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TMI Blog2022 (12) TMI 373X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.4,62,92,880/-. In the very same letter, the Proprietor of the Appellant admitted the receipt of amount Rs.32 lacs on 16.04.2018. In response to the letter dated 25.06.2018, the Corporate Debtor vide its reply dated 14.07.2018 addressed to the Proprietor of the Appellant stating that the balance amount claimed by it do not contain any account ledger substantiating the balance outstanding and requested to provide the year wise ledger of last 5 years of both the accounts i.e. the Appellant and the Proprietor (Mr. Ravinder Singh). The Appellant has not produced any reply or response to the letter dated 14.07.2018 nor produced any documentary evidence to establish the debt owed by the Corporate Debtor. The Appellant failed to establish with documentary evidence that there is a debt and default. The Adjudicating Authority passed a reasoned order and no interference is called for. Appeal dismissed. - Company Appeal (AT)(Insolvency) No. 201 of 2022 - - - Dated:- 8-12-2022 - [ Justice Rakesh Kumar Jain ] Member ( Judicial ) And [ Kanthi Narahari ] Member ( Technical ) For the Appellant : Mr. Praveen Chauhan, Mr. Aakash Dubey, Mr. Sarthak Sawhney and Ms. Malvica Satija , Ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 000/- was paid and no further payment was made by the Corporate Debtor. Having aggrieved by the aforesaid default the Appellant issued demand letter dated 25.06.2018 to the Corporate Debtor demanding repayment of unsecured loan of amount of Rs.4,62,92,880/-. Further, the Appellant issued another demand letter dated 18.07.2018 to the Corporate Debtor. The Corporate Debtor sent a reply dated 14.07.2018. 7. Having not paid the due amount by the Corporate Debtor, the Appellant filed Application under Section 7 of the I B Code, 2016 before the NCLT, Kolkata Bench, clearly mentioning that the amount of debt granted by the Appellant is Rs.4,62,92,880/- and relied upon the Balance Sheet for the Financial Year 2015-16 of the Corporate Debtor which reflects the said amount as outstanding. The Corporate Debtor filed its reply and contested the matter stating that all the dues of the Appellant have been settled in terms of MoU dated 27.06.2017. 8. It is submitted that the Learned Adjudicating Authority erred in holding that by way of MoU dated 27.06.2017 the liability of the Corporate Debtor towards both the Appellant and Sh. Ravindra Singh (Proprietor) was over. However, the said findin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingly, the parties entered into an MoU dated 22.06.2017 for valuable consideration of Rs. 26.00 crores well above the auction price of Rs.21.58 crores. The main reason for higher consideration was that the negotiations also contemplated release of personal guarantees of the Directors. 12. It is submitted that out of Rs. 26 crores the banks would be paid of under OTS and the balance consideration would then be paid to the outgoing parties towards full and final settlement of all the liabilities whatsoever and howsoever of the outgoing parties. The same was agreed to be paid through purchase of their shares and the balance would be payable in the ratio of shareholding / profit sharing of the outgoing parties. 13. The outgoing Directors confirmed vide their letter dated 24.07.2017 that the amount of Rs.26 crores payable as consideration including withdrawal of the guarantees of the outgoing parties as per terms of the MoU and the same was for the full and final settlement of all the liabilities. 14. It is submitted that the Corporate Debtor vide its letter dated 12.04.2018 confirmed that the net liability of Mr. Ravinder Singh stood at Rs.32 lacs after the adjustment in terms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er analysing the pleadings, the moot point for consideration is whether the Appellant has made out any case to allow the Appeal as prayed for. 20. The Appellant filed an Application under Section 7 of the I B Code, 2016 before the Adjudicating Authority (NCLT), Kolkata Bench, against the Corporate Debtor seeking initiation of CIRP on the ground that the Corporate Debtor committed default in paying the financial debt of a sum of Rs.4,62,92,880/- as per Part-IV of Form-1. After Constitution of Cuttack Bench, the Application was transferred to the Cuttack Bench and renumbered as T.P. No. 28/CTB/2019. The Corporate Debtor filed its reply and contended that the erstwhile directors entered into an MoU dated 22.06.2017 and the net consideration was fixed as Rs.26 crores to be paid to the outgoing parties / directors. It is further contended that on 12.04.2018 a letter was issued to Mr. Ravinder Singh confirming that his net liability after adjustments in terms of the MoU and clarifications stands at Rs.32 lacs. It is stated that the letter was duly acknowledged by Mr. Ravinder Singh and on the basis of the said acknowledgement, the balance due of Rs.32 lacs was paid through RTGS on 16. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learly therein that no amount is due and payable to the applicant. 14. There is no agreement regarding terms and conditions or regarding repayment etc. There is no bank statement or any other supporting evidence produced in support of his claim by the applicant that what is the mode of transaction for providing such stated loans to the Corporate Debtor. There are discrepancies noted in the ledger sheet of the applicant. We cannot take into consideration one or two Balance-Sheets of the company and conclude the case. Furthermore, there is no documents to show the loan transacted in to the account of the corporate debtor. From the arguments and documents, it is clear that the entire payment is towards the business transfer agreements between the parties for takeover of the Corporate Debtor, various loans were settled by the new Directors. There is also a Memorandum of Understanding (MOU) for the transfer of the shares from the erstwhile Directors to the present Directors. The agreements between the parties were entered on 22.06.2017. However, till 25.06.2018, the applicant has not issued any E-mail or Letter claiming the amount. The claim was after receipt of the full and final ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is clear that as on 31.03.2018, no amount is due and payable by the Corporate Debtor to the Appellant / Applicant. 23. Further, the Adjudicating Authority observed that there is no agreement regarding terms and conditions of repayment and there is no bank statement or any other supporting evidence produced in support of the claim of the Appellant that what is the mode of transaction for providing such stated loans to the Corporate Debtor. 24. The Respondent filed a detailed counter to this Appeal and narrated the facts with regard to the history of the Corporate Debtor. There is no denial that the Corporate Debtor was promoted by the directors (as stated supra) including the proprietor of the Appellant. However, the Corporate Debtor was classified as NPA on 13.02.2013 and the default amount as on the date of NPA/stood at Rs. 8,55,05,409/- for which the Directors who are the personal guarantors were liable. The bank issued notice under Section 13(2) of the SARFAESI Act, 2002 and initiated recovery proceedings against the Corporate Debtor and personal guarantors of the Corporate Debtor. While so, the property was put for sale on multiple times by the bank, however, the aucti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15-16, however the MoU entered on 27.06.2017 which is subsequent to the Balance Sheet. The Appellant failed to produce any document subsequent to entering into as MoU to establish that the Corporate Debtor owed the amount to the Appellant. 28. For filing an Application under Section 7 of the I B Code, 2016 seeking for Initiation of Corporate Insolvency Resolution Process against a Corporate Debtor before the Adjudicating Authority, the Applicant has to establish that a default has occurred. Sub-section (3) of Section 7 thus read as under: The Financial Creditor shall along with the Application furnish (a) record of the default recorded with the information utility or such other record or evidence of default as may be specified, (b) the name of Resolution Professional proposed to act as an Interim Resolution Professional; and (c) any other information as may be specified by the Board. 29. As per the provisions of law the Financial Creditor has to furnish the details of the default. As stated (supra) the Appellant / Applicant has failed to establish that the Corporate Debtor owed an amount to the Appellant and it defaulted. Further, the Appellant failed to establish the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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