TaxTMI 
TaxTMI 
2020 (8) TMI 741
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....rishnan, and Mrs. Radha Gouri, who were the promoters of the Appellant Company. 3. Between 1st November, 2002 and 12th September 2003, the Respondents had advanced an aggregate sum of Rs. 2.10 crores, in tranches, to M/s Radha Exports, a proprietorship concern of Mrs. Radha Gouri, for its business purposes. 4. In 2004-2005, the Respondents advanced a further sum of Rs. 10 lakhs to the said proprietorship concern, M/s Radha Exports. The said M/s Radha Exports thus obtained total loan of Rs. 2.20 crores from the Respondents, during the period between 2002 and 2004. The loan was unsecured and free of interest. 5. According to the Appellant Company, M/s Radha Exports repaid Rs. 80,40,000/- to the Respondents between 1st October, 2003 to 18th March 2004. As recorded in the judgment and order dated 19th December, 2018 of the NCLT, the Respondent Nos. 1 and 2 jointly wrote a letter dated 11th January, 2011 to the Deputy Commissioner of Income Tax, Company Circle V (3), Chennai, where they stated that, as on 31st March, 2004, the said proprietorship concern M/s Radha Exports had a loan liability of Rs. 1,39,60,000/- (Rs. 2,20,00,000/- less Rs. 80,40,000/-) to the Respondents. The ....
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....ed before the NCLT. The last payment appears to have been made on 23.03.2006. 10. On or about 6th October, 2007, the Respondent No.2 resigned from the Board of the Appellant Company. At the time of resignation, the Respondent No.2 requested the Appellant Company to treat the share application money of Rs. 90,00,000/- as share application money of Mr. M Krishnan and to issue shares of the value of Rs. 90,00,000/- in the name of Mr. M. Krishnan. The amount of share application money of Rs. 90,00,000/- transfered to Mr. M. Krishnan, was to be treated as a personal loan from the Respondent No.2 to the said Mr. M. Krishnan. 11. By another letter dated 11th January, 2011 addressed to the Deputy Commissioner of Income Tax, Company Circle V(3), Chennai, being Annexure A-4 to the reply filed by the Appellant Company, the Respondent No.2 confirmed that she had requested the Appellant Company to allot shares in the name of the said Mr. M. Krishnan against her share application money, which the said M. Krishnan had agreed to treat, as his personal loan from the Respondent No.2 and pay her the amount at a later date. 12. The Appellant Company claims to have issued shares of the value o....
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....unning the respondent company. In para 3 of the said reply, the respondent asked for details of the payments made by the petitioners to the respondent. But in para 12, the respondent company had stated that the transactions have been placed before the Income Tax Department, for which the petitioners had signed the affidavits. The allegations are contradictory to each other and it reveals rank forgery committed by the respondents to 1 to 3. 8. The Petitioners had not signed any documents or blank papers or any affidavits to the respondent or its directors. The directors of the respondent company are capable of forging the signatures of the petitioners, which has been proved on various occasions..." xxx xxx xxx 10. The petitioners state that from the reply notice given by the advocate, it is clearly understood that the respondent and its directors had forged the signatures of the petitioners to the Income Tax Department.... 11. The petitioners states that the petitioners had verified the records of the Registrar of Companies, Chennai and found that the 2nd petitioner's signature had been forged in the resignation letter, which has been forged immed....
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....n 9 of the IBC. 21. By an order dated 12th April 2018, a Single Bench of NCLT dismissed CP/77/(IB)/CB/2018 filed by the Respondent No.1, claiming himself to be an 'Operational Creditor' under Section 9 of the IBC, as withdrawn, with liberty to file a fresh petition in accordance with law. 22. Thereafter, on 25th April 2018, the Respondents filed a fresh petition being WC.P. No.770/IB/CB/C-II/2018 before the NCLT (Chennai Bench) under Section 7 of the IBC, as "Financial Creditor", claiming principal amount of Rs. 2.10 Crores together with interest @ 24% per annum from 2007, amounting to Rs. 4,41,60,000/-. The Appellant Company filed its counter statement in CP No.770/IB/2018 before the NCLT. 23. By a judgment and order dated 19th December 2018, the NCLT meticulously recorded details of the payments made by the Appellant Company and/or its predecessor in interest to the Respondents, considered the letters written by the Respondents to the Income Tax Authorities and dismissed CP No. 770/IB/CB/2018, being the petition filed by the Respondents under Section 7 of the IBC, inter alia, holding that the Respondents were not Financial Creditors of the Appellant Company, and in any c....
