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TMI Blog2022 (12) TMI 476X X X X Extracts X X X X X X X X Extracts X X X X ..... orate Debtor - this Appellate Tribunal do not find any error in the impugned order whereby the Appellant has not been treated as Financial Creditor and in effect Section 7 Application under I B Code, 2016 the Appellant was not entertained. Whether the High Seas Sale Agreement dated 23.04.2012 is to be treated as source document or ought to be considered along with other two agreements i.e. Loan Agreement dated 09.04.2021 Loan Renewal and Working Capital Loan Agreement dated 21.03.2013 as part of full documentation? - HELD THAT:- From the impugned order 27.04.2021 it is seen that the Adjudicating Authority had detailed examination of all the record and heard the submissions by both the parties in course of various stages of 17 hearings. It is for neither expected nor desirable for this Appellate Tribunal to go into detailed of various claims and counter claims based on the alleged Ledger Accounts of both the parties which evidently has been scrutinised in details and gone into by the Adjudicating Authority - This Appellate Tribunal observes that the Adjudicating Authority has treated High Seas Sale Agreement as a source documents. Looking to the detailed examination done by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Appellate Tribunal, is of the considered opinion that there is no error in the impugned order dated 27.04.2021, passed by the Adjudicating Authority. Appeal is devoid of any merit and stand dismissed - Appeal dismissed. - Company Appeal (AT) (CH) (Ins) No. 230 of 2021 - - - Dated:- 15-11-2022 - [Justice M. Venugopal] Member (Judicial) And [Naresh Salecha] Member (Technical) For the Appellant : Mr. Thriyambak J. Kannan, Advocate Ms. Annapoorani, Advocate Ms. Hareepriya, Advocate For the Respondent : Mr. Pardeep Dahiya, Advocate JUDGMENT (Virtual Mode) NARESH SALECHA, MEMBER (TECHNICAL) The Present Appeal is filed against the impugned order dated 27.04.2021 passed in IBA/1087/2019 by the Adjudicating Authority (National Company Law Tribunal, Division Bench-II, Chennai), whereby, the Adjudicating Authority dismissed the Petition filed under the Insolvency Bankruptcy Code, 2016 (in short I B Code, 2016). Brief Fact: 2. In the present appeal, before this Appellate Tribunal M/s Shakti International Pvt. Ltd. is the Appellant as Financial Creditor and M/s Pandi Devi Oil Pvt. Ltd. is the Respondent as Corporate Debtor . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. The Learned Counsel for the Appellant submitted that the Appellant granted a loan amount of Rs.1,84,00,000/- to the Respondent by way of an agreement dated 09.04.2012. Subsequent to the Loan Agreement , a High Seas Sale Agreement was executed between the Appellant and the Respondent dated 23.04.2012, wherein the Appellant agreed to import crude palm oil in bulk for and on behalf of the Respondent for a consideration of USD 1191.25 per metric ton and it was agreed that any default under this High Seas Sale Agreement would constitute an operational debt. 9. The Learned Counsel for the Appellant stated that the Loan Agreement was renewed by way of a Loan Renewal and Working Capital Loan Agreement dated 21.03.2013 executed between the parties, and the repayment period was extended until 30.06.2013. The Learned Counsel for the Appellant pointed out that in the said renewal of Loan Agreement , the Appellant also agreed to grant a further loan to meet the working capital requirements of the Respondent to the extent of Rs. 71,00,000/- out of which Rs.35,00,000/- to be paid directly to Suraj Agro Infrastructure (India) Pvt. Ltd. on behalf of the Respondent t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... application for initiation of Corporate Insolvency Resolution Process against the Respondent was filed before the Adjudicating Authority in IBA/1087/2019 but the same was dismissed vide Impugned Order dated 27.04.2021 on the ground that there is no financial debt. 16. The Learned Counsel for the Appellant assailed the conduct of the Respondent who has also taken contradictory stands in respect of the repayment of the amount under the Loan Agreement . The Learned Counsel for the Appellant stated that the Respondent in their counter has mentioned that the loan amount was repaid on 04.04.2012 even though the Loan Agreement itself was dated 09.04.2012; 17. The Learned Counsel for the Appellant stated that the Loan Agreement and the High Seas Sale Agreement are two different contracts and that the relief sought for by the Appellant is under the Loan Agreement . The outstanding due payable by the Respondent was on account of the Loan Agreement entered into between the parties and had nothing to do with the High Seas Sale Agreement . Further, the MoU dated 21.03.2013 clearly distinguishes the dues payable under the Loan Agreement and the high seas sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Learned Counsel for the Appellant further stated that as of today, the Respondent has defaulted in respect of a financial debt owed to the Appellant . Therefore, there is an existence of default on the face of it by the Respondent . 23. The Learned Counsel for the Appellant pleaded that the impugned order dated 27.04.2021 needs to be set aside and his appeal may be allowed. Respondent s Submissions : 24. The Learned Counsel for the Respondent stated that appeal is baseless and devoid of any merit and therefore should be dismissed. The Learned Counsel further mentioned that the Adjudicating Authority has done complete due diligence and after considering all relevant facts of the case has come to right decision contained in the impugned order . The Learned Counsel for the Respondent further stated that the Appellant had filed the application under Section 7 of the I B Code, 2016 claiming itself to be a Financial Creditor which is not true and does not collaborate with the facts and the evidence. 