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2020 (9) TMI 941
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.... This Petition has been filed by M/s. Sugesan Transport Pvt. Ltd. It is not in dispute that in addition to this party, two other entities which appear to be group companies have also given money to the Corporate Debtor. The money has been given to the Corporate Debtor by these entities as evidence from the promissory note of Corporate Debtor in the following manner:- Sugesan Transport Pvt. Ltd., Rs. 1,00,00,000/- vide UTR No. CORPR92015121112850002 Sugesan Warehousing Pvt. Ltd., Rs. 75,00,000/- vide UTR No. CORPR92015121112850003 Sugesan Mines and Minerals Pvt. Ltd., Rs. 75,00,000/- vide UTR No. CORPR92015121112850004 As far limitation aspect is concerned, there is no doubt that the Petition has been filed within limitation period. We have also carefully perused the terms and conditions of MOU whereby both the parties in addition to this Financial transaction have entered for creation of a SPV which has not materialized. It is to be noted that the Corporate Debtor was already having tender in its favour from Kolkata Port Trust which as per its claim only has been illegally terminated by the Kolkata Port Trust and which has resulted into default in the payment of the loan ta....
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....nding' dated 11.12.2015 with the Respondent (Sugesan Transport Pvt. Ltd.) who was willing to invest Rs. 2.5 Cr. Towards margin money for issuance of 'Performance Bank Guarantee' and also participate in the execution of work by forming a private limited Company which was to be incorporated preferably by 25.12.2015 or a later date. 5. The Learned Counsel for Appellant points out that as per clause 1.5 of 'Memorandum of Understanding' the money which would be given by the Respondent was to be utilized as margin money to enhance the limit of bank guarantee of Rs. 3.25 Crore also that, it was stipulated that the same was to be returned to Respondent with Bank rate of interest within thirty days but not later than eighty-nine days at any cost. Moreover, it is the stand of the Appellant that in terms of Clause 1.6 of 'Memorandum of Understanding' till the money was not returned as contemplated under clause 1.5, the Respondent shall hold 91.63% shareholding of the 'Corporate Debtor (ECB) as security along with a cheque of Rs. Three crores as available security. 6. The Learned counsel for the Appellant brings it to the notice of this Tribunal that 'Memo....
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....rovided detailed information or documents by Corporate Debtor (ECB) with an ulterior motive to cause loss and damage to ECB failed to complete the formation of the Company and had also not arranged for the machinery required for commissioning the work by 06.01.2016 as per Clause 7.3 of Tender document. 9. As a matter of fact, 'KOPT' was sending reminders to mobilise all minimum equipments and machineries and also extended the date but STPL could not mobilise the equipment nor their sister concern 'Collate Consultants'. Finally, the 'KOPT' through letter dated 10.02.2016 had cancelled the contact and encashed the bank guarantee of Rs. 2.5 Cr. Invested by 'STPL'; Since the work had not commenced by mobilising the man power and resources. The Learned counsel for the Appellant takes stand that the Corporate Debtor 'ECB' through letter dated 06.06.2016 and 06.06.2016 continued to issue cheques or replace it after expiry of its validity period as 'security' for a sum advanced towards the 'Bank Guarantee' and in fact these cheques were never meant to be encashed but given as security which was indicated in the letter itself. Therefo....
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....aising of bills on KOPT by the Corporate Debtor and the Respondent(STPL). Further, without successful generation of the business and earning of profits, there is no question of returning of the money by ECB to STPL as it is directly linked to sharing of profit. 12. The Learned counsel for the Appellant contends that the Respondent (STPL) by stipulating in MOU to pay interest at bank rate has tried to pass on its interest burden on ECB which availing overdraft facility from its banker of Rs. One core as would be evident from the statement of its current account with 'Corporation Bank' which has been annexed to the Section 7 Application, but that too having crossed the limit of borrowing, it has to put in the money of Rs. 75 lacs each through its sister concern without any legal authorisation to the STPL for grant of loan ECB as has been rightly noted by the 'Adjudicating Authority' in the impugned order and hence, the claim of the Respondent (STPL) for Rs. 1.5 crore as financial debt was rightly rejected. 13. The Learned Counsel for the Appellant submits that the amount disbursed by the Respondent(STPL) to the Corporate Debtor (ECB) is not a loan or money borrowed ....
