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TMI Blog2020 (9) TMI 992X X X X Extracts X X X X X X X X Extracts X X X X ..... ing that the Corporate debtor would pay the interest on regular basis and the said amount would be refunded by the Corporate debtor along with an interest accrued thereon, if the same remained unpaid for any reasons, within a period of 3 years or on demand by the Applicant. During the Financial Years 2012-13 to 2018-19 the Corporate Debtor had deducted the TDS on various interest payments on the financial debt and the same is duly reflected in the form 26AS of the Applicant downloaded from the Income tax site. The Corporate Debtor had defaulted in payment of interest on time and the Applicant Being in need of funds requested the corporate Debtor to refund the loan amount in the month of August, 2018. The Corporate Debtor however refunded only part amount along with interest in instalments and also avoided the request of the Applicant to refund the loan amount in full. The total amount due and payable by the Corporate Debtor to the Petitioner/Financial Creditor on 30.11.2019 is INR 4,51,02,485/- including principal amount of Rs. 4,14,00,000/- along with unpaid accumulated interest amounting to Rs. 37,02,485/-. 3. The Financial Creditor served Legal Notice dated 22.10.2019 to the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al debt is owed and includes a person to whom such debt has been legally assigned or transferred to; " "Section 5(8) (8) "financial debt" means a debt alongwith interest, if any, which is disbursed against the consideration for the time value of money and includes-- (a) money borrowed against the payment of interest; (b) any amount raised by acceptance under any acceptance credit facility or its de- materialised equivalent; (c) any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument; (d) the amount of any liability in respect of any lease or 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 non-recourse basis; (f) any amount raised under any other transaction, including any forward sale or purchase agreement, having the commercial effect of a borrowing; (g) any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price and for calculating the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uction, the Trial Court may have erred as the settled position is that deduction of TDS does not constitute an admission of liability. The Trial Court may be wrong in holding that the TDS certificate by itself constitutes an admission of liability. This is not so, inasmuch as the TDS can be deducted even on the expectation of estimated liability. Independently of the TDS certificate, the liability of the Defendant is quite clear. The Supreme Court in Commissioner of Income Tax v. Gujarat Fluoro Chemicals (2012) 13 SCC 731 categorically held that "both advance tax as well as TDS are based on estimation of income by the assessee." The Bombay High Court as well, in S.P. Brothers v. Biren Ramesh Kadakla (2009) 1 Bom CR 453 has held that "the issuance of TDS certificates does not amount to an acknowledgement of defendant within the meaning of Section 25 of the Indian Evidence Act.......The TDS certificate is primarily to acknowledge the deduction of tax at source." The judgment dated 27th November, 2012 in Bigdot Advertising & Communications Pvt. Ltd. v. Union of India [CS(OS) No. 226/2000] was dealing with the question of the person who is liable once the TDS certificate is issued. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, or in any regulations not inconsistent therewith and duly made thereunder, including regulations made by the company in general meeting: Provided further that the Board shall not exercise any power or do any act or thing which is directed or required, whether under this Act or by the memorandum or articles of the company or otherwise, to be exercised or done by the company in general meeting. (2) No regulation made by the company in general meeting shall invalidate any prior act of the Board which would have been valid if that regulation had not been made. (3) The Board of Directors of a company shall exercise the following powers on behalf of the company by means of resolutions passed at meetings of the Board, namely:-- (a) to make calls on shareholders in respect of money unpaid on their shares; (b) to authorise buy-back of securities under section 68; (c) to issue securities, including debentures, whether in or outside India; (d) to borrow monies; (e) to invest the funds of the company; (f) to grant loans or give guarantee or provide security in respect of loans; (g) to approve financial statement and the Board's report; (h) to diversify the business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wo layers as per the laws of such country; (ii) a subsidiary company from having any investment subsidiary for the purposes of meeting the requirements under any law or under any rule or regulation framed under any law for the time being in force. (2) No company shall directly or indirectly -- (a) give any loan to any person or other body corporate; (b) give any guarantee or provide security in connection with a loan to any other body corporate or person; and (c) acquire by way of subscription, purchase or otherwise, the securities of any other body corporate, exceeding sixty per cent, of its paid-up share capital, free reserves and securities premium account or one hundred per cent, of its free reserves and securities premium account, whichever is more. (3) Where the giving of any loan or guarantee or providing any security or the acquisition under sub-section (2) exceeds the limits specified in that sub-section, prior approval by means of a special resolution passed at a general meeting shall be necessary. (4) The company shall disclose to the members in the financial statement the full particulars of the loans given, investment made or guarantee given or security p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the company on payment of such fees as may be prescribed. (11) Nothing contained in this section, except sub-section (1), shall apply-- (a) to a. loan made, guarantee given or security provided by a banking company or an insurance company or a housing finance company in the ordinary course of its business or a company engaged in the business of financing of companies or of providing infrastructural facilities; (b) to any acquisition-- (i) made by a non-banking financial company registered under Chapter IIIB of the Reserve Bank of India Act, 1934 and whose principal business is acquisition of securities: Provided that exemption to non-banking financial company shall be in respect of its investment and lending activities; (ii) made by a company whose principal business is the acquisition of securities; (iii) of shares allotted in pursuance of clause (a) of subsection (1) of section 62. (12) The Central Government may make rules for the purposes of this section. (13) If a company contravenes the provisions of this section, the company shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees and e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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