy, Ration Card, Credit Card Statement and NR Bank A/c Copies) is also enclosed for your verification. Yours sincerely, Sd/- Mr. K. Jayaram Sd/- Mrs. Shoba Jayaram For RADHA EXPORTS (INDIA) PVT. LTD. Sd/- M. KRISHNAN Managing Director 10. In addition to the above letter, the Corporate Debtor has also placed another letter dated 11.01.2011 Second Applicant addressed to the Deputy Commissioner of Income Tax confirming that she requested the Corporate Debtor to allot shares in the name of First Applicant against her share application money ₹ 90,00,000 on the agreement that her husband would pay that money to her later. The corporate debtor has annexed this letter as Annexure-A4 to the reply affidavit filed by the Corporate Debtor. 11. By going through these two letters, it is evident that as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ING Vysya Bank 361566 K. JAYARAM 100,000 01.01.2005 ING Vysya Bank 458378 K. JAYARAM 500,000 12.02.2005 Standard Charted Bank 643098 K. JAYARAM 200,000 10.03.2005 Standard Chartered Bank 893816 K. JAYARAM 100,000 13.04.2005 ING Vysya Bank 480867 K. JAYARAM 150,000 13.01.2006 Standard Chartered Bank 891386 K. JAYARAM 125,000 09.02.2006 Standard Chartered Bank 988089 K. JAYARAM 125,000 22.02.2006 Standard Chartered Bank 988121 K. JAYARAM 200,000 18.03.2006 Standard Chartered Bank 557809 K. JAYARAM ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 7 of the Code showing it has financial debt. 16. The Corporate Debtor besides saying that there is no financial debt as stated under the Code and also no debt is left payable to the Applicants as on the date this Application had been filed, the corporate debtor counsel, without prejudice to the argument above, has also stated that assuming the corporate debtor liable to pay to the applicants, then also this debt being hopelessly barred by limitation because these monies were given by the applicants during the period in between November 2002 to September 2003. The applicants having not stated that part payments were made by the corporate debtor, since the applicants having not initiated within three years from the date of disbursement, this case has to be dismissed. But fact of the matter is, the corporate debtor counsel says, the money taken was repaid in full by 2007 and 2008 itself, this claim made in June 2018 is hit by limitation, and therefore the Company Petition is liable to be dismissed on this ground as well. 17. Now going through the observations we have noted, now the points for consideration are, as to whether any financial debt is in existence in between the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... existence of financial debt could be proved on the basis of- (a) the records available with an information utility, if any; or (b) other relevant documents, including - (i) a financial contract supported by financial statements as evidence of the debt; (ii) a record evidencing that the amounts committed by the financial creditor to the corporate debtor under a facility has been drawn by the corporate debtor; (iii) financial statements showing that the debt has not been repaid; or (iv) an order of a court or tribunal that has adjudicated upon the non-payment of a debt, if any. 22. By reading sub-regulations of CIRP Regulations along with section 7(3) r/w section 240 of the Code, it could be ascertainable that a financial debt can be construed as proved in three scenarios, one is, if the records are available with information utility, as to information utilities have not yet come into existence this situation is not available, as to scenario two, a financial contract supported by financial statements as evidence of debt, the Corporate Debtor drawing out of monies of facilities and the financial statements showing that the debt has not to be paid sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e historical facts available on record, even if the Corporate Debtor statement is taken as true, the limitation would start running from the year 2007. Since the winding up petition was filed in the year 2013, even from the year 2007, these Applicants could have filed winding proceedings within three years from thereof, not in the year 2013. Conceding everything as stated by the applicants, then also the debt claim would remain barred by limitation. 28. If the case is based on the financial contract, it is imperative upon the Applicants to prove that no payment was made by filing their financial statements or at least statement of their bank account. The Applicants have not filed any financial statement reflecting that debt has not been paid, on the contrary, the Corporate Debtor has filed statement of accounts reflecting more than One Crore was paid to the Applicants even before the corporate debtor was incorporated. Thereafter, the letters of the Applicants have been filed reflecting that these Applicants themselves addressed letters to the Deputy Commissioner of Income Tax confirming their making a request to the Corporate Debtor to treat ₹ 90,00,000 out of the balance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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