TaxTMI 
TaxTMI 
2019 (4) TMI 1356
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....nd hence filed this application. 2. The averments in brief, for consideration of the application are the following: Shri Om Prakash Murarka, allegedly a financial creditor contends that the respondent/corporate debtor is known to him through its directors and in usual course of business of the respondent/corporate debtor company, the directors approached the petitioner/ financial creditor for temporary financial assistance by way of loan promising to repay the same within a period of six months together with interest @15% per annum and believing bona fide and on good faith of such promise made by the directors of the respondent/ corporate debtor company, the petitioner/financial creditor paid Rs. 35,00,000.00 (Rupees Thirty-rive Lac) only on 01-11-2016. The director who was in receipt of the amount, acknowledged the receipt of the money and issued undated cheque towards repayment of the loan amount. The respondent/corporate debtor had failed to make repayment and on demand made for repayment, the respondent/corporate debtor asked the petitioner/financial creditor to encash cheque given to them by filling the dates in the cheque and as instructed put the date as 30-10-2017 and....
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....t or by way of cheque. Transaction of money exceeding a sum of Rs. 20,000.00 (Rupees Twenty thousand) only except by account payee cheque is prohibited under Section 269 SS of the Income Tax Act. The transaction alleged in the application is forbidden in law and as such unenforceable there being no valid debt in the eye of law. As per the books of account of the respondent/corporate debtor a sum of Rs. 50,00,000.00 (Rupees Fifty Lac) only was disbursed on 09-04-2012 through RTG S and out of which a sum of Rs. 15,00,000.00 (Rupees Fifteen Lac) only was repaid on 08-03-2013 in the financial year 2012-2013 and other than that no loan was credited to the account of the respondent/corporate debtor company either on 01-04-2016 or on 01-11-2016 and as such the letter dated 01-11-2016 and the respective cheque issued by Mr. Sandeep Kumar Bhagat is not binding upon the company. Mr. Sandeep Kumar Bhagat has no independent power to borrow money as the power to borrow money is vested with the Board of Directors. Acknowledgment of debt if any after the period of limitation is bad in law. 5. The petitioner/financial creditor is not a financial creditor and the debt claimed by the petitioner/f....
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....alance amount payable remained at Rs. 35,00,000.00 (Rupees Thirty-Five Lac) only as reflected therein but the corporate debtor had not submitted its ledger account for the subsequent period with mala fide intention to misrepresent the facts and on this count alone the reply affidavit filed by the respondent/corporate debtor is liable to be summarily rejected. 8. The Interim Resolution Professional proposed by the petitioner / financial creditor has not been disqualified and, therefore, proposal of the name of the Interim Resolution Professional in some other cases also is not a bar in appointing him as Interim Resolution Professional in this case. The loan amount clearly falls within the definition of financial debt as defined under section 5(8) of the I & B Code. The respondent/corporate debtor failed to raise any dispute alleging as alleged even after receipt of the notice dated 20-11-2017 issued by the advocate of the petitioner/financial creditor demanding payment of its dishonoured cheque as per the provision of the Negotiable Instruments Act. Shri Sandeep Kumar Bhagat is one of the promoters of the respondent/corporate debtor and he had all along been managing its affairs ....
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.... in proving that a financial debt as defined under section 5(8) of the Code is due, he can maintain an application of this nature. Section 5(8) of the Code defines financial debt, which reads as follows: - "Section: 5(8) (8) "financial debt" means a debt along with interest, if any, which is disbursed against the consideration for the time value of money and includes- (a) money borrowed against the payment of interest; (b) any amount raised by acceptance under any acceptance credit facility or its dematerialized equivalent; (c) any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument; (d) the amount of any liability in respect of any lease or hire purchase contract which is deemed as a finance or capital lease under the Indian Accounting Standards or such other accounting standards as maybe prescribed; (e) receivables sold or discounted other than any receivables sold on non-recourse basis; (f) any amount raised under any other transaction, including any forward sale or purchase agreement, having the commercial effect of a borrowing;....
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....ct, 2013 submits that to borrow money by the respondent/corporate debtor, the Board of Directors of the company can only exercise its power to borrow by means of a resolution passed at the meeting of the Board. According to him the Annexure A does not bear the seal of the Director and the CD Company and it refers nothing about any resolution authorizing him to receive the money or acknowledging the liability. I find some force in the argument advanced on the side of the CD. In the absence of supporting receipt evidencing borrowing money by the CD the letter of acknowledgment Annexure A cannot be relied upon as a proof of acknowledgment of debt for an amount allegedly borrowed by the CD, especially when the Annexure A does not bear the seal of the CD, seal of the Director and not supported with any resolution of the Board of Directors of the CD. Annexure A is a copy of a typewritten letter in the letterhead of the respondent/corporate debtor company. Having no seal of the company, it cannot be taken as a proof to prove that the respondent/corporate debtor company received the money as referred to in the letter. So the FC has failed in proving that the CD has borrowed the money with ....
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.... law of limitation and therefore Annexure A even if it is construed as a letter of acknowledgment issued by the CD it would not save the period of limitation since it was purportedly executed on 01.11.2016 after a period of 3 years from 08.03.2013 which is the last payment from the CD. The above said contention of the respondent/corporate debtor is supported by the ledger account copy marked as Document No.1 in the reply affidavit. This ledger account has not been objected on the side of the petitioner. On the other hand, in the rejoinder filed by the petitioner/financial creditor it admits the genuineness of the ledger account submitted by the respondent/corporate debtor. At paragraph 6 of the rejoinder, the petitioner/financial creditor has submitted as follows: "Furthermore, on perusal of the ledger account as submitted by corporate debtor itself, it is clearly established that it had taken loan amount as shown therein and it had made the part payment on 08.03.2013 to financial creditor and the balance amount payable remained at Rs. 35,00,000/- as reflected therein, but, the corporate debtor had not submitted its ledger account for the subsequent periods with mala fide ....
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....ep Kumar Bhagat had given a cheque for repayment of Rs. 35,00,000.00 (Rupees Thirty-Five Lac) and copy of the said cheque is produced at page 9 of the application. Admittedly, it is a cheque issued by Mr. Sandeep Kumar Bhagat in the name of the petitioner/financial creditor. It is signed by him as authorized signatory, but it does not refer as a cheque issued for repayment of the amount mentioned in the Annexure-A,because it only refers to Rs. 35,00,000.00 (Rupees Thirty-Five Lac) which does not include interest as per Annexure-A.The date of the cheque is 30-10-2017. That date was admittedly put by the FC. According to the ld. Counsel for the FC, as per an arrangement between the CD and the FC the FC can put the date and can present the cheque for clearance in the Bank. No document to support the above said submission is available in the case record. On the other hand that submission was strongly opposed by the CD. Therefore, putting date in a cheque suitable to the FC for saving the period of limitation cannot be legally recognized in a case of this nature. Even according to the FC the cheque was given to the FC along with the Annexure A on 01.11.2016 and it was issued without put....