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TMI Blog2022 (8) TMI 1109X X X X Extracts X X X X X X X X Extracts X X X X ..... leadings. In the present case, the debt has been converted into equity shares, hence there is no debt at the present. Application filed under section 7 of Insolvency and Bankruptcy Code, 2016 is dismissed. - CP ( IB ) No. 2079/KB/2019 - - - Dated:- 23-8-2022 - Shri Rohit Kapoor : Member ( Judicial ) And Shri Balraj Joshi : Member ( Technical ) For the Financial Creditor : Ms. Urmila Chakraborty, Advocate Mr. Anurag Bagaria, Advocate Ms. Riya Debnath, Advocate For the Corporate Debtor : Mr. Reetobroto Mitra, Advocate Mr. Debjyoti Saha, Advocate ORDER Per Balraj Joshi, Member (Technical) 1. This Court convened through hybrid mode. 2. This is a Company Petition filed under section 7 of the Insolvency and Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... akh only) with an interest of 12% per annum. 7. In December, 2018, the Financial Creditor sold 4,14,000 equity shares out of 25,20,158 equity shares in the Corporate Debtor to Modern Malleables groups and their nominees were inducted as additional directors of the Corporate Debtor. 8. A new Board of Directors of the Corporate Debtor was formed, the Financial Creditor was the Managing Director of the Corporate Debtor till 16 September 2019. 9. The Financial Creditor on several occasions requested the Corporate Debtor to refund the loan and also sent an email on 16 August 2019. 10. Vide email dated 23 August 2019, the Corporate Debtor served a notice dated 22 August 2019 to the Financial Creditor, intimating the Financial Creditor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the Corporate Debtor; d. Copy of the Audited Balance Sheet of the Corporate Debtor for the Financial Year 2018-19. 16. The learned Counsel for the Financial Creditor has placed reliance on two judgments of the Hon ble NCLAT viz. Jayanthi G. Ravi v. Chemizol Addictive P Ltd. C.A. (AT) (Ins.) No. 553/2020 and Shailesh Sangani v. Joel Cardoso Anr. 2019 SCC OnLine NCLAT 52 wherein the Hon ble NCLAT held that the loan given by the shareholder/director is a financial debt. 17. The learned Counsel for the Financial Creditor led us through the minutes of the meeting held on 22 August 2019 wherein it was resolved that the loan given by the Directors would be converted into equity share. Further, under point 11, it has been stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Creditor into equity shares of the Corporate Debtor subject to the members approval in the Annual General meeting to be held on 16 September 2019. e. In the Annual General Meeting held on 16 September 2019 , the loan of the Financial Creditor was converted into equity shares and the Financial Creditor was allotted 2,70,000 equity shares of the Corporate debtor, the Financial Creditor accepted the conversion without any protest at the said meeting. f. The Financial Creditor has also initiated proceedings under section 9 of the Code which is registered as C.P. (IB) No. 2058/KB/2019 and the sole intention of the Financial Creditor is to extort money from the Financial Creditor. Analysis and Findings 21. Heard the learned Couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Hence, the Financial Creditor was well aware of Item No. 8 that was to be discussed in the Annual General Meeting, but the Financial Creditor did not raise any objection with regard to the Item No. 8 after receipt of the notice. 27. This Adjudicating Authority is a summary court and hence, we cannot venture into a detailed proceeding, the main points in a section 7 petition is to check whether there is a debt and default with the aid of the documents annexed with the pleadings. In the present case, the debt has been converted into equity shares, hence there is no debt at the present. 28. In view of the above observations, CP (IB) No. 2079/KB/2019 filed under section 7 of Insolvency and Bankruptcy Code, 2016 is dismissed. The applica ..... X X X X Extracts X X X X X X X X Extracts X X X X
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