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TMI Blog2021 (8) TMI 1134X X X X Extracts X X X X X X X X Extracts X X X X ..... ancial contract means, a contract between a Corporate Debtor and Financial Creditor. However, the MoU dated 05.07.2019 does not fit in this clause, in view of its genuineness, as Questioned by the Respondent. This Tribunal does not find any illegality in the Order passed by the Adjudicating Authority - Appeal dismissed. - Company Appeal (AT) (CH) (INS) No. 88 of 2021 - - - Dated:- 27-8-2021 - [Justice M. Venugopal] Member (Judicial) And [Kanthi Narahari] Member (Technical) For the Appellant : Mr. T. Mohan, Advocate For the Respondent No.2 : Mr. Karthik Seshadri, Advocate For Mr. Abhinav Parthasarathy, Advocate JUDGMENT ( VIRTUAL MODE ) Per: Kanthi Narahari Member(T) The present Appeal is filed by the Appellant , challenging the Order passed by the Adjudicating Authority (National Company Law Tribunal, Division Bench II, Chennai) in IBA/60/2020, dated 23.02.2021, whereby the Adjudicating Authority dismissed the said application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016. Appellants Submissions : - 1. Sri. T. Mohan, Learned Counsel appearing for the Appellant , submitted the brief facts. He submitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uance of legal notice dated 28.09.2019 to the Respondent and both of its Directors, calling upon them to pay the sum of ₹ 63,75,500/-. The total outstanding amount payable by the Respondent as on 16.12.2019 stood at ₹ 76,53,969.10/- including the Principal Amount of ₹ 50,00,000/-. 5. The Learned Counsel for the Appellant submitted that the Respondent admitted the liability in the MoU dated 05.07.2019 and the liability has also not been disputed by the Respondent, pursuant to issuance of a demand notice. 6. The Learned Counsel submitted that the Hon ble Adjudicating Authority failed to note that the liability of the Respondent has arisen pursuant to an MoU dated 05.07.2019 and the Respondent had undertaken to repay the outstanding amount within a period of 45 days i.e. on before 19.08.2019. The Hon ble Adjudicating Authority failed to note that the said MoU constitutes a Financial Agreement , within the meaning of Rule 3 (d) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules 2016. The Hon ble Adjudicating Authority also failed to appreciate that there is Debt and Default as defined under Section 3(11) and 3(12) of the Insolvency ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roperty at Srirangam to an extent of 15,315 sq. ft., registered as Document No. 3034 of 2015. 10. The Learned Counsel further submitted that the allegation made by the Appellant that the Respondent had sought for further loan of ₹ 50,00,000/- and had undertaken to pay interest at the rate of 25.2% per annum for the outstanding amount is entirely untrue. 11. The Learned Counsel submitted that the unregistered MoU appears to be a fraudulent document concocted mainly for the purpose of maintaining an application under Section 7 of the I B Code, 2016. The alleged MoU has not been taken in the name of Respondent and there is no assignment of debt in this regard. Further, there is no Financial contract between the Appellant and the Respondent and as stated above the Statement of Accounts filed by the Appellant would go to show that the loan was availed by Mr. A. Francis, as a personal Loan. 12. The Learned Adjudicating Authority has rightly held that no proof has been filed to satisfy that the amount of ₹ 50,00,000/- claimed by the Appellant was paid into the account of the Respondent and rightly held that the unregistered MoU dated 05.07.2019 is rejected. The Learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Further, in the recital it is stated that the borrowers i.e. the Respondent Company, its two directors have to settle the entire outstanding within a period of 45 days from the date of MoU (dt 05.07.2019). 17. The Appellant itself admitted the fact that the loan amount was released by the Appellant by way of RTGS to the account of the Managing Director of the Respondent Company. The Learned Adjudicating Authority also recorded the fact that the Appellant filed Statement of Account of State Bank of India (SBI) for the period from 01.04.2015 to 01.03.2017. From the said statement of account, a sum of ₹ 50,00,056/- was paid into the account of Mr. A. Francis, on 20.10.2015 through RTGS. From the records it is clear that the loan amount has not come to the account of the Respondent Company. The transaction between the Appellant, a partnership firm and the Director of the Respondent Company in his personal capacity. Further, the Learned Counsel for the Appellant heavily relied upon the MoU dated 05.07.2019 wherefrom the Learned Counsel wanted to submit that the Respondent Company represented by Mr. A. Francis, Director, Mrs. A. Jean Fleming Rose, Director, have signed the MoU, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, the said document cannot be taken as admissible evidence for the purpose of initiation of CIRP in a summary Jurisdiction by the Adjudicating Authority more particularly entertaining the Jurisdiction Under Sec: 7,9,10 of the I B Code, 2016. For the reason that there is no signatures of the other lenders on other pages of MoU , the Learned Adjudicating Authority rightly observed that the Appellant has not filed any proof to show that the amount of ₹ 50,00,000/- was paid into the account of Corporate Debtor and observed that the unregistered MoU dated 05.07.2019 is rejected. Further, it is also observed by the Adjudicating Authority that the registered deed of mortgage dated 20.10.2015, Mr. A. Francis has mortgaged his individual property as a security to the loan availed by him from the Appellant/Applicant. Further, it is also observed by the Adjudicating Authority that there is no privity of contract between the Appellant/Applicant and the Corporate Debtor. 18. The Learned Counsel for the Appellant relied upon the Judgment of the Hon ble Supreme Court, in Laxmi Pat Surana V. Union Bank of India Anr., in Civil Appeal No. 2734 of 2020 dated 26.03.2021. In the present c ..... 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