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TMI Blog2024 (9) TMI 1498X X X X Extracts X X X X X X X X Extracts X X X X ..... cation needs to be admitted unless it is incomplete, in which case, a notice to be given to the applicant to rectify the defects within seven days of receipt of notice from the Adjudicating Authority, per Innoventive Inds Ltd [ 2017 (9) TMI 58 - SUPREME COURT] . In Shobhnath Ors Vs Prism Industrial Complex Ltd [ 2019 (8) TMI 1700 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] , this Tribunal held the Adjudicating Authority is only required to ensure there is a debt and default on the basis of the record produced before it. On perusing the record, Balance Sheets of the corporate debtor as also the legal notice of demand prima facie reveal there is no impediment to admit the petition under Section 7 of the Code against the Respondent/C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /- given by the appellant, as a director of the Corporate Debtor. Now the question if the money advanced by the shareholder has a commercial effect of borrowing is dealt with in Shailesh Sangani V Joel Cardoso 2019 SCC OnLine NCLAT 52 wherein it was held:- Due to fluctuations in market and the risks to which it is exposed, a Company may at times feel the heat of resource crunch and the stakeholders like Promoter, Director or a Shareholder may, in order to protect their legitimate interests be called upon to respond to the crisis and in order to save the company they may infuse funds without claiming interest. In such situation such funds may be treated as long term. Once it is so, it cannot be said that the debt has not been disbursed again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s No. 1 and 2 from time to time with stipulation of interest, leaving an outstanding liability of Rs.18,67,11,000/- coupled with the fact that the Corporate Debtor jointly undertook to refund such unsecured loan to Respondents No. 1 and 2 in terms of clause (2) of the Share Purchase Agreement leaves no room for doubt that the outstanding unsecured debt had all the trappings of a Financial Debt . 5. Further in Innoventive Industries Ltd V ICICI Bank (2018) 1 SCC 407 the Hon ble Supreme Court held the corporate debtor commits default, the Adjudicating Authority has to look into evidence produced by financial creditor in order to satisfy what would amount as a debt and dispute. Para 30 of the judgement read as under:- 30. On the other hand, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. At this juncture, this 'Tribunal' relevantly points out that in respect of 'Loan' the 'Borrowing' is primarily is for the benefit of 'Borrower'. In fact, the 'Lender' is in receipt of benefit, through 'interest'. In case of 'Loan', the obligation to repay the sum arises immediately n receipt of 'Loan'. 55. It cannot be ignored that 'Loan' is payable only, when the obligation to repay the money arises, in terms of the 'Agreement'. After all, the stark reality is that 'Loan' is taken at the instance of a person requiring money. 60. In the present case, it is to be pointed out that at no point of time the Respondent/Company sought to avoid the 'Loan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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