TaxTMI 
TaxTMI 
2019 (2) TMI 966
X X X X Extracts X X X X
X X X X Extracts X X X X
....spondent corporate debtor is situated at 1072, Kutcha Natwa, Chandni Chowk, New Delhi-110006'. Its authorized share capital is Rs. 5,00,00,000/- and the paid up share capital is Rs. 4,42,22,248/-. Since the registered office of the respondent corporate debtor is in Delhi, this Tribunal being Adjudicating Authority has territorial jurisdiction in respect of respondent corporate debtor as per the provisions of sub-section (1) of Section 60 of the Code. 3. The 'Financial Creditors'-Petitioners have proposed the name of Resolution Professional, Shri Ashish Singh, A-23, Baghbam Apartments, Sector-28, Rohini-110042. He has registration No. IBBI/IPA-002/IP-N00416/2017-18/11230. A written communication sent by him and filed vide diary No. 1856 dated 04.04.2018 in terms of Rule 9(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 has also been placed on record. There is a declaration made by him that no disciplinary proceedings are pending against him in Insolvency and Bankruptcy Board of India or Indian Institute of Insolvency Professionals of ICSI. In addition, further necessary disclosures have been made by Mr. Ashish Singh, as per the requirement ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.......................... (g) It is clarified that all liabilities of KKK till the date of 100% take over of KKK by SRS or till 31.03.2018 (which ever is later) including on account of Labour Laws, Sales Tax, Provident Fund, Employees State Insurance, Electricity Department, penalties & fines, Court Orders/Decrees, business transactions of KKK, any other dues of Government or Municipal Corporation or of any other person, shall be borne exclusively by the existing shareholders of KKK, who amongst themselves shall be jointly, severally and unlimitedly liable for the same. h) SRS shall withheld from the consideration payable to existing shareholders the amount equal to maximum limit of amount, which may be claimed by any person or authority or department against KKK, even in the cases where such claims are disputed by KKK or its shareholders and such disputes have not been finally adjudicated by the competent authorities or a sum of Rs. 1,00,00,000/- (Rupees One Crore only), whichever is more. After settling of all liabilities of KKK or complete development & marketing of proposed I.T. Unit/Park on said land, SRS shall pay such amounts to the concerned existing sharehol....
X X X X Extracts X X X X
X X X X Extracts X X X X
....concerned members of Third Party (Mr. Krishan Kumar Kohli and the erstwhile shareholders of KKK), on the aforesaid deposits with effect from 01.04.2008 till the date of refund. 5. Third Party (Mr. Krishan Kumar Kohli and the erstwhile shareholders of KKK), shall at its own risks, costs and consequences, expeditiously contest, clear & pay all the liabilities along with penalties and interests applicable thereon. For this purpose the Second Party has vide resolution dated 26.04.2008 authorized Sh. K.K. Kohli to initiate/contest all proceedings for contesting the said liabilities on behalf of Second Party and take all such steps, as may be necessary. 6. Soon after the particular liability of Second Party (SRS I-Tech) is cleared/paid/got discharged by the Third Party (Mr. Krishan Kumar Kohli and the erstwhile shareholders of KKK), an amount proportionate thereto shall be refunded by the Fourth Party (SRS Aviations) to the Third Party (Mr. Krishan Kumar Kohli and the erstwhile shareholders of KKK). First, Second and Fourth Parties shall be jointly and severally liable to refund the aforesaid deposits in proportion to the liabilities cleared/paid by the Third Party Appr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....malgamated with Akriti Realtech Limited w.e.f. 10.12.2012 and the deposits were transferred to in it. Again, name of Akriti Realtech Limited was altered to Akriti Global Traders Ltd. On 19.07.2013 SRS I-Tech Pvt. Ltd. undergone a further change whereby its name was altered to SRS Automotive Components Pvt. Ltd. (SRSACPL). 9. All the aforesaid companies were controlled by the aforesaid three guarantors namely Mr. Nanak Chand Tayal, Mr. Anil Jindal and Mr. Rajesh Singla. 10. On 22.02.2012, SRS I-Tech Pvt. Ltd. paid an amount of Rs. 60,00,000/- towards the income tax liability, which had to be discharged by erstwhile shareholder of KKK and due to this count the deposit amount was reduced to Rs. 1,85,00,000/- 11. On 11.12.2013, SRSRIL, SRSACPL, the aforesaid guarantors and Akriti Global Traders Ltd. transferred the deposit amount to Vision Jewellers Pvt. Ltd. Vision Jewellers Pvt. Ltd. was also controlled by the aforesaid guarantors and was a group company of SRSRIL, SRSACPL. The said deposit remained with the said company till 31.03.2015. 12. Thereafter SRSRIL, SRSACPL, the aforesaid guarantors and Akriti Global Traders Ltd. transferred an amount of Rs. 100 lacs to Mr. K.K....