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TMI Blog2024 (7) TMI 271X X X X Extracts X X X X X X X X Extracts X X X X ..... ing initiation of Corporate Insolvency Resolution Process (hereinafter referred to as 'CIRP') against the Respondent/Corporate Debtor. Facts of the Case: 2. The present appeal is being filed under Section 61 of the IBC against the Impugned Order passed by the Ld. Adjudicating Authority in C.P. (IB) No. 23 of 2023 whereby the Ld. Adjudicating Authority dismissed the application filed on behalf of the Appellant under Section 7 of the IBC seeking initiation of CIRP against the Corporate Debtor. The facts necessitating the filing of the present appeal before this Hon'ble Tribunal are as follows: Appellant's case: 3. In 2018, the respondent, SPG Macrocosm Limited, approached the appellant, Fortune Land Holdings LLP, seeking a loan of Rs. 70,00,000/- (Rupees Seventy Lakhs only). 4. On 01.10.2018, a Loan Agreement was executed between the parties for the disbursal of the loan amount, repayable within 36 months with an interest rate of 15% per annum. An Unsecured Demand Promissory Note was also executed as security for the loan. 5. The loan amount was disbursed as follows: Date Amount (in Rupees) Mode of Payment 09.10.2018 15,00,000/- R.T.G.S 09.10.2018 20,00,000/- R.T.G.S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vershadowed the clear evidence of debt and default presented by the appellant. 12. Procedural Errors and Due Process Violations: 12.1. Failure to Consider Additional Evidence: The Adjudicating Authority failed to adequately consider the additional affidavit and the 'Record of Default' from NeSL. This oversight constitutes a significant procedural error and a violation of the appellant's due process rights. 12.2. Unjust Rejection of the Application: The dismissal of the appellant's application without proper consideration of all evidence and compliance with procedural requirements resulted in a miscarriage of justice, adversely affecting the appellant's right to seek redress under the IBC. 13. For the foregoing reasons, the appellant respectfully requests that this Appellate Tribunal set aside the Impugned Order dated 29.02.2024 passed by the Adjudicating Authority and admit the application Respondent's Brief 14. The respondent, SPG Macrocosm Limited submits in defense of the Impugned Order dated 29.02.2024 passed by the National Company Law Tribunal, Indore Bench, which correctly dismissed the appellant's application under Section 7 of the Insolv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Indian Stamp Act, 1899, with the necessary stamp duty and penalty to be collected under Section 35 and sent to the Collector as required under Section 38 of the Act. The appellant's failure to address this issue further undermines their claim. 22. The Adjudicating Authority correctly applied the judgment in Thenappa Chettiar vs. Andiyappa Chettiar (AIR 1971 MAD 290), which clarifies that the duty paid on a Promissory Note "payable on demand" under Schedule I Article 49(a)(iii) of the Indian Stamp Act, 1899, was insufficient in this case. The issue was correctly identified as related to the Stamp Act, not the IBC. 23. The Adjudicating Authority appropriately focused on the insufficiency of the stamping on the Promissory Note rather than solely on the existence of debt and default. This legal nuance is critical, as procedural and evidentiary compliance is fundamental to the adjudication process. 24. For the foregoing reasons, the respondent respectfully requests that this Appellate Tribunal uphold the Impugned Order dated 29.02.2024 passed by the Ld. Adjudicating Authority, thereby dismissing the appellant's application under Section 7 of the IBC. Appraisal : 25. Heard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loan amount of Rs. 70,00,000/- granted by the Appellant is clearly mentioned under the heading of 'Non-Current Liabilities'. 33. Now we further look into the other evidence of the information utility. On enquiry by the Adjudicating Authority, the Appellant during the proceedings submitted the record of financial information i.e., 'Form C', on the portal of the information utility namely National E-Governance Services Limited (NeSL) which was subsequently authenticated by NeSL on 22.08.2023 pursuant to which 'Form D' i.e., 'Record of Default' was issued to the Appellant in respect of the default of debt owed by the Respondent/Corporate Debtor. 34. The above-mentioned evidence presented by the Appellant, including the balance sheet and the 'Record of Default', unequivocally establishes the debt and default. Stamping of Promissory Note: 35. The Adjudicating Authority's focus on the stamping issue of the unsecured promissory note, while relevant, should not overshadow the clear evidence of debt and default. Its legal validity has been well settled by the Hon'ble Apex court in its Judgement in Curative Petition (C) No. 44 of 2023 in Review Petition (C) No. 704 of 2021 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat is not duly stamped cannot be validated by impounding and cannot be admitted as secondary evidence, instrument under Section 2(14) means only original and does not include a copy thereof, loses its relevance, particularly when other compelling material is on record to establish debt and default. 38. It is evident that, the debt and default are clearly established by the material on record in the form of the Loan Agreement, the Audit Report and also Record of Default (Form D) from the Information Utility (NeSL) taken together, as was examined in earlier part of the Appraisal. Conclusion 39. For the reasons stated above, this Appellate Tribunal finds that the Adjudicating Authority erred in dismissing the application under Section 7 of the IBC. The existence of debt and default has been clearly established, and the procedural requirements have been met by the Appellant. The issue of stamping does not outweigh the substantive evidence of debt and default. 40. Order The appeal is allowed. The Impugned Order dated 29.02.2024 passed by the Adjudicating Authority is set aside. The application filed by the Appellant under Section 7 of the IBC deserves to be admitted. The matter ..... X X X X Extracts X X X X X X X X Extracts X X X X
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