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of <h1>Tribunal validates debt, rejects NBFC claim, admits petition under Section 7 IBC.</h1> <h3>Simplex Infrastructures Limited Versus Mahendra Investment Advisors Private Ltd.</h3> The Tribunal found that the debt and default were proved based on the respondent's acknowledgment of the debt through balance confirmations. The petition ... Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - respondent/Corporate Debtor is NBFC or not? - RBI was under apprehension that the respondent was accepting deposits from public - existence of debt and default - applicability of Article 137 of the Limitation Act, 1963 or section 238A of Limitation Act, 1963. Whether the debt and default are proved or not - HELD THAT:- The petitioner/Financial Creditor has granted a debt or Inter-Corporate Deposit of ₹ 5,00,00,000/-, on 04.11.2011, as claimed by the petitioner. Whereas, according to the respondent/Corporate Debtor, the said amount was Inter-Corporate Deposit for a period of three months deposited towards Performance Bank Guarantee under the impugned contract. The Corporate Debtor also claimed that the said amount of ₹ 5 crores provided as security. Hence transaction dated 04.07.2011 even though termed as 'Inter Corporate Deposit', the same is taken as security furnished by the applicant for execution of the contract dated 12.04.2010 - certification by the respondent/Corporate Debtor can be considered as an admission of debt. Whether the present petition is hit by Article 137 of the Limitation Act, 1963 or section 238A of Limitation Act, 1963? - HELD THAT:- The alleged defaults had occurred between 01.04.2013 and 01.04.2016. Whereas the present petition is filed on 07.05.2019. If limitation period is reckoned between the date of latest default and the date of filing the present petition, there cannot be any delay. Whether the respondent/Corporate Debtor is NBFC? - HELD THAT:- This Adjudicating Authority has noticed in M/S SEW INFRASTRUCTURE LIMITED VERSUS M/S MAHENDRA INVESTMENT [2019 (10) TMI 1434 - NATIONAL COMPANY LAW TRIBUNAL, HYDERABAD BENCH] that the respondent/Corporate Debtor is not NBFC. The respondent has failed to provide any proof of registration as NBFC from the regulator, i.e. Reserve Bank of India. As such, we cannot rely on a mere statement made by the respondent in this regard. The Financial Creditor is able to establish the debt and default. Therefore, the petition is required to be admitted against the Corporate Debtor. After going through the documents filed by the petitioner,t the petition is liable to be admitted against the Corporate Debtor. Petition admitted. Issues Involved:1. Whether debt and default are proved.2. Whether the present petition is barred by Article 137 of the Limitation Act, 1963 or section 238A of the Limitation Act, 1963.3. Whether the respondent/Corporate Debtor is a Non-Banking Financial Company (NBFC).Issue-wise Detailed Analysis:1. Whether debt and default are proved:The petitioner, a financial creditor, granted an Inter-Corporate Deposit of Rs. 5,00,00,000/- on 04.11.2011. The respondent claimed this amount was a security deposit towards Performance Bank Guarantee under a contract. However, the respondent acknowledged the debt through balance confirmations dated 01.04.2013, 01.04.2014, 01.04.2015, and 01.04.2016, which stated, 'I/We confirm and certify that the above statement of A/c received from you is true and correct.' This certification was considered an admission of debt. Therefore, the Tribunal found that the debt and default were established.2. Whether the present petition is barred by Article 137 of the Limitation Act, 1963 or section 238A of the Limitation Act, 1963:Article 137 of the Limitation Act, 1963 provides a three-year limitation period. Section 238A of the I & B Code applies the Limitation Act to proceedings before the Tribunal. The petitioner argued that the Company Petition could be filed within three years from the date of the cause of action. The alleged defaults occurred between 01.04.2013 and 01.04.2016, and the petition was filed on 07.05.2019. Considering the latest default date, the Tribunal concluded that there was no delay, and the petition was not barred by limitation.3. Whether the respondent/Corporate Debtor is a Non-Banking Financial Company (NBFC):The respondent claimed to be an NBFC and thus not amenable to the provisions of the I & B Code. However, the Tribunal noted that the respondent failed to provide any proof of registration as an NBFC from the Reserve Bank of India. The Tribunal referred to a previous order dated 24.10.2019 in CP (IB) No. 193/7/HDB/2019, which stated that the respondent was not an NBFC. Consequently, the Tribunal did not accept the respondent's claim of being an NBFC.Conclusion:The Tribunal admitted the petition under Section 7 of the IBC, 2016. It declared a moratorium for the purposes referred to in Section 14 of the Code, prohibiting the institution or continuation of suits or proceedings against the Corporate Debtor, transferring or disposing of assets, and recovering property. The Tribunal appointed an Interim Resolution Professional (IRP) and directed the public announcement of the initiation of the Corporate Insolvency Resolution Process (CIRP). The Registry was instructed to mark appropriate remarks against the Corporate Debtor on the Ministry of Corporate Affairs website.
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