TaxTMI 
TaxTMI 
2020 (4) TMI 773
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....ar of Companies, Ahmedabad, with CIN: L65993GJ1995PLCO64810 and the Registered Office of the Applicant is at Indian Rayon Compound, Veraval, Gujarat, 362266. The Applicant is engaged in the business of securities broking and is registered as a stockbroker with Securities and Exchange Board of India. 3. The Respondent is a Limited Company incorporated under the provisions of Companies Act, 1956 on 22-9-1995, duly registered with Registrar of Companies, Jaipur, with CIN: U67120RJ1995PLCO10776 and the Registered Office of the Respondent is at 123, Stock Exchange Building, Malviya Nagar, Jaipur, 302017, Rajasthan. 4. The main object of the Respondent company is: - To carry on the business of financiers, merchant bankers, financing agents, financial broker, recovery agents, bill discounters and to undertake, carry on and execute all kinds of financial operations and to carry on the business of the money lending (subject to the provisions of law) including hire purchase, leasing of movable and immovable properties, machineries and commodities of all kinds either by way of pledge mortgage, hypothecation, charge or without any securities to any person, individual, body corporate f....
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.... had issued a statutory demand notice dated 15-3-2018 under section 8 of the IBC, 2016, demanding payment of Rs. 28,83,058.8/- plus interest @ 24% per annum and the same was replied vide reply dated 5-4-2018. 7. On perusal of the reply to the demand notice dated 5-4-2018, it is seen that the respondent has denied any outstanding amount to the Applicant and stated that an amount of Rs. 63,31,706.90/- is due from the applicant to the respondent. It is also stated that the respondent had instituted a case in the Court of District and Sessions Judge. Jaipur for which summons was sent to the applicant and its director on which the applicant had appeared in the Court through Advocate. The Respondent has denied the issuance of the cheque No. 926382 dated 9-2-2018 of Rs. 22,00,000/- to the applicant. 8. The applicant had sent rejoinder dated 2-5-2018 to the reply of the Respondent and denied that any amount of Rs. 63,31,706.09/- was due from the applicant to the Respondent and also stated that the petition filed before the District & Sessions Judge, Jaipur was frivolous and vexatious. 9. Thus, the applicant filed the present application under section 9 of the Insolvency and Bankru....
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....nt does not contain any reference as to the said cheques issued on 30-11-2017. (d) It is denied that Mr. Gyan Chand Mutha was duly authorised vide Board Resolution dated 25-3-2017 regarding dealing and opening account with the applicant. (e) The franking on the Client Registration Form has been done on 31-8-2017 while the date of form is 6-9-2017. Copy of the complete form is annexed as Annexure R/7 with the reply. 11. The Respondent has admitted the fact of opening of Trading Account No. 1070913 with the applicant; though denied the document filed by the Applicant with respect to the Opening and Trading Account with the application. It is submitted by the Respondent that it has not authorised any person to purchase the shares of SEIL. Also, the contract note dated 28-11-2017 filed by the applicant does not have the signatures of either the Respondent or its Authorised Representative. It is also submitted that the cheques alleged by the applicant were presented in Chennai situated bank for clearance. The Respondent had not received any legal notice dated 7-3-2018 under section 138 of the Negotiable Instruments Act, 1881 for dishonour of the said cheques. The re....
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....f the Respondent will not absolve their liability in the Trading Account. It is also submitted that the contract note is a digital document which need not have any seal and sign and therefore, the Respondent is liable to fulfil the obligations as per the contract note. The franking date should be before the execution. It is submitted that a welcome email dated 15 September, 2017 was sent by the applicant wherein copies of the Trading Account opening documents executed are shared with the Respondent and the Respondent had never raised any allegations or issues. 15. It is further submitted by the Applicant that the allegation of the Respondent that an amount is due from the applicant is false as the Respondent has neither raised any dispute nor submitted any documents in support of his claim at any forum. It is submitted that the legal notice dated 7-3-2018 was sent at the registered address of the Respondent and the same was returned with postal endorsement 'Left Without Instruction' and the Respondent proceeded further to file complaints with FTC III Metropolitan Magistrate Court, Saidapet, Chennai on 18 April 2018. 16. The Respondent had filed an Interlocutory Applic....
