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TMI Blog2021 (1) TMI 935X X X X Extracts X X X X X X X X Extracts X X X X ..... n the application under the head "Particulars of Financial Debt", the total amount of debt granted by them is Rs. 31,15,000/-. The amount of Rs. 1,92,000/- was disbursed on 21-8-2015 via Bank Transfer. Another amount of Rs. 10,00,000/- was also disbursed on 1-12-2015 via bank transfer. The amount of Rs. 19,15,000/- was disbursed on 21-3-2016 via cash payment, along with an amount of returns as per clause 5.3 of the agreement dated 17-8-2015. Therefore, the amount claimed to be in default is Rs. 39,56,050/-. The Date of Default is stated to be 31-6-2016. Brief History of the Case of Financial Creditors: 3. The Corporate Debtor approached the Financial Creditors to invest in developing a project known as "Moonriver Resorts and Spa" (hereinafter referred to as "Resort") in Pallivasal Village and offered attractive returns on the sums that would be invested by the Financial Creditors. Pursuant thereto the Financial Creditors entered into an Agreement dated 17-8-2015 with the Corporate Debtor wherein the Financial Creditors agreed to purchase the ownership of 1/6 undivided share in the Resort. Based on the representation of the Corporate Debtor the Financial Creditors paid an amount o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Debtor through the present Application is to prejudice the business of the Corporate Debtor, and nothing but an effort to defame and make the Corporate Debtor and its promoters/directors suffer the trauma of a legal process. 7. The counsel appearing for the Corporate Debtor submitted that the Application is barred by limitation. In Part IV, item number 2(2) of the Application, it is stated that the debt has become due from 31-6-2016. Accordingly, on 30-6-2019, the three years period has been elapsed, and, therefore, the present Application is barred by limitation in terms of Section 238A of I&B Code read with Section 3 of the Limitation Act, 1963. Therefore, the Corporate Debtor prayed that this Application has to be dismissed on that ground alone without considering any other aspects of the case. Further, it is stated that the Honourable Supreme Court of India in several cases set aside the proceedings initiated after three years due to limitations being accrued barring such proceedings under I&B Code. To fortify this argument, the learned counsel relied on the following judgments : i. Gaurav Hargovindbhai Dave v. Asset Reconstruction Co. (India) Ltd. [2019] 156 SCL 397 (SC) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of their contentions, refuting the reply of Corporate Debtor. Findings: 10. On hearing the arguments of both sides and on perusal of the documents and evidences placed on record, this Bench finds it necessary to deal with each issue separately. The contention can be divided into two: (i) The primary question which arose in this case is regarding the maintainability of this application and whether the debt is time barred and hit by limitation? (ii) Whether the applicants are Financial Creditors and the debt due is a Financial Debt? 11. Regarding the maintainability of this application and whether it is time barred, the issue is now well settled in view of the decision of Hon'ble Supreme Court in B.K. Educational Services (P.) Ltd. (supra) that Section 238A of the IBC is applicable from the commencement of the Code i.e. 1-12-2016 irrespective of the fact that this Section has been added in the second amendment to the code on 6-6-2018, wherein, it is held as follows: "It is thus clear that since the Limitation Act is applicable to applications filed under sections 7 and 9 of the Code from the inception of the Code, Article 137 of the Limitation Act gets attracted. "The r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the letter was written without prejudice to the legal rights and remedies available under any law and therefore the acknowledgement or the undertaking has no legal effect must likewise be rejected. This letter is reminiscent of a letter that fell for consideration in Spencer's case as pointed out by Mr. Harish Salve, "as a rule the debtor who writes such letters has no intention to bind himself further than is bound already, no intention of paying so long as he can avoid payment, and nothing before his mind but a desire, somehow or other, to gain time and avert pressure." (AC p. 526) It was argued in a subsequent case that an acknowledgment made "without prejudice" in the case of negotiations cannot be used as evidence of anything expressly or impliedly admitted. The House of Lords observed as follows: (WLR p.2072, para 16) "16. ......But when a statement is used as acknowledgement for the purpose of Section 29 (5), it is not being used as evidence of anything. The statement is not an evidence of an acknowledgement. It is the acknowledgement." Therefore, the "without prejudice" rule could have no application." 14. In view of the law laid down by the Hon'ble Suprem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion; (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;" 16. From a reading of the above provision, it is clear that a 'financial debt' is a debt along with interest which is disbursed against the consideration for the time value of money and may include any of the events enumerated in sub-clause (a) to (i). Therefore, this Tribunal is to see whether the amount paid by the Applicants to the Corporate Debtor, fulfil the other condition of "disbursement against consideration of time value and money", in order to come within the definition of "Financial Creditor." 17. On a careful reading of the Agreement dated 17-8-2015 between the parties, where the Financial Creditors, who were referred to as 'purchasers' disbursed the amount and the 'Corporate Debtor' has raised the amount with an object of having economic gain or commercial effect of borrowing. It is also found that the Financial Creditors agreed to invest in the project and purchased 1/6th undivided interest in the Resort. The Corporate Debtor was supposed to complete the Resort and to hand over th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itors prayed that, this tribunal may appoint any other Insolvency Professional as Interim Resolution Professional. This prayer is accepted. Hence, this Tribunal ordered as follows:- (a) The Application bearing No. IBA/17/KOB/2020 filed by M/s Urvashi Dilip Kamath and Dilip Gopal Kamath, the Financial Creditors, under section 7 of the IBC read with Rule 4 of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016 for initiating Corporate Insolvency Resolution Process (CIRP) against Moonriver Resorts (P.) Ltd. [CIN: U55101KL2009PTC024173], the Corporate Debtor, is admitted. (b) There shall be a moratorium under section 14 of the IBC, regarding the following: i. The institution of suits or continuation of pending suits or proceedings against the Corporate Debtor including execution of any judgment, decree or order in any court of law, Tribunal, arbitration panel or other authority; ii. Transferring, encumbering, alienating or disposing of by the Corporate Debtor any of its assets or any legal right or beneficial interest therein; iii. Any action to foreclose, recover or enforce any security interest created by the Corporate Debtor in respect of its pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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