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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 ..... is application, everywhere referred the word 'loan amount' and not the debt and against that loan amount, he was getting the interest from the Corporate Debtor, therefore, we are unable to accept the contention of the Petitioner that he is the Financial Creditor under Section 5(7) and the amount which he has advanced as a loan comes under the definition of Section 5(8) - Further, the issuance of TDS certificates does not amount to an admission of liability and the TDS certificate is primarily to acknowledge the deduction of tax at source. There are no documents of loan agreement, which would show, what was the agreed rate of interest and as we have already referred the definition of financial debt and on the basis of the same we are of the considered view that the claim of the petitioner do not come under any of the clause (a) to (i) of Section 5(8) of IBC. The Petitioner has neither enclosed the resolution passed by the Board of Director of the Corporate Debtor Company nor enclosed the resolution passed by the Board of Director of his company by which the company was authorized to disburse the loan. We have already held that there is no written agreement - the Petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Debtor and the same was delivered to the Corporate Debtor on 25.10.2019. The Corporate Debtor having the liability defaulted in repayment of the due and payable financial debt on demand i.e. upon lapse of period given in demand notice dated 22.10.2019 for repayment of the tendered amount along with accrued interest. Further, the Financial Creditor has annexed the true copy of the statement of account for the period from 01.04.2013 to 30.11.2019, copy of bank statement of Financial Creditor showing details of loan payments on various dates, and copy of confirmation of account for the period 01.04.2012 to 31.03.2013 issued by the Corporate Debtor confirming receipt of loan as well as TDS certificates. 4. We have heard the Ld. Counsel appearing for the applicant and perused the averments made in the application filed on behalf of the applicant. We find that the Petitioner has annexed the bank statement of the Petitioner showing the details of loan payments on various dates and lastly 06.12.2019, Copy of confirmation of account for the period from 01.04.2012 to 31.03.2013 issued by Corporate Debtor confirming receipt of loan of ₹ 6,48,79,350/- and Copy of statement of account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 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 bank or financial institution; (i) the amount of any liability in respect of any of the guarantee or indemnity for any of the items referred to in sub-clauses (a) to (h) of this clause; Section 3(6) claim means-- (a) a tight to payment, whether or not such right is reduced to judgment, fixed, disputed, undisputed, legal, equitable, secured or unsecured; (b) right to remedy for breach of contract under any law for the time being in force, if such breach gives rise to a right to payment, whether or not such right is reduced to judgment, fixed, matured, unmatured, disputed, undisputed, secured or unsecured; Section 3(11) (11) debt means a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt; 7. From the plain reading of the definitions which we have referred above, we find that debt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the person who is liable once the TDS certificate is issued. It is not a precedent on the proposition that if a TDS certificate is issued, it amounts to admission of liability. In light of this, though the deduction of TDS by itself cannot be sufficient to impose liability, but on a totality of facts it is clear that the defendant is liable. 9. In the light of that provisions and decisions referred above as well as the submissions made on behalf of the Petitioner, when we shall consider the case in hand then we are of the view that in the case in hand, there is no dispute that certain amount has been advanced by the Petitioner to the Corporate Debtor through RTGS payments on different dates but the question is that can the amount be treated as a financial debt or not? We find that the Petitioner in his application, everywhere referred the word 'loan amount' and not the debt and against that loan amount, he was getting the interest from the Corporate Debtor, therefore, we are unable to accept the contention of the Petitioner that he is the Financial Creditor under Section 5(7) and the amount which he has advanced as a loan comes under the definition of Section 5(8). Fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of loans; (g) to approve financial statement and the Board's report; (h) to diversify the business of the company; (i) to approve amalgamation, merger or reconstruction; (j) to take over a company or acquire a controlling or substantial stake in another company; (k) any other matter which may be prescribed: Provided that the Board may, by a resolution passed at a meeting, delegate to any committee of directors, the managing director, the manager or any other principal officer of the company or in the case of a branch office of the company, the principal officer of the branch office, the powers specified in clauses (d) to (f) on such conditions as it may specify: Provided further that the acceptance by a banking company in the ordinary course of its business of deposits of money from the public repayable on demand or otherwise and withdrawable by cheque, draft, order or otherwise, or the placing of monies on deposit by a banking company with another banking company on such conditions as the Board may prescribe, shall not be deemed to be a borrowing of monies or, as the case may be, a making of loans by a banking company within the meaning of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (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 provided and the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient of the loan or guarantee or security. (5) No investment shall be made or loan or guarantee or security given by the company unless the resolution sanctioning it is passed at a meeting of the Board with the consent of all the directors present at the meeting and the prior approval of the public financial institution concerned where any term loan is subsisting, is obtained: Provided that prior approval of a public financial institution shall not be required where the aggregate of the loans and investments so far made, the amount for which guarantee or security so far provided to or in all other bodies corporate, along with the investments, loans, guarantee or security proposed to be made or given does not exceed the limit as specified in sub-section (2), and there is no default in repayment of loan instalments or payment of interest thereon as per the terms and conditions of such loan to the public ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection. (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 every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to two years and with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees. Explanation--For the purposes of this section,-- (a) the expression investment company means a company whose principal business is the acquisition of shares, debentures or other securities; (b) the expression infrastructure facilities means the facilities specified in Schedule VI. 12. In the light of the aforesaid provisions, when we shall consider the case of Petitioner then we find that the applicant has not enclosed the resolution passed by the Corporate Debtor company as required under Section 179 as well as under Section 186. In other words, the Petitioner has neither enclosed the resolution passed by the Board of Director of the Corporate Debtor Company nor enclosed the resolution passed by the Board of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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