TaxTMI 
TaxTMI 
2018 (7) TMI 1263
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..... During the F.Y. 2012-13 the Respondent Company deposited TDS for the interest due to the Applicants but failed to remit the interest amounts after deduction of TDS to the Applicants' accounts. c. During the F.Ys. 2013-14 to 2016-17 the Respondent Company neither paid the interest not deposited the TDS, however, the original loan amounts were reflected in the balance sheets of the Respondent Company. d. Applicant No. 1 as well as Applicant No. 2 wrote demand letters dated 16.11.2016 demanding outstanding loan of Rs. 51,27,532/- and Rs. 50,16,258/-, respectively. The Applicants also sent legal notices dated 26.11.2016 for remittance of the outstanding amounts. However, there was no reply or repayment, according to the Applicants. e. The Applicants sent two separate notices dated 15.09.2017 calling upon the Respondent Company to repay outstanding debts amounting to a sum of Rs. 58,89,342/- to Applicant No. 1 and Rs. 58,13,110/- to Applicant No.2. However, the acceptance of these notices was refused by the Respondent Company. f. In November 2017 the Applicants filed the present application before this Tribunal in which the total amount due from....
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....thus, there is no default in repayment of the said amount. e. It has been further submitted that the purported debt has not crystallized and is a matter of dispute which is pending before three arbitrators. 4. The Applicants in the rejoinder have denied the execution of the settlement agreement which according to paragraph 3 of the settlement agreement was to be executed by 30.09.2015. It is also submitted that the Respondent Company has not addressed the loans extended by Applicant No. 1 Sushant Kumar Aneja and Applicant No. 2 Naresh Kumar Aneja (HUF). It is further submitted that absence of a written agreement prior to extension of credit does not entitle the Respondent Company to escape liability. 5. We have perused the Application and the subsequent responses filed by the Applicants as well as the Respondent and the following issues seem to arise which have to be addressed for adjudication of the present application: I. Whether there exists a financial debt owed by the Respondent Company to the Applicants? II. Whether there has been a default in payment of the financial debt, if any? Issue I 6. The advancement of the amount from the ....
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....t she disbursed the money has been made against 'consideration for the time value of money'. There is nothing on the record to suggest that the Respondents borrowed the money. In absence of such evidence, the Appellant cannot claim that the loan if any given by the Appellant comes within the meaning of 'financial debt' in terms of sub-section (8)(a) of Section 5 of the 'I&B Code'." 9. A close perusal of the order in Dr. B.V.S. Lakshmi (supra) shows that the facts in that case were very different from the facts of the present case insofar as the advancement of the amount is concerned. In Dr. B.V.S. Lakshmi (supra) there appears to be no document to show that the Respondent had actually borrowed the money from the Appellant. Further, the reflection of the amount in the balance sheet as unsecured loan was also doubtful as the amount appeared in the balance sheet for one year and did not appear in the balance sheet for the subsequent years. Even the veracity of the balance sheets was doubted. Further, the Appellate Tribunal also observed that there was nothing to show that the amount had been extended against the time value of money. However, in the present a....
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.... is no written agreement for the extension of the amount from the Applicants to the Respondent Company and there are no terms regarding repayment of the amount to the Applicants the amount had not become due and payable and thus, there is no default. 14. The Applicants have contended that since no date for repayment has been fixed the amount is repayable on demand. The Applicants have also placed on record a judgment of the Hon'ble High Court of Delhi, Virender Kumar Jain v. Alumate (India) (P.) Ltd., RFA No. 153 of 2004, where the Hon'ble High Court has held that where no date is fixed for repayment of loan, it would be a loan repayable on demand. 15. The Applicants sent notices demanding repayment of the amount, however, neither replies to the notices nor any proof of payment has been produced before this Tribunal. Thus, the Tribunal concludes that the loan was due and payable when the repayment was demanded and since there has been no repayment till date there is default in repayment of the financial debt. 16. Taking into consideration all the above, this Tribunal is of the view that a default has been committed in terms of Section 3(12) of the Code of financial....