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.... has placed proof by submitting copies of the statement of the statement of accounts of various banks reflecting payments made to these Applicants, on the contrary, these Applicants have not placed any material showing as to whether these payments were made or not. 25. In this case, if we go by the case of the Applicant, it is a claim made basing on the money disbursed by way of cheque payment in the year 2002 & 2003. This money was also not disbursed to this Corporate Debtor, it was given to a partnership firm. 26. This Applicant, has not even placed any material disclosing how this debt is still alive after lapse of three years from the date of disbursement. Whenever any claim is made, when it is beyond three years period as envisaged under Article 136 of the Limitation Act, the person making claim is bound to disclose and explain as to how the debt claim is not barred by limitation. No such effort has been made by these Applicants to prove that this is within limitation. Assuming that filing of this Company Petition is continuation to the winding up proceedings filed before the Hon'ble High Court i.e. 15.02.2013, then also, since these Applicants have claimed money was dis....
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....mpugned judgment and order dated 2nd September 2019 the Appellate Tribunal allowed the appeal of the Respondents and set aside the order dated 19th December 2018 of the NCLT, dismissing the application under Section 7 of the IBC. 30. It appears that the Appellate Authority was not inclined to accept the submission of the Appellant Company, that the entire amount had been paid, for two purported reasons. The first reason was that the Correlation Statement showed payments of certain amounts amounting to Rs. 53,05,000/- in favour of Customs, Chennai and payments amounting to Rs. 1,75,000/- in favour of one Mr. Kulasekaran. The Respondents, as Financial Creditors had disputed that these payments were towards the dues of the Financial Creditors. The second reason was that, if the total amount had been paid, there was no reason for the Appellant Company to take the plea that the amount was not payable, the same being barred by limitation. 31. It is well settled in law that alternative defences are permissible to contest a claim. It was thus open to the Appellant Company, to refute the claim of the Respondents by taking the plea of limitation and also to contend that no amount was i....
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.... particulars of the proposed interim resolution professional in part III, particulars of the financial debt in part IV and documents, records and evidence of default in part V. Under Rule 4(3), the applicant is to dispatch a copy of the application filed with the adjudicating authority by registered post or speed post to the registered office of the corporate debtor. The speed, within which the adjudicating authority is to ascertain the existence of a default from the records of the information utility or on the basis of evidence furnished by the financial creditor, is important. This it must do within 14 days of the receipt of the application. It is at the stage of Section 7(5), where the adjudicating authority is to be satisfied that a default has occurred, that the corporate debtor is entitled to point out that a default has not occurred in the sense that the "debt", which may also include a disputed claim, is not due. A debt may not be due if it is not payable in law or in fact. The moment the adjudicating authority is satisfied that a default has occurred, the application must be admitted unless it is incomplete, in which case it may give notice to the applicant to rectify the....
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....the Limitation Act 1963, the period of limitation for initiation of a suit for recovery of money lent, is three years from the date on which the loan is paid. The last loan amount is said to have been advanced in 2004-2005. In the winding up petition, there is not a whisper of any agreed date by which the alleged loan was to be repaid to the Respondents. In the instant case, apparently the debt was barred by limitation even in the year 2012, when winding up proceedings were initiated in the Madras High Court. 38. The NCLT rightly refused to admit the application under Section 7 of the IBC, holding the same to be barred by limitation. The Appellate Tribunal has erred in law in reversing the judgment and order of the earlier Adjudicating Authority. The Adjudicating Authority rightly rejected the application as barred by limitation. The Appellate Authority patently erred in law in reversing the decision of the adjudicating authority and admitting the application. 39. As recorded in the said order dated 19th December, 2018 passed by the NCLT Chennai, the Respondent Nos. 1 and 2 jointly addressed the letter dated 11th January, 2011 to the Income Tax Department confirming that the ....
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....person to whom a debt is owed and includes a financial creditor, an operational creditor, a secured creditor, an unsecured creditor and a decree-holder; (11) "debt" means a liability or obligation in respect of a claim which is due from any person and includes a financial debt and operational debt; (12) "default" means non-payment of debt when whole or any part or instalment of the amount of debt has become due and payable and is not paid by the debtor or the corporate debtor, as the case may be. xxx xxx xxx 5. Definitions.- In this Part, unless the context otherwise requires,- ......... (7) "financial creditor" means any person to whom a financial debt is owed and includes a person to whom such debt has been legally assigned or transferred to; (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; (b) any amount raised by acceptance under any acceptance credit facility or its de-materialised equivalent; (c) any amount raised pursuant to any note pur....