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....l services rendered to the applicant and the applicant never avail any financial services from the respondent. It is also submitted that the respondent neither actually carries on any of the financial services provided under section 3(16) of the IBC, 2016 nor it has placed on record anything to show that it is actually engaged in the business of providing such financial services and hence it cannot be said that merely because the Respondent has a registration certificate from the RBI under section 45-IA of the RBI Act, the Respondent is deemed to be a "Financial Service Provider" and on that account, excluded from the definition of a "Corporate Person" and/or a "Corporate Debtor" under the Code. 19. On perusal of the record it is seen that on 19-9-2019 this Tribunal had allowed the prayer to take on record the registration certificate issued by the RBI to the respondent and the Memorandum and Articles of Association of the respondent and left all other prayers to be decided along with the main application. 20. The applicant had filed written submissions in the main petition on 25-11-2019 and reiterated that respondent is not engaged in providing financial services. It was ....
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.... It is also stated that reply to the demand notice dated 05 April. 2018 by the respondent does not amount to a notice of dispute under the IB code, 2016. 24. The Respondent has filed his written submissions and submits that in compliance of the order of the tribunal the respondent wrote a letter dated 31-10-2019 seeking confirmation from RBI regarding status of the NBFC of respondent and status of returns filed with regulator/RBI. In response to which RBI confirmed the veracity of the certificate held by the Respondent and also affirmed the timely filing of returns. The copy of said letter from RBI is filed vide diary No. 2663/2019 dated 14-11-2019. The respondent has also relied upon the order passed by the Hon'ble NCLAT in the matter of 'Randhiraj Thakur v. Jindal Saxena Financial Services (P.) Ltd. [2018] 94 taxmann.com 340, wherein it was held that "'M/s. Mayfair Capital Pvt. Ltd.' (2nd Respondent) being a financial service provider' and having excluded from the definition of 'corporate person' under sub-section (7) of section 3 of the I&B Code the application under section 7 was not maintainable against 'M/s. Mayfair Capital Pvt. Ltd....
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.... Memorandum of Association of the Respondent the main objects include among other things, to carry on the business of financiers and to invest in and acquire and hold, sell, buy or otherwise deal in shares, debentures, bonds etc. Such activities fall under the definition of Financial Service as stated above. The RBI has also confirmed vide letter dated 06-11-2019 that the respondent is holding Certificate of Registration No. 10.00021 dated 3-3-1998, to carry on the business of non-banking financial institution and has filed all its return. 29. However, the fact that the RBI has granted Certificate of Registration to carry on the business of non-banking financial institution to the Corporate Debtor was neither brought to the knowledge of the Applicant at the time of executing the KYC nor in the reply to the statutory notice sent by the Applicant. The said fact is brought to the notice of the Tribunal and the Applicant only after 2 months from the date of the Application being filed by the applicant, thorough an IA. Also, as noted above in para 19, the respondent has intentionally deceived the applicant while executing the KYC Form. Now he cannot escape from his liability by raisi....
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....Once the arbitral tribunal has been constituted, the Court shall not entertain an application under sub-section (1), unless the Court finds that circumstances exist which may not render the remedy provided under section 17 efficacious. " 31. The respondent in Arbitration Application filed before the Court of District and Sessions Judge, Jaipur has prayed as below: "that the respondent be directed to not to destroy/usurp the deposited amount of the petitioner and according to the arbitration clause not to destroy/usurp the deposited amount of the petitioner till the proceedings relating to the dispute by Arbitral Tribunal in relation to the mistakes and for the safety of the deposited amount be deposited in the form of FDR in the Court." The respondent has contended in its reply to the present application also that a deposited amount of Rs. 63,31,706.09/- is due from the Applicant and in respect of the same dispute is pending before the Court of Additional District and Sessions Judge, Jaipur. On scrutiny of the files it is found that the respondent has not filed any document before the Tribunal showing an amount had been deposited with the applicant while opening the ....
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.... "It is clear, therefore, that once the operational creditor has filed an application, which is otherwise complete, the adjudicating authority must reject the application under section 9(5) (2) (d) if notice of dispute has been received by the operational creditor or there is a record of dispute in the information utility. It is clear that such notice must bring to the notice of the operational creditor the "existence" of a dispute or the fact that a suit or arbitration proceeding relating to a dispute is pending between the parties. Therefore, all that the adjudicating authority is to see at this stage is whether there is a plausible contention which requires further investigation and that the "dispute" is not a patently feeble legal argument or an assertion of fact unsupported by evidence. It is important to separate the grain from the chaff and to reject a spurious defence which is mere bluster. However, in doing so, the Court does not need to be satisfied that the defence is likely to succeed. The Court does not at this stage examine the merits of the dispute except to the extent indicated above. So long as a dispute truly exists in fact and is not spurious, hypothetical or....