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TMI Blog2019 (7) TMI 1818X X X X Extracts X X X X X X X X Extracts X X X X ..... licant / principal and he has knowledge of law and already argued his personal cases well before this bench - this Authority has permitted the Authorized Representative/Power Agent viz., Mr. Gagan Bothra to argue the case of the Applicant/ principal. Accordingly, the issue No. i, is decided in favour of the Applicant against the Respondent. Whether the non-filing of the income tax return by the Applicant disentitles him to claim the re-payment of the loan advanced? - HELD THAT:- The Corporate Debtor after availing the loan, cannot take the plea that the Applicant has not produced any income tax return to demonstrate the source of loan. In this connection this authority also relies upon on the judgment given by Hon ble High Court of Madhya Pradesh, delivered on 07.03.2019 in SHRIMATI RAGINI GUPTA VERSUS PIYUSH DUTT SHARMA [ 2019 (4) TMI 114 - MADHYA PRADESH HIGH COURT] . In the light Of the above, the plea taken by the Corporate Debtor stands rejected and the issue is decided in favour of the Applicant. Whether the non-compliance with FED master direction No. 6/2015-16 dated January I, 2016 issued by the Reserve Bank of India annuls the loan transactions between the Applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e (the director) has due authority to represent the Corporate Debtor. Therefore, the plea raised by the Corporate Debtor with regard to the Board resolution for obtaining loan from the Applicant is misdirected, the same stands rejected. This authority takes judicial notice that during the pendency of this Application, the Resolution Plan came to be approved by the COC, which has been filed before this Authority under Section 30(6) read with Section 31(1) of the IBC, 2016. In view of this order, the Resolution Professional is directed as follows:- a). to treat the Applicant at par with other unsecured financial creditors and make the appropriate provision for payment to which he is entitled, in consultation with the COC and the Resolution Applicant, and file the supplementary affidavit to that effect before this authority, or b). to withdraw the Resolution Plan and constitute the COC afresh to get the Resolution Plan(s) approved with suitable modifications, as may be required. Application disposed off. - MA/462/2018 in CP/540/lB/2018 - - - Dated:- 31-7-2019 - CH. MOHD SHARIEF TARIQ, J. For Applicant Mr. Gagan Bothra, (Power Agent) For Respondent: Mr. Shan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrowings. Therefore, the RP is unable to admit the claim of Mr. Jonathan Mouralidarane for ₹ 5, 10, 72,990/- in the absence of acceptable evidence of the money having been brought into the accounts of the Corporate Debtor. Therefore, the Resolution Professional hereby determine the claim of Mr. Jonathan Mouralidarane, as financial creditor, after having regard to all records and information made available, clarifications called for, after having give him opportunity to present his case and further papers in support of his claim, as NIL . 4. The Applicant has submitted that the Corporate Debtor had financial dealings with the Applicant since 2014 and for such borrowing the Corporate Debtor, through its Managing director had executed documents i.e., stamped letter of acknowledgment of debt dated 21.02.2017, confirming the total borrowing and total debt due of ₹ 3,00,00,000/- (Three crore) as on 21.02.2017 and also executed a fresh Pronote dated 21.02.2017 for a sum of Rs, 3,00,00,000/-, and promised to repay the same on demand. 5. The Applicant has claimed that the total amount due and payable by the Corporate Debtor as on the date of filing Form &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sponsible for such certification. 11. Based on the pleadings of the parties and the oral submissions made, the issues involved in the present application are framed as follows: i. Whether the Authorized Representative/ Power Agent is legally entitled to argue on behalf of the Applicant? ii. Whether the non-filing of the income tax return by the Applicant disentitles him to claim the re-payment of the loan advanced? iii. Whether the non-compliance with FED master direction No. 6/2015-16 dated January I, 2016 issued by the Reserve Bank of India annuls the loan transactions between the Applicant and Corporate Debtor? iv. Whether the claim of the Applicant based on acknowledgment/ confirmation letter and pro-note, both dated 21.02.2017 and cheque dated 12.06.2017 is admissible in the absence of entry in the Books of Account of the Corporate Debtor? 12. In relation to the issue No. i, the learned Sr. counsel for the Resolution Professional has submitted that Authorized Representative/ Power Agent is not legally entitled to argue the case on behalf of the Applicant (Principal) unless he is enrolled as an advocate. In this regard the learned Sr. Counsel has r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocate Act, 1961 are extracted below: 32. Power of Court to permit appearances in particular cases. -Notwithstanding anything contained in this Chapter, any court, authority, or person may permit any person, not enrolled as an advocate under this Act, to appear before it or him in any particular case. 16. It is noted that in K. Anand's case (supra), cited by learned Sr. Counsel for the Respondent the provisions of Section 432 of the Companies Act, 2013 and Rule 45 of the National Company Law Tribunal, Rules 2016 were not the subject matter of interpretation before the Hon 'ble High Court of Madras. Therefore, the judgment given by the Hon ble High Court of Madras cannot be made applicable to the case on hand. 17. On co-joint reading of the provisions of Section 432 of the Companies Act, 2013 and Rule 45 of the National Company Law Tribunal, Rules 2016 r/ w. , Section 32 of the Advocate Act, 1961 there does not appear any bar against the Authorized Representative/ Power Agent to argue the case of the Applicant/ Principal. The Authorized Representative/ Power Agent is duly authorized in writing in this behalf by the Applicant / principal and he has knowledge of la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... similar set of facts and circumstances as are involved in the case on hand. Therefore, this authority relies upon the observations made by the Hon ble High Court of Madras in the above noted case, on the issue under reference. The Corporate Debtor after availing the loan, cannot take the plea that the Applicant has not produced any income tax return to demonstrate the source of loan. In this connection this authority also relies upon on the judgment given by Hon ble High Court of Madhya Pradesh, delivered on 07.03.2019 in Smt. Ragini Gupta vs piyush Dutt Sharma. In the light Of the above, the plea taken by the Corporate Debtor stands rejected and the issue is decided in favour of the Applicant. 