25. The Learned Counsel for the Respondent emphasised that as per the requirement of law under the I B Code, 2016 and as held by Hon'ble Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent further pointed out that on 04.04.2012, the Appellant had transferred the Respondent an amount of Rs. 1,84,00,000 through RTGS and on 04.04.2012 itself the Respondent had given back a total amount of Rs.1,25,00,000/- in five transactions of Rs. 25,00,000/- each via RTGS. 31. The Learned Counsel for the Respondent stated that the Appellant with mala-fide intention has not mentioned about the payments made by the Respondent in the application under Section 7. The Learned Counsel for the Respondent further mentioned that as per the alleged Loan Renewal and Working Capital Loan Agreement dated 21.03.2013 against the amount of Rs. 71,00,000/- mentioned in this agreement, the Appellant had given only Rs. 35,00,000.00 on 08.04.2013 and on the same date i.e 08.04.2013, there was an excess credit of Rs. 41,75,085.00 in favour of the Respondent . The Learned Counsel for the Respondent submitted that the Calculation Memo depicting the payments made by the Respondent clearly show that by suppressing the above LC-I and LC-II amounts, the Appellant has wrongly depicted to show as if the Appellant to have a debit of 5.25 Crores but as per the Calculation Memo in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cost as the Appeal is being devoid of any merits. Findings 36. Heard Learned Counsel for the Appellant and the Respondent and also perused record made available to us. Several issues have been raised in the Appeal which are required to be deliberated upon before coming to final conclusion. (I) (a) What is nature of relationship between the Appellant - M/s Shakti International Pvt. Ltd. and the Respondent - M/s Pandi Devi Oil Pvt. Ltd. (b) Whether above relationship is to be treated as Buyer / Seller in commercial transactions or as Financial Creditor and Corporate Debtor . (II) Whether the High Seas Sale Agreement dated 23.04.2012 is to be treated as source document or ought to be considered along with other two agreements i.e. Loan Agreement dated 09.04.2021 Loan Renewal and Working Capital Loan Agreement dated 21.03.2013 as part of full documentation. (III) Whether the Arbitral Award dated 18.03.2015 based on consent terms dated 18.03.2015 is subject to subsequent MoU dated 19.03.2015 entered into between the Appellant and the Respondent to give effect to consent term dated 18.03.2015. Issue No. (I) (a) What is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the payment to the Party of the First Part and to lift the commodity from the tanks wherein it was arranged to have them stored Similarly, Para 5 and 6 at page 5 of the said MoU further reads as under:- 5. The Party of the Second Part hereby agrees that as soon as the Commodity is processed and ready to be sold, the Party of the Second Part shall sell the same in the market under the supervision of the Party of the First Part and direct all such proceeds generated from the sale of the said Commodity, in the favour of the Party of the First Part. 6. In furtherance to the above mentioned Clauses 4 and 5, the Parties hereby agree that the Party of the Second Part shall sell the said Commodity directly to a third party, however such a transaction shall take place under the supervision of the Party of the First Part and the Party of the Second Part shall proceed with finalizing the sale only after having obtained written consent from the Party of the First Part. From the reading of these agreements i.e. High Seas Sale Agreement , Loan Agreement , Loan Renewal and Working Capital Loan Agreement along with Memorandum of Understanding dated 21.03.2013, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent as buyer of the crude palm oil. To facilitate the same transactions the Appellant agreed to give financial assistance by way of loan of Rs. 1,84,00,000/- to the Respondent on interest. On alleged failure to repay the same of further Renewal Agreement was entered into which has proviso for additional working capital loan of Rs. 71,00,000/-. Although, Loan Agreement was subsequent an independent agreement however in the given circumstances and from averments made, it looks like that this was part of commercial conditions and financial arrangements between the Appellant and the Respondent . Both the parties have alleged outstanding dues from each other. The Appellant has claimed on non-payment dues of the loan amount along with interest in addition to the subsequent Rs. 35,00,000/- paid to M/s Suraj Agro Instructure (India) Pvt. Ltd. on behalf of the Respondent as part clearance of the Respondent rental area of their warehouse as per Loan Renewal and Working Capital Agreement . On the other hand, the Respondent as given calculation memo in the counter statement dated 12.10.2021 according to which there is alleged excess amount payable in favour of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent/consent term dated 18.03.2015, both the parties agreed to sign MoU dated 19.03.2015 to give effect to consent terms. It has been brought to the notice of this Appellate Tribunal that as per this MoU , in view of financial difficulties of the Respondent , the Appellant agreed to run Respondent s plant/factory independently. The Appellant also further agreed to give advance of Rs. 25,00,000/- to the Respondent for overhauling/ revamping plant and machinery. The Respondent agreed for a minimum turnover of 3,000 MTS per month for the entire MoU period so that proceeds can be used for making payment of Rs. 5,25,00,000/- along with interest to the Appellant . According to Para 15.8 of MoU dated 19.03.2015, all prior agreements and all prior negotiations representations and communications relating to the same subject are superseded by this MoU . The Respondent has alleged that the Appellant has not kept their part agreed upon both the parties in the MoU including giving advance for Rs. 25,00,000/- and rendering assistance to keep the plant into operation as per MoU . This Appellate Tribunal observes that reading all above, it seems that consent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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