TaxTMI 
TaxTMI 
2018 (12) TMI 417
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....imited' (hereinafter as 3rd Financial Creditor) and 'M/s. Narbada Valley Chemical Industries Private Limited' (hereinafter as 4th Financial Creditor) (Collectively as Financial Creditors) have jointly furnished Form No. 1 under Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (hereinafter as Rules) in the capacity of "Financial Creditor" on 26.07.2017 by invoking the provisions of Section 7 of the Insolvency and Bankruptcy Code (hereinafter as Code). The Debtor has filed a Miscellaneous Application no. 367/2017 praying for the dismissal of the Petition. The MA has been treated as 'Reply' from the side of Debtor. 2. Further under the head "Particulars of Corporate Debtor" the description of the debtor is stated as 'M/s. M L Mansukhani & Co. Private Limited' (hereinafter as Debtor) having Registered office at, 69, Princess Street, Mumbai, Maharashtra - 400002. 3. In the requisite Form, under the head "Particulars of Financial Debt" the total amount of Debt in default is stated as Rs. 1,18,24,017/- which includes the Principal amount of Rs. 61,70,000/- plus Interest @ 18 % p.a. amounting to Rs. 56,54,017/- as on 01.04.2017. The date of ....
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....the Hon'ble Bombay High Court in Civil Suit no. 227/2017. 4.8. It is case of the Financial Creditors that the Debtor is falsely questioning the Debt amount, rather the Debtor is in financial crunches and therefore the Debtor is unable to make any payment to the Financial Creditors. Hence, the Financial Creditors, jointly, have filed this Petition, invoking the provisions of S. 7 of the Code, for the commencement of the CIRP over the Debtor. 5. Submissions by the Financial Creditor : 5.1. The Learned Representative for the Financial Creditors has submitted that the 1st Financial Creditor has disbursed the amount as mentioned below : Sr. No. Amount Disbursed Date Cheque No./Ref. No. 1. Rs. 10,00,000/- 31.12.2011 000025 2. Rs. 5,00,000/- 31.01.2012 000033 3. Rs. 10,00,000/- 03.04.2012 000044 4. Rs. 5,00,000/- 05.07.2012 000003119026 5. Rs. 2,00,000/- 24.03.2014 000013423308 6. Rs. 5,00,000/- 19.05.2014 000014626366 7. Rs. 5,00,000/- 19.05.2014 000014627607 8. Rs. 5,00,000/- 19.05.2014 000014633378 9. Rs. 5,00,000/- 19.05.2014 000093 Total Rs. 52,00,....
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....any amount to the 4th Financial Creditor. 5.8. It is further submitted that the Debtor has issued a TDS Certificates i.e. Form - 26AS for the TDS deducted U/s. 194A of the Income Tax Act which is TDS for the payment of Interest, to the 1st, 2nd and 3rd Financial Creditors. Copies of the TDS Certificates are annexed with the Petition. Hence, pleaded that deduction of TDS is an acknowledgement of Loan on Interest. 5.9. The Learned Representative for the Financial Creditors has drawn the attention of this Bench towards the Annual Report of the Debtor for the F.Y. 2016-17 wherein the Debtor has acknowledged the Principal amount claimed by the Financial Creditors under the head of 'Long Term Borrowings'. The copy of the Annual Report for the F.Y. 2016-17 of the Debtor is also placed on record. 5.10. In light of above submissions the Learned Representative for the Financial Creditors has vehemently argued that, since, the Debtor has paid the interest to the 1st to 3rd Financial Creditors, which is evident from the TDS Certificates, the claimed amount clearly falls under the definition of Financial Debt. The Debtor, both, in reply to Legal notice and in reply to this Petition has....
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....d that the Hon'ble High Court of Bombay is now bound to adjudicate the issue whether the Debt got discharged or Debt continues and therefore this Bench does not have Jurisdiction to entertain this Petition. 6.7. The Learned Advocate has vehemently pleaded that the Financial Creditors cannot aprobate and reprobate on the same time. It is stated that the Financial Creditors on one hand claiming for the Shares as well as on other hand claiming the outstanding amount. Hence, in light of these submissions, as there is serious dispute involved regards to the claimed amount, this Petition does not survives and therefore deserves to be dismissed. 7. Findings : 7.1. The Bench has gone through the submissions made by both the sides and also has also gone through the pleadings on record. It is noticed that the Learned Advocate for the Debtor has vehemently challenged the Jurisdiction of this Bench in light of the pending Civil Suit before the Hon'ble Bombay High Court. This objection has no force due to the basic reason that the issues raised in that litigation do not relate to the debt in question; which was otherwise an admitted Financial Liability. 7.2. It is also noticed that,....
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....at the Learned Advocate for the Debtor has failed to establish this stand, as there is nothing on record which proves that the Shares has been transferred in the names of the Directors of the Financial Creditors. 7.8. It is also noticed that the Civil Suit is still to be adjudicated hence, the Fraud, as upon the Debtor committed by the Directors of Financial Creditors, is not yet established. The question of fraud is still sub-judice before the Hon'ble Bombay High Court. 7.9. In light of this observation a conclusion can be drawn that, since, neither the fraud is yet established nor there is evidence for the transfer of shares in names of the Directors of the Financial Creditors, the amount claimed in this Petition still survives and therefore not discharged. Hence, to answer the above framed second question it can be stated that 'the amount claimed is not discharged yet'. 7.10. The Bench has also gone through the Ledger Account of the Debtor in the Books of the Financial Creditors and noticed that the Financial Creditors have advanced the amount as stated in their submissions. Rather there is no dispute with regard to amount advanced / disbursed. 7.11. It is also notic....
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....lete in procedural formalities then also the Adjudicating Authority can dismiss the Petition. However, by going through the Petition it is noticed that the Petition under consideration is complete in its all procedural aspects. 7.16. Further, it is worth to place a reliance on the judgement, as cited by the Learned Representative of the Financial Creditors, given by the Hon'ble Supreme Court in the case of 'Innovative Industries v. ICICI Bank' dated 31.08.2017. The relevant portion is worth to be reproduced as follows : "...... 30. On the other hand, as we have seen, in the case of a corporate debtor who commits a default of a financial debt, the adjudicating authority has merely to see the records of the information utility or other evidence produced by the financial creditor to satisfy itself that a default has occurred. It is of no matter that the debt is disputed so long as the debt is "due" i.e. payable unless interdicted by some law or has not yet become due in the sense that it is payable at some future date. It is only when this is proved to the satisfaction of the adjudicating authority that the adjudicating authority may reject an application and not ....