TaxTMI 
TaxTMI 
2019 (9) TMI 1190
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....onate and illegal credit transactions entered into by Respondent Nos. 3-11 b) Pass appropriate directions to the Resolution Professional of Respondent No.1 (Corporate Debtor) to remove the names of the Respondent Nos. 3-11 from the List of Financial Creditors. c) Pass a consequential declaration that the Committee of Creditors Meetings on 13.06.2018, 29.08.2018, 12.09.2018 and 29.09.2018 and the resolutions therein are non-est null and void. 3. The Respondents herein are as follows: RP is Respondent no. 2 and Respondents No.3 to 11 are : M/s Sungil India Pvt Ltd., Anamika Singh, Anand Dubey HUF, Madhulika Chahal, Dushyant Rana, Pervinder Yadav, Shri Bhagwan, Ankit Yadav, Rajendra Singh and Pankaj Pahuja, private persons who claim to have given unsecured loans to Corporate Debtor during the year 2016-2017, each respectively lending different amounts which is termed as 'Deposit' under the Companies Act, 2013 by RP. The reply of Respondent No. 3-11 also filed and claim that said money was advanced in form of loan with Corporate Debtor. 4. The applicant claims that the transactions between the Corporate Debtor and Respondents no.3-11 of lending/advancing mone....
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....mitted during CoC meeting and accordingly, CoC was re-constituted. 9. It is further argued by Resolution Professional that the Applicant has never questioned the admission of the claims of Respondent Nos. 3 to 11 until the 5th CoC meeting, therefore the entire process of the Applicant is only an afterthought and is directed towards some vested motive. Further, the conduct of the Applicant can be seen from his stand in CoC wherein he has opposed each and every agenda item of the essential nature including charges for engaging Security Guards for protection of assets and also other charges as Publication Cost of Expression of Interest, Appointment of Forensic Auditor, Evoting costs, Appointment of valuers for the asset valuation of Corporate Debtor etc. and all were opposed by the Applicant on unprincipled and baseless reasons. 10. It is further argued by Respondents that Section 76A deals with the alleged non- compliance of Section 73 and provides for refund of money to be made. Thus, even if funds are accepted in contravention of Section 73 of the Act, the same should be refunded back as a natural corollary. Further provisions of Section 73& 76 are merely directory and not ma....
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.... period and as such. 15. Further it is strongly denied that the Respondents nos. 3-11 had been inducted as financial creditors illegally. The fact remains that the answering respondent is a financial creditor and the same could be gauged by a bare perusal of the documents submitted by the answering respondent with the RP as well as the confirmation of said claims reflected in the Forensic audit of Corporate Debtor. 16. It is an admitted fact that the Respondent no.3 to Respondent no. 11 have claimed certain amounts on the basis of the loan of amount extended to the Corporate Debtor during the period 2016-2017 and as per the report certifying the Reconstitution of the Committee of Creditors of Corporate Debtor, Respondent no. 2, Resolution Professional has admitted such amounts in following manner: S. No. Name of the Financial Creditors Amount Claimed by the Financial Creditors (Amount in Rs.) Amount Admitted (Amount in Rs.) % of Voting Rights 1. Shinhan Bank (Applicant) 33,45,753 33,45,753 14.96% 2. Anamika Singh (Resp. No.3) 1,36,12,500/- 75,00,000/- 33.55% 3. Anand Dubey HUF (Resp. No.4) 39,94,500/- 30,00,000....
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....nswering respondent has demanded interest as per the rate agreed between the answering respondent and the Corporate Debtor. 21. After hearing the Ld. Counsels for applicant and Respondents 3 to 11, the matter was fixed for hearing of Respondent 2 i.e. RP, specifically at their request on 23.04.2019. On the said date RP further sought adjournment which was declined, hence liberty was sought and granted to file written submissions by RP, and further to all parties, if desired. 22. The main issue which is to be decided is: a. Whether the respondents No. 3 to 11, the members of CoC as on date are Financial Creditors as defined under Section 5 (7) while considering the money advanced by them, and/or, will fall under the category of Financial Debt under Section 5(8)(a). For convenience Section 5(8)(a) is reproduced hereunder: - (8) "financial debt" means a debt alongwith 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; The money advanced by the respondent Nos. 3 to 11 since is not in pursuance of any loan agreement/ document but merely a ....
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....he Central Government under section 51 of the Banking Regulation Act, 1949 (10 of 1949), or a corresponding new bank as defined in clause (d) of section 2 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970) or in clause (b) of section (2) of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980) , or from a cooperative bank as defined in clause (b-ii) of section 2 of the Reserve Bank of India Act, 1934 (2 of 1934) ; (iv) any amount received as a loan or financial assistance from Public Financial Institutions notified by the Central Government in this behalf in consultation with the Reserve Bank of India or any regional financial institutions or Insurance Companies or Scheduled Banks as defined in the Reserve Bank of India Act, 1934 (2 of 1934); (v) any amount received against issue of commercial paper or any other instruments issued in accordance with the guidelines or notification issued by the Reserve Bank of India; (vi) any amount received by a company from any other company; (vii) any amount received and held pursuant to an offer made in accordance with the provisions of t....
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....ccounted for in any manner whatsoever provided that such advance is appropriated against supply of goods or provision of services within a period of three hundred and sixty-five days from the date of acceptance of such advance: Provided that in case of any advance which is subject matter of any legal proceedings before any court of law, the said time limit of three hundred and sixty-five days shall not apply: (b) as advance, accounted for in any manner whatsoever, received in connection with consideration for property under an agreement or arrangement , provided that such advance is adjusted against the property in accordance with the terms of agreement or arrangement; (c) as security deposit for the performance of the contract for supply of goods or provision of services; (d) as advance received under long term projects for supply of capital goods except those covered under item (b) above: Provided that if the amount received under items (a), (b) and (d) above becomes refundable (with or without interest) due to the reasons that the company accepting the money does not have necessary permission or approval, wherever required, to deal in....
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.... by the respondents to the Corporate Debtor is not deposit but loan, the question arises as to what kind of debt can it be categorised into. Certainly, this is not an Operational debt as there is no transaction for goods or services, the money is plainly advanced for the business purpose of the Corporate Debtor having clause of Interest though much higher as compared to market or other prevailing rates in normal parlance or business dealings. 25. It needs to be discussed whether the money advanced by the Respondents no. 3-11 is Financial Debt as defined in Section 5(8), Hon'ble NCLAT has clarified the principles in respect of claimant being Financial Creditor in the judgment of Sanjay Kewalramani vs. Sunil Parmanand Kewalramani & Ors. Company Appeal (AT) (Insolvency No. 57 of 2018): - "12. There is nothing on the record to suggest that Respondents had given the loan in favour of the 'Corporate Debtor' which can be termed to be 'disbursement of an amount for consideration for the time value of money' as required under Section 5(8). Merely grant of loan and admission of taking loan will ipso facto not treat the Respondents as 'Financial Creditors', till they show that it ....