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TMI Blog2025 (1) TMI 684X X X X Extracts X X X X X X X X Extracts X X X X ..... n amount given by Respondent No.1 into the account of Corporate Debtor. In the present case, Financial Creditor had placed material i.e disbursement details, bank account statement indicating disbursement, ledger statement, audited balance sheet of the Corporate Debtor since the Financial Year 2012-2013 to 2016-2017 and 26AS, which confirms that Financial Creditor had provided Loan to the Corporate Debtor and the Corporate Debtor acknowledged the same financial debt and committed default in repayment of the financial debt. Further Financial Creditor / Respondent No.1 gets support from the case of Asset Reconstruction Company (India) Ltd. v. Bishal Jaiswal Anr [ 2021 (4) TMI 753 - SUPREME COURT ], wherein the Hon'ble Apex Court has held that entries in balance sheets will amount to acknowledgement of debt under Section 18 of the Limitation Act, 1963 for the purposes of filing of an Application under Section 7 of the Insolvency and Bankruptcy Code, 2016. Conclusion - The transaction was a financial debt, the Corporate Debtor defaulted on repayment. The debt and default has been established. There are no infirmity in the orders of the Adjudicating Authority - appeal dismissed. - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hu Pasari and the same was approved by Mr. Birendra Kumar Pasari. 4. While filing the Section 7 Petition, the Financial Creditor has not enclosed any financial contract. Respondent Financial Creditor has suppressed term sheet , which contains terms and conditions received vide email dated 14.05.2012, which is the contract between the parties. It contained reciprocal rights and obligations and from its perusal it cannot be termed as financial debt. 5. Birendra Kumar Pasari, who is the Director of the Financial Creditor and also the Corporate Debtor had filed a police complaint under Section 464/420 read with Section 120B of the of the IBC, 1860 before the Delhi Police, complaining that the term sheet is a forged document. The said complaint was inquired by the Delhi Police, Defence Colony, in which it was confirmed that the said Terms and Conditions of Development of the Project duly exists and the signature of the Respondent No.3 are not forged as alleged. On information collected under RTI, it is revealed that the term sheet was duly exchanged between both the parties on their emails through their representatives/associates regarding development of the said project. So it is confi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The fabrication of the alleged acknowledgment letter is placed at Page 549-551 of the Appeal. It is evident from the bare reading of the document that it does not bear the signatures of the Appellant or the Corporate Debtor. Further, the said letter of the Financial Creditor as addressed to the Corporate Debtor is signed by none other than Mr. Birendra Kumar Pasari and not by the other Director of the Corporate Debtor i.e. the Appellant Mr. Birendra Kumar Pasari is using Financial Creditor and he is the ultimate master mind of the entire fraud being committed on the Corporate Debtor. The alleged Loan Document does not have any Board Resolution and authority in favour of Mr. Birendra Kumar Pasari from the Corporate Debtor authorising him to enter into such loan transaction and is thus in contravention of Sec. 166 and Sec. 184 of the Companies Act, 2013, and Duties of Directors and Disclosure of Interest by Directors. A dispute between two set of shareholders has been given a colour of Section 7 petition and the Company/Corporate Debtor is sought to be taken over by appointment of RP. 9. The Adjudicating Authority got overwhelmed by the fact that the right to file reply of the Corpor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shareholders in exchange for meeting the operational and development cost prior to the sale of the project. 14. Both the Financial Creditor - DLIL and Corporate Debtor had a common Chartered Accountant, who in breach of the MoU acted on the dictates of Respondent No.3 - Birendra Kumar Pasari and made certain entries in the balance sheet of the Corporate Debtor, which do not depict the true understanding. Therefore, it is forged and fraudulent, done at the instance of Mr. Birendra Kumar Pasari and cannot be looked into. 15. The letter dated 24.03.2013 is a forged document. It is me to me document i.e. Made by me-to-me document, i.e. made by Birendra Kumar Pasari to serve the interest of Birendra Kumar Pasari. It is also noteworthy that the TDS in the instant case was never deposited by the Corporate Debtor and was actually paid by the Respondent No.1 - DLIL itself. It demonstrates fraud being played by Respondent No.1 and Respondent No.3. 