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Issues: (i) Whether a duly authorised power agent could represent and argue for the applicant before the Tribunal; (ii) whether the applicant's failure to file income-tax returns defeated the loan claim; (iii) whether alleged non-compliance with the RBI Master Direction on foreign borrowing and lending in rupees invalidated the cash loan transactions; (iv) whether the claim supported by the acknowledgment letter, promissory note and cheque was admissible despite absence of corresponding entries in the corporate debtor's books of account.
Issue (i): Whether a duly authorised power agent could represent and argue for the applicant before the Tribunal?
Analysis: The Tribunal read the NCLT procedural rules together with the statutory provision enabling a party to authorise another person to present the case, and also referred to the limited power of a court or tribunal to permit appearance by a non-advocate in a particular case. It held that there was no bar to a duly authorised person arguing for the applicant.
Conclusion: The issue was decided in favour of the applicant.
Issue (ii): Whether the applicant's failure to file income-tax returns defeated the loan claim?
Analysis: The Tribunal held that the absence of income-tax returns was not conclusive where the claim was otherwise supported by documentary material, including the acknowledgment letter, promissory note, cheque and cash book. It further held that the debtor could not avoid repayment merely by questioning the lender's tax disclosures after having received the loan.
Conclusion: The issue was decided in favour of the applicant.
Issue (iii): Whether alleged non-compliance with the RBI Master Direction on foreign borrowing and lending in rupees invalidated the cash loan transactions?
Analysis: The Tribunal found that the transactions were reflected in the applicant's cash book and were acknowledged by the corporate debtor, but there was no evidence that the money was brought from abroad. It held that the cited foreign exchange framework was not violated on the facts, and in any event a regulatory breach would not make the underlying transaction void in the manner suggested.
Conclusion: The issue was decided in favour of the applicant.
Issue (iv): Whether the claim supported by the acknowledgment letter, promissory note and cheque was admissible despite absence of corresponding entries in the corporate debtor's books of account?
Analysis: The Tribunal held that lack of entries in the corporate debtor's books could not by itself discredit the claim when the applicant produced the acknowledgment letter, promissory note, cheque, cash book and related material. It relied on the statutory presumption attached to a signed cheque and found that the debtor failed to rebut the presumption or explain the documents convincingly.
Conclusion: The issue was decided in favour of the applicant.
Final Conclusion: The applicant's claim was held to be proved and admissible, the rejection orders were set aside, and the applicant was directed to be treated as an unsecured financial creditor for appropriate provision under the resolution process.
Ratio Decidendi: A loan claim supported by acknowledged debt documents and a signed cheque cannot be rejected merely for want of entries in the debtor's books or for absence of the lender's tax return, and a duly authorised representative may appear before the Tribunal when authorised in writing.
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