TaxTMI 
TaxTMI 
2017 (9) TMI 1859
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....ondent Company is a Private Limited Company incorporated under the provisions of the Companies Act, 1956 having its Registered Office in Ahmedabad. The Paid-up Share Capital of the Respondent Company is Rs. 12,67,200. 4. It is the case of the Applicant, that Respondent Company approached the Applicant in the year 2014 for the purpose of Unsecured Loan. Applicant Company has originally advanced a loan for an amount of Rs. 90,00,000 vide Cheque No. 717932 on 9.6.2014. Thereafter, Respondent had periodically received an amount of Rs. 3,03,60,000 as Unsecured Loan during the financial year 2014-15. The details of the money given by the Applicant in the financial year 2014-15 ended on 31.3.2015 are as shown in Exhibit 'C' attached to the Application. Respondent Company admitted the debt and deducted 'TDS' on the interest payable on the debt. Respondent Company deducted the TDS of Rs. 1,96,724 on the total amount of interest of Rs. 19,67,238/- as on 31.3.2015. Applicant filed copy of Form No. 26AS showing the interest amount and TDS amount as Exhibit 'D'. Applicant also filed copy of Interest Calculation upto 31.3.2015 and confirmation of the account as Exhibit....
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....Insolvency Resolution Process. Respondent Company filed Annual Return for the financial year ended on 31.3.2016. The Registered Office of the Respondent Company is in Ahmedabad. It is stated that the Application is within time. Applicant proposed the name of Shri Umesh Ved, as 'Interim Resolution Professional' and filed his Written Communication in Form-2. 10. Applicant despatched the copy of the Application to the Respondent. This Application has been filed on 29th August, 2017 and the same was listed before this Adjudicating Authority for the first time on 31st August, 2017. This Adjudicating Authority directed the Applicant to serve notice of date of hearing and file proof of service. Applicant filed proof of service of date of hearing. Respondent appeared through a Counsel and filed Objections on 13.9.2017. 11. The following are the Objections filed by the Respondent. The Applicant Company's Director is a real brother of the Director of the Respondent Company, and there is corresponding obligations of the Applicant Company and its management to make payment to the Respondent Company and its management. It is further stated that there is one partnership firm jo....
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....hat in order to initiate Insolvency Resolution Process there must be default occurred in respect of the financial debt and in this case there is no evidence to show that default has occurred. Respondent further stated that it has no liabilities or claims from any secured creditors or Government debtors and it is discharging its contractual and statutory liabilities in ordinary course of business, and there is no question of Respondent Company running away and unable to pay debts. Respondent pleaded that it is not the duty of the Company Court to examine whether the Respondent has genuine dispute to the claimed debt. It is contended that the Company Court has to see whether the dispute is on substantial grounds and it is a bona fide one or not. 12. Heard the learned counsel for the Applicant and the learned counsel for the Respondent. In view of the Objections raised by the Respondent, this Adjudicating Authority has to first decide whether the amount claimed from the Respondent by the Applicant is a financial debt or not. "Financial Debt", to the extent relevant for the purpose of this case, is defined in Clause (a) of sub-section (8) of Section 5 of the Code. It says, "financia....
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....ency) No. 1 & 2 of 2017 in the matter of Innoventive Industries Ltd. v. ICICI Bank [2017] 82 taxmann.com 190 (NCL-AT), wherein it is, inter alia, held that the Adjudicating Authority has to ascertain and record satisfaction as to the occurrence of default before admitting an Application. It is further held in that Judgment, that once the Adjudicating Authority is satisfied that a default occurred and the Application is complete and that there is no disciplinary proceeding pending against the proposed Insolvency Resolution Professional, it is required to admit the case, and in case if the Application is incomplete, the Financial Creditor has to be granted 7 days' time to complete the Application. The above said Judgment of the Hon'ble National Company Law Appellate Tribunal was challenged in Civil Appeal No. 8337-8338 of 2017 before the Honourable Supreme Court of India. The Hon'ble Apex Court vide Judgment dated 31st August, 2017, dismissed the above said Appeals. In Para No. 30 the Hon'ble Supreme Court has held 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....
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.... connection the Applicant has to pay certain amount. Another plea raised by the Respondent is that the Director of the Applicant Company is the brother of the Director of the Respondent Company and they have got a joint partnership business and they had transactions right from 2010. No doubt, the letter dated 24th April, 2017 produced by the Applicant shows that there is a creditor-debtor relationship between the Applicant Company and the Respondent Company right from 2010. That supports more the case of the Applicant than the case of the Respondent. Pertaining to this transaction, the Applicant stated that Respondent approached it in 2014 for Unsecured Loan. That does not even impliedly mean that there are no transactions much less credit transactions between the Applicant and the Respondent prior to 2014. The very fact that the Respondent deducted tax on interest on loan amount shows that there is an outstanding debt, which is a financial debt due from the Respondent to the Applicant. Even assuming that Respondent is entitled for certain amounts from the Applicant, it can only be treated as a set off or counter-claim and it can not be a dispute relating to the financial debt due ....