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....lly for a sum of money received today to be paid for over a period of time in a single or series of payments in future. It may also be a sum of money invested today to be repaid over a period of time in a single or series of instalments to be paid in future. In Black's Law Dictionary (9th edition) the expression 'Time Value' has been defined to mean "the price associated with the length of time that an investor must wait until an investment matures or the related income is earned". In both the cases, the inflows and outflows are distanced by time and there is a compensation for time value of money. It is significant to notice that in order to satisfy the requirement of this provision, the financial transaction should be in the nature of debt and no equity has been implied by the opening words of Section 5(8) of the IBC. It is true that there are complex financial instruments which may not provide a happy situation to decipher the true nature and meaning of a transaction. It is pertinent to point out that the concept 'Financial Debt' as envisaged under Section 5(8) of the IBC is distinctly different than the one prevalent in England as provided in its Insolvency ....
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....en made against the 'consideration for the time value of money' through any instrument. For example, for any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price and for calculating the value of any derivative transaction for which only the market value of such transaction shall be taken into account, it is not necessary to show that amount has been disbursed. The disbursement against the 'consideration for the time value of money' is the main factor. 30. In the present case, the Appellant has failed to bring on record any evidence to suggest that she disbursed the money has been made against 'consideration for the time value of money'. There is nothing on the record to suggest that the Respondents borrowed the money. In absence of such evidence, the Appellant cannot claim that the loan if any given by the Appellant comes within the meaning of 'financial debt' in terms of sub-section (8)(a) of Section 5 of the 'I&B Code'." 15. The Learned counsel for the Appellant cites the judgment of this Tribunal in Company Appeal (AT) (Ins) No. 142 of 2017 Neeraj Bhatia Vs. Davinder ....
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....l commenced and that the Respondent witness was cross examined in 2018 and the filing of the Application before the Adjudicating Authority after the Trial had progressed substantially, disentitles Respondent (STPL) to claim any relief under I&B Code and STPL has to await for a favourable Award in the 'Arbitration' before moving the 'Adjudicating Authority'. 20. The Learned counsel for the Appellant submits that in the present case no detail was furnished about the default committed by producing Records of 'Information Utility' under Section 214 of I&B Code, 2016 or any evidence exhibiting the default and its exact date. 21. That part, the Learned counsel for the Appellant refers to the decision of the Hon'ble Supreme Court in Innoventive Industries V. ICICI bank 2018 (1) SCC 407 wherein it has held that the 'Debt' is not due and payable if it is not payable in Law or in Fact. 22. Lastly, it is the plea of the Appellant that the Application filed before the 'Adjudicating Authority' by the Respondent under the I&B Code goes to the root of the matter on the point of jurisdictional issue and that the parties may be relegated to 'Arbitr....
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....is Tribunal in Nikhil Mehta V. AMR Infrastructure Ltd. reported in (2017) 143 SCL 278 (NCLAT) wherein the definition of the expression 'Financial Creditor' as defined under Section 5(7) of the I&B Code was examined. It is the plea of the Respondent that the time value has been defined in Black's Law Dictionary (9th Edn.) defined o mean "the price associated with the length of time that an investor must wait until an investment matures or the related income is earned. 28. The Learned counsel for 1st Respondent submits that the Applicant was a 'Financial Creditor' and the Section 7 I&B Code Application filed before the 'Adjudicating Authority' is maintainable, cites a decision of Anubhati Aggarwal V. DPL Builders (2018) 145 SCL 688 (NCLT- New Delhi), wherein it has observed that in the Agreement, as the Corporate Debtor was required to pay interest to the Creditor, as the interest amounted to consideration for the Time value of money. The Learned counsel for the Respondent points out that 'Memorandum of Understanding' dated 11.12.2015 was not a contract for Guarantee and in the present case, the amount was borrowed as 'Financial Assistance'....
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....ty' and specifies that such Civil Court or an 'Authority' cannot entertain any suit or proceedings which are in the nature of a 'lis' in respect of which the 'National Company Law Tribunal' or 'National Company Law Appellate Tribunal' has jurisdiction. As per Section 7 of the Code, a Financial Creditor' can initiate 'Insolvency Proceedings' against the 'Corporate Debtor' before the 'Adjudicating Authority'. Section 4 of the Code says that Part II applies to all matters relating to 'Insolvency' and 'Liquidation of 'Corporate Debtors' where the minimum amount of the default is Rs. One Lakh. In terms of Section 9 of the Code, an 'Operational Creditor' after fulfilling the requirements of Section 8, can initiate the 'CIRP' against the 'Corporate Debtor' before an Adjudicating Authority. In pith and substance if the 'Debt' due and payable is above One lakh rupees, then the Application for 'Corporate Insolvency Resolution' can be filed before the Adjudicating Authority i.e. NCLT and not before any other fora. Furthermore, the ingredients of Section 238 of the Code o....