TaxTMI 
TaxTMI 
2020 (2) TMI 1078
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.... Mahesh Prasad claiming to be 'Financial Creditor' filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 ("I&B Code" for short) for initiation of the 'Corporate Insolvency Resolution Process' against 'M/s. MedinnBelle Herbalcare Private Limited'- ('Corporate Debtor'). The Adjudicating Authority (National Company Law Tribunal), Principal Bench, New Delhi dismissed the application taking into consideration the nature of transaction held that it is a pure and simple advancement of loan denuded of any element of time value for money. Therefore, such a transaction would not acquire the status of a 'financial debt'. 2. The case of the Appellant is that he is one of the promoters of 'Genesis Management Consultancy Servi....
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....tly, a deal was pursued by the 'Corporate Debtor' with one 'Piramal Enterprises Limited' wherein the 'Corporate Debtor' was advised by 'Piramal Enterprises Limited' to acquire an infringing trademark called "NPD Endure Mass". As the 'Corporate Debtor' was falling short of the liquid funds required to pay for acquisition of "NPD Endure Mass" and also required some external funding support, it approached to the Appellant and requested him to lend them a sum of Rs. 1.70 Crore (One Crore Seventy Lakh). Later an amount of Rs. 1.70 Crore (One Crore Seventy Lakh) was lent by the 'Financial Creditor' to the 'Corporate Debtor' vide Memorandum of Understanding dated 16th January, 2018. It would be beneficial to read the said Memorandum of Understand....
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.... the loan was agreed to be returned by the 'Corporate Debtor' to the Appellant at the earliest as soon as either the deal is consummated with 'Piramal Enterprises Limited' or the 'Corporate Debtor' would itself generate funds to return the money to the Appellant within three months. 5. The 'Corporate Debtor' had issued a cheque for fulfilment of its liability with regard to entire loan amount of Rs. 1.70 Crores in favour of the Appellant which was expected to be honoured when deposited. However, upon presentation the said cheque with the banker on 12th March, 2018, the same was bounced back with the endorsement 'signature not as per the mandate'. Thereafter, the 'Corporate Debtor' issued a fresh cheque bearing No. 000725 dated 13th March,....
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....t be finalized. However, the Appellant offered that he can arrange still better deal with some other company and can also arrange investments from good investors or can arrange sale of the Respondent's Company Trade Marks at a good price to leading companies. In pursuance thereof the Appellate proposed to sign an agreement on pre-dated (6th December, 2016) which was a typed agreement and sent vide e-mail dated 7th December, 2016. 9. Subsequently, the Appellant offered that he can arrange good deal with 'Piramal Enterprises Limited' to sell the Respondent's brand 'Endura Mass' along with other brands. In the wake of said deal officials of 'Piramal Enterprises Limited' got search done about the Respondent's brand and found that litigation wa....
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....ppellate Tribunal in "Shailesh Sangani V. Joel Cardoso─ Company Appeal (AT) (Insolvency) No. 616 of 2018" decided on 30th January, 2019 and "G. Sreevidhya v. M/s. Karismaa Foundations Pvt. Ltd.─ Company Appeal (AT) (Insolvency) No. 494 of 2018". 12. From the pleadings made by the parties, we find that the amount allegedly stated to be the 'debt' is: a) Was not borrowed against the payment of interest. b) It is not the amount accepted/ raised under any credit facility. c) The amount has not been raised pursuant to any 'Note Purchase Facility' or issue of Bonds, Debentures, loan stock etc. d) The amount does not arise of any liability in respect of hire purchase contract, or lease or any other instrument to suggest that t....