19. In relation to the issue No. iii, the learned Sr. counsel for the Resolution Professional/ Corporate Debtor would contend that the Applicant is the Non-resident Indian therefore, he cannot lend money in cash to the Indian Company. In this regard, the learned Sr. counsel has referred to the Master Direction No.6/2015-16 dated 01.01.2016, issued by the Reserve Bank of India, which says that a company incorporated in India may borrow in INR, on repatriation or non-repatriation basis, fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsel has no relevance with the issues involved in the present case. Therefore, the same cannot be made applicable to the facts and circumstances of the case on hand. 21. Further, if the arguments of the learned Sr. counsel for the Respondent have any relevancy with case on hand, then it is the company (Corporate Debtor), which has failed to comply with the said direction issued by the RBI and the acceptance of the loan by the Corporate Debtor from the Applicant is the culpability attributable to the Corporate Debtor. It is settled proposition of law that no one can be allowed to reap the benefit of his own wrong. In this connection reliance is placed on the judgment of Hon 'ble Apex Court given in Oil and Natural Gas Corporation Ltd. Vs. Modern Construction and Company reported in (2014) I Supreme Court Cases 648, wherein under para 20 of the Order, the Hon 'ble Court was pleased to make reference to its earlier ruling given in Bhartiya Seva Samaj Trust Vs. Yogeshbhai Ambalal Patel reported in (AIR 2012 SC 3285), wherein the Hon ble court while dealing with a similar issue, observed as follows:- 28. A person alleging his own infamy cannot be heard at any forum, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Foreign Exchange Management Act. In view of the discussion made, the cash transactions between the Applicant and the Corporate Debtor do not involve any violation of FED master direction No. 6/2015-16 dated January 1, 2016 issued by the Reserve Bank of India, as contended. Accordingly, the issue no. iii stands decided in favour of Applicant and against the Respondent. 23. In relation to the issue No. iv, the Respondent would contend that there is no document to substantiate the claim of the Applicant. There is a demand promissory note dated 21.02.2017 for ₹ 3 Crores and there is no common seal affixed on it, there is no board resolution authorizing such borrowing and there is no document demonstrating the disbursal of funds, receipt of funds or utilization of funds by the Corporate Debtor, the only document relied upon by the Applicant is his cash register (it is Cash book). This cash register is not supported by return of income, audited accounts, statement of account and it is sealed with seal of a Chartered Accountant without any details stated therein about the nature of certification, purpose of certification and who is responsible for such certification. 24. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount due by us to you is ₹ 000/- (Two Crore and fifty Lakhs Only). Today we have received a further sum of ₹ 50, 00, 000/- (Fifty Lakhs Only) by cash from you and as on this date M/S. PRC International Hotels Private Limited owns you a total sum of ₹ 3, 00, 00, 000/- (Three Crores only). All the borrowings are made for the business of M/S. PRC International Hotels Pvt. Ltd with the knowledge, consent and permission of the other directors. Today I have executed a new Pronote for the total amount if ₹ 3,00, 00, 000/ -(Three Crore Only) in capacity as the Managing Director of M/S. PRC International Hotels Pvt Ltd agreeing to pay principle together with interest at the rate of Three percent (3%) per month, agreeing to pay interest every month. This letter is given to you in confirmation of the receipt of the above amount and in confirmation of executing the Pronote dated 21.02.2017. I have received back the old original promissory notes that were executed by us as and when the borrowings were made. We undertake to discharge your entire loan with interest at the earliest and we are making arrangements to repay your amount within a period of four mon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the signature, thus the presumption under Sec. 139 would operate. The Respondent failed to rebut the presumption by adducing any cogent or credible evidence. In addition to this a pronote has also been executed by the managing director viz., Senthil kumar on 21.02.2017. Therefore, the Applicant has proved his case by over-whelming evidence to establish his claim based on acknowledgment/ confirmation letter and pro-note, both dated 21.02.2017 and Cheque dated 12.06.2017 [along with 'Cash Book'] that are admissible in evidence which were issued by the Corporate Debtor towards the discharge of an existing liability and legally enforceable debt. Accordingly, issue No. iv is decided in favour of the Applicant against the Respondent, 29. It is noted that as per the recitals of the loan confirmation letter dated 21.02.2017 , executed by managing director viz. Senthil Kumar, the amount of loan was agreed to be repaid by the Corporate Debtor to the Applicant with interest@ 3 % per month, which seems to be excessive. Therefore, in order to strike the balance and to do substantial justice between the parties, the rate of interest is fixed at ₹ 24% p.a., which will be effecti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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