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Jewellers Private Limited and Logical Jewellers Private Limited. Please be noted that you had agreed to clear your liabilities within a period of 2-3 years and maximum in 5 years of the agreement. However, you have been indulging in willful defaults only with the mala fide intention to cheat and defraud the company. In fact, despite our repeated requests and lapse of about 9 years, it appears that you are deliberately avoiding clearing the aforesaid liabilities despite being fully aware that interest and penalty is accruing day by day and further the statutory authorities are exerting pressure upon us to clear the liabilities. In fact, interests and penalties are accruing on said liabilities and the same are increasing day by day. In these circumstances, please note that Trustworthy Gems & Jewellers Private Limited and Logical Jewellers Private Limited are not liable to pay you amount till you clear of liabilities of K.K. Kohli & Brothers Private Limited (now known as SRS Automotive Components Pvt. Ltd.) for period upto 31.03.2008 and submit proof thereof to us. We shall settle accounts with you upon your clearing said liabilities." 16. A chart relatin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e petitioner we ordered for listing the matter on 16.10.2018. On 16.10.2018 we heard the arguments and reserved the order. 19. During the course of hearing we raised a specific query as to whether the petitioner would be covered by the definition of expression 'financial creditor' as per the provisions of Sections 5(7) & (8) of the Code. 20. In order to reach a correct conclusion, it would be pertinent to note the definition of expression 'financial creditor' as provided by Section 5(7) of the Code which means any person to whom a financial debt is owed and includes a person to whom such financial debt has been legally assigned or transferred. The expression 'financial debt' has been defined in Section 5(8) of the Code to mean a debt alongwith interest, if any, which is disbursed against the consideration for the time value of money and includes a number of other transactions which are as under:- "(a) money borrowed against the payment of interest; (b) any amount raised by acceptance under any acceptance credit facility or its dematerialised equivalent; (c) any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debent....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion 'includes' and has then set out various illustrations of financial transactions. Accordingly, the definition must be read in its contemporaneous meaning to cover all such, financial transactions as providers of finance commonly enter into. It appears that the petitioner fulfils the first ingredient of Section 5 (8) of the Code. 21. However, it has to answer the other requirements. In the present case it is evident from the perusal of reply to the notice sent by the Corporate Debtor to the Financial Creditor that as per agreements and addendums executed between them, a sum of Rs. 1,85,00,000/- (Rupees One Crore Eighty Five Lakh Only) belonging to the petitioners has been deposited with Trustworthy Gems & Jewellers Private Limited and Logical Jewellers Private Limited towards security of liabilities of K.K. Kohli & Brothers Private Limited (now known as SRS Automotive Components Pvt. Ltd.) for period upto 31.03.2008. It is also asserted by the Corporate Debtor that they have been fulfilling their part of obligation by payment of interest on the aforesaid amount through Trustworthy Gems & Jewellers Private Limited and Logical Jewellers Private Limited. However, the petitioners ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d to point out that the default has not occurred and that the debt is not due or a debt may not be due if it is not payable in law or in fact. It is in this regard that stipulation in the agreement dated 14.05.2008 in clauses 4 & 5 read with supplementary MOU dated 31.07.2010 have been referred by the Corporate Debtor in its reply to the notice and it has been pointed out that the Financial Creditor has failed to discharge its own obligations and the amount would not be due and payable till they discharge their own obligation. It is pertinent to mention that the Corporate Debtor has conceded the agreements and addendums but has gone to say that it has been paying interest and the Financial Creditor was to clear its liabilities within a maximum period of five years and are deliberately avoiding to perform their part of obligation despite being fully aware that interest and penalty is accruing day-by-day. It is in these circumstances that the Corporate Debtor has stated in categorical terms that 'they are not liable to pay to the Financial Creditor any amount till it clears the liabilities of K.K. Kohli & Brothers Private Limited (now known as SRS Automotive Components Pvt. Ltd.) for....