TaxTMI 
TaxTMI 
2019 (9) TMI 796
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....he Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, declare moratorium and appoint Interim Resolution Professional (IRP). 2. Heard the Learned Sr. Counsels for the Financial Creditor, Corporate Debtor and perused the pleadings including the documents placed on file. 3. The Financial Creditor has claimed an amount of Rs. 2,13,61,067/- as outstanding against the Corporate Debtor as on 05.09.2014. 4. The brief facts of the case are that Financial Creditor viz., M/s. Val-Met Engineering Pvt. Ltd., is engaged in the business of Aerospace material trading and manufacturing of components for the Aerospace industry. The Corporate Debtor viz., Trusted Aerospace Engineering Private Limited (TASE) is engaged in the business of design, development, manufacture and service of precision components to aerospace and defence industry primarily for exports to customers across US, Europe and UK and has its manufacturing unit at Sriperumbathur in Chennai, India. 5. The Corporate Debtor has been incurring losses since the inception and defaulted in payment of the loan to SBI and other creditors including vendors. The Corporate Debtor has initiated various steps t....
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....ped set of document filed by the Corporate Debtor along with the Reply which contains the pleadings (Motion to Dismiss) filed before the US Court by the Corporate Debtor's US subsidiary wherein it was admitted that the monthly capital allegedly provided by the Financial Creditor was either a loan or extension of credit. 11. The Corporate Debtor has filed Reply raising various objections. The 1st objection that has been raised by the Corporate Debtor is that there is no debt. It is stated that the object of the MoU was to handover the management to the Financial Creditor, who could invest money and carry on the business of the Corporate Debtor. The terms and conditions contained in the MoU contemplate entering into definitive agreements. It also postulates that on the performance of the contract it would stand terminated. It is stated that there is nothing to suggest from a reading of the MoU that a loan was borrowed by the Corporate Debtor, and Corporate Debtor did not purchase any goods or services from the Applicant. It is contended that Corporate Debtor itself was to be sold to the Financial Creditor, and sale was to be achieved by a merger. The Financial Creditor had exp....
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....ndence filed along with the Application as Annexure 4 ended with 01.09.2014. On the day when the Application was filed i.e. 22.06.2018, it was clearly barred by limitation. Therefore, the Corporate Debtor has prayed to dismissed the instant Application and thus render justice. 14. From the pleadings of the parties, the issues that can be framed are as follows :- i. Whether the unpaid amount claimed by the Applicant/Financial Creditor from the Corporate Debtor falls within the definition of the "Financial Debt", if yes; ii. Whether the "Financial Debt" is time barred? 15. In relation to first issue, it has been submitted by the Learned Sr. Counsel for the Applicant/Financial Creditor that in terms of the Memorandum of Understanding (MoU) dated 20.08.2013, several payments were made to the Corporate Debtor from time to time for the Working Capital, salary of the employees and statutory dues etc. In support of the submissions, the Learned Sr. Counsel for the Applicant/Financial Creditor has referred to the Clauses 13 & 14 of the MoU under reference, he has also referred to an averment contained in the pleadings made before the Foreign Court wherein ....
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....ties and paid other expenses. However, the corporate debtor did not perform its obligation i.e., to proceed to negotiate the terms of definitive agreement, as was envisaged for implementation of the provisions the MoU. Therefore, money infused by the applicant/financial creditor into the corporate debtor is being demanded back by the applicant, which the corporate debtor failed to pay. The money brought by the applicant/financial creditor into the corporate debtor was part of a purchase agreement i.e., for the purchase of the corporate debtor including its subsidiary in terms of the MoU, which did not happen. Thus, the amount raised falls within the purview of "any other transaction/purchase agreement, having the commercial effect of borrowing" which certainly carries the element of time value for money. Therefore, the debt claimed by the Applicant/Financial Creditor falls within the purview of the provisions of Section 5(8)(f) of the Code, 2016. For the sake of convenience Clause (f) of Sub-Section (8) of Section 5 of the Code, 2016, is extracted below:- "Section 5 :(1)...... (2)...................... ......................... (8) "financial deb....
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....tor on 13.01.2016, by which the Corporate Debtor again assured the Applicant/Financial Creditor that it will start paying every month from the month of January, 2016 and clear the outstanding in ten months, wherein it has clearly been mentioned that the Corporate Debtor owes money and it will pay to the Applicant/Financial Creditor. These WhatsApp messages are placed on the file by the Applicant/Financial Creditor along with Rejoinder. 21. On perusal of the WhatsApp messages, it appears that the Applicant/Financial Creditor has continuously been following the Corporate Debtor, who has been giving assurances only, but no payments have been made. Now, the question arises as to whether the WhatsApp messages exchanged between the parties amount to the acknowledgement of debt and such communications are admissible in evidence. In this connection a reference may be made to the Order passed by Hon'ble NCLAT in [Company Appeal (AT) (Insolvency) No. 143 of 2019, dated 1-3-2019] titled Bhandari Hosiery Exports Ltd. v. In-Time Garments (P.) Ltd. wherein the WhatsApp messages were taken into consideration for ascertaining a dispute between the parties, which were made prior to the is....
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....e notice under Section 8 of I&B Code, 2016 was issued inadvertently, which does not operate as an estoppel against the Applicant/Financial Creditor. The Learned Senior Counsel for the Applicant/Financial Creditor has also clarified during the course of arguments that the Corporate Debtor and its subsidiary hosted in USA are jointly and severally liable for the payment of outstanding debt and he is entitled to seek remedy against each party independently provided that he does not indulge in any double recovery. The submissions made by the counsel of the Applicant/Financial Creditor appear to be plausible. Therefore, the objections raised by the counsel for the corporate debtor stand rejected. 24. In view of the position stated above, the evidence placed on record is sufficient to ascertain the default on the part of the Corporate Debtor, which the Corporate Debtor could not rebut. The Financial Creditor has fulfilled all the requirements of law including the name proposed for appointment of IRP after obtaining consent in Form-2. Therefore, the Application stands admitted. The commencement of the Corporate Insolvency Resolution Process is ordered which ordinarily shall get complet....