16. The Financial Creditor issued a Demand Notice dated 16.03.2020 to the Financial Creditor recalling the alleged loan. On a bare perusal of the said Notice, it is evident that the Financial Creditor did not mention/ refer about the false loan do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res like ₹ 309/- on 26.04.2013, ₹300/- on 06.05.2013, ₹ 723/- on 05.04.2014 and ₹ 1035/- on 06.05.2014, which is not a usual practice undertaken by a NBFC like the Financial Creditor, which clearly shows that the amount transferred was not a loan and was in furtherance of the Terms and Conditions of Development of the Project. 19. The Financial Creditor has stated that the Corporate Debtor never paid the interest and only deposited the TDS. It is pertinent to mention here that no TDS was paid till the financial year 2015-2016, although the first amount was transferred on 27.08.2012. It is pertinent to mention here that even the TDS amount was deposited by the Financial Creditor itself which is evident from as an amount of ₹ 5,54,122/- has been deposited towards the TDS allegedly by the Corporate Debtor, whereas as per the account s statements of the Financial Creditor the amount of ₹ 5,54,122/- has been deposited to the Indian Bank TDS account by the Financial Creditor, which clearly depicts that even the TDS was deposited by the Financial Creditor. It is evident from where an amount of ₹ 5,69,442/- dated 30.04.2016 was transferred to the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the nature of relationship between the Corporate Debtor and the Financial Creditor. The mere reading of the entries establishes beyond doubt the fact that there was no consideration of the time value and money and the transaction was not in the nature having commercial effect of borrowing and thus clearly not a financial debt. The present case is not the case of any default by the Corporate Debtor towards repayment of dues of Financial Creditor herein. The present case is a case wherein as per common practice in the Real Estate sectors, investors fund projects and the realization with profits against the investments only takes place at the stage wherein the project is sold. Thus, the alleged claim of the Sh. Birendra Kumar Pasari through the Financial Creditor herein is premature as the milestone for seeking return of investment with profit has not been reached as yet. Thus, there is no default and in absence of default proceedings under Section 7 of IBC even otherwise not legally tenable. 25. The above-mentioned facts and circumstances clearly demonstrate the fraud as being played on Sh. Birendra Kumar Pasari thorough the Financial Creditor herein in their attempt to misuse the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rein preferred Appeal against the order dated 17.12.2020 before NCLAT being Company Appeal No. 58/2021. The said appeal was dismissed by NCLAT on 01.02.2021. Appellants [herein] on 16.12.2020 preferred an application u/s 60(5) of Code read with Rule 11 of NCLT Rules being CA No. 1/2020 seeking intervention before Ld. AA. The Adjudicating Authority was pleased to dismiss the intervention application on 02.03.2021 [the said fact is being concealed by Appellants from this Tribunal]. Against the said order of NCLAT, Appellants herein preferred a Civil Appeal No. 638/2021 before Hon ble Apex Court. Apart from taking similar and identical grounds before Hon ble Apex Court the Appellants, had also taken the grounds as mentioned herein below: Hon'ble National Company Law Appellate Tribunal failed to appreciate that the transaction between the Appellant and the Respondent was not a financial debt as per Sec. 5(8) of the IBC, 2016 as there was no consideration for the time value of money. Hon'ble National Company Law Appellate Tribunal failed to appreciate that the purpose of the transaction between the Appellant and the Respondent was not loan but investment. The petition u/s 7 of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsed by Respondent No.1 shall be treated as 'loan' and the same shall be paid out of the sale proceeds of the project. The Appellants also in its pleadings filed before Apex Court admits that the amount disbursed by Respondent No.1 to Corporate Debtor shall be treated as 'loan'. 31. As per Section 5(8) of the Code, financial debt means a debt along with interest, if any, which is disbursed against the consideration for the time value of money. In the present case, the loan was disbursed by Financial Creditor against the consideration for the time value of money and additionally, interest component is also there. The letters cum agreement dated 24.09.2012 and 24.03.2013, which constitute the contract, under which loan was advanced. In any event, the loan, its receipt and the consideration for time value is reflected and admitted in the balance sheets and in 26AS form of the Corporate Debtor. It is an admitted position that Respondent No.1 has advanced loan to Corporate Debtor and the same is repayable on demand. It is an admitted position of Appellants herein before NCLAT in Company Appeal (AT) No. 58/2021 that amount disbursed by Respondent No.1 shall be treated as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in present Appeal has failed to point out any instance of fraudulent or malicious stance of initiating the Insolvency Proceedings by the Financial Creditor. In fact, the material placed, i.e. disbursement details, bank account statement indicating disbursement, ledger statement, audited balance sheet since the financial year 2012-2013 to 2016-2017 and 26AS, on record confirms that Financial Creditor had provided Loan to the Corporate Debtor and the Corporate Debtor acknowledged the same as financial debt and committed default in repayment of the financial debt. 38. Thus, the Financial Creditor /Respondent No.1 is well within its right of the financial creditor to recall its financial debt from the Corporate Debtor. 39. Therefore, in the light of the facts and circumstances no grounds has been made out by the Appellants to set aside the order dated 22.02.2022 passed by Learned Adjudicating Authority. Thus, it prays to dismiss the present Appeal filed by Appellants. Appraisal 40. In this case Section 7 petition under the Code was filed by the Respondent no1 / Financial Creditor - DLIL against the Corporate Debtor - VBL on 19.10.2020 before the Adjudicating Authority. The Corporate D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by virtue of the applications wasn't to defence the case, wherein the right to defend has already stand closed. Hence, the applicant cannot be permitted to do (defend) indirectly what he cannot do directly by virtue of filing such like applications. Moreover, merely that one of members of company is partner in the partnership (one of group) and entered into collaboration with the respondent does not establish that there was collusion. Further, there is contention that meagre accounts are added in the balance sheet, but that does not prove fraud, because of the reason that when the project is developed and then whatever amount is spend whether is meagre one, the same is required to be accounted for. On the basis of the same, the interference could not drawn that entries were absolutely wrongly made in Balance Sheet and those amounts were actually not spend. Hence there is nothing on the record to establish that there was fraud and malicious initiation of section 9 on behalf of the petitioner hearing. Secondly, the applicants in their application have themselves submitted that the Financial Creditor was earlier invested in the project which was then converted into different proje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he applicant clearly comes within the definition of Financial Creditor. The material placed on record further confirms that applicant financial creditor had provided financial facility to the respondent corporate debtor and the respondent acknowledged the same debt in its Balance Sheets and committed default in repayment of the outstanding financial debt. On a bare perusal of Form - I filed under Section 7 of the Code read with Rule 4 of the Rules shows that the form is complete and there is no infirmity in the same. 15. We are satisfied that the present application is complete in all respect and the applicant financial creditor is entitled to claim its outstanding financial debt from the corporate debtor and that there has been default in payment of the financial debt. 16. As a sequel to the above discussion and in terms of Section 7 (5) (a) of the Code, the present application is here admitted. [ emphasis supplied ] 44. The Adjudicating Authority, while passing the admission order dated 22.02.2022 as above against the Corporate Debtor, had also dismissed IA No. 3626 of 2021 filed by Appellant herein u/s 65 of the Code seeking rejection of the Insolvency Petition being CP (IB) No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in appeal before this Appellate Tribunal and thereafter before Hon ble Supreme Court and also when the resolution plan has been approved by the coordinate Bench of this Tribunal, this appeal under Section 61 against the impugned order under Section 7 before this Appellate Tribunal becomes infructuous. We can dismiss the Appeal straightaway, but to put to rest all ongoing litigations, we will briefly look into the merits of the case also. 48. The petition u/s 7 of IBC, 2016 had been filed by Respondent No.1 against Corporate Debtor for default in payment of its financial debts, which fell due on 16.03.2020, when Corporate Debtor despite demand, failed to repay the loan amount along with interest accrued therein. Audited Financial Statement of the Corporate Debtor, duly signed by all its directors including Appellants for the financial year commencing from 2012-2013 up till 2016-2017 are on record, which clearly reflects the loan amount given by Respondent No.1 into the account of Corporate Debtor. In the present case, Financial Creditor had placed material i.e disbursement details, bank account statement indicating disbursement, ledger statement, audited balance sheet of the Corpora ..... X X X X Extracts X X X X X X X X Extracts X X X X
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