TaxTMI 
TaxTMI 
2019 (1) TMI 1813
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....nding debt of Rs.50,00,000/- with interest as on 11.10.2017. 2. The Petitioner has submitted Form-5 along with the relevant documents such as computation of claim, Bank Account statements with ICICI Bank to demonstrate that the payments were made through RTGS directly transferred in the account of Shantai Exim, alleged to be a 'Corporate Debtor'. A Legal Notice sent on 11.10.2017 through Advocate. Also, proposed the name of Interim Resolution Professional. Brief Facts of the Case: 3. The Petitioner states that during December 2016 the Corporate Debtor approached him for a short term financial assistance as the Corporate Debtor was in financial crunch and assured that the fund will be repaid by March 2017. On the assurance of the Corporate Debtor, the Petitioner provided financial assistance up to Rs.55,00,000/- in December 2016. In the mid of March 2017, the Corporate Debtor repaid Rs.5,00,000/- to the Petitioner assuring that the balance amount will be paid in December 2017. The Corporate Debtor further offered an interest of @12% p.a. for the remaining amount of Rs.50,00,000/- till the time of repayment and further assured that the interest part will be paid on 1st day o....
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....s.50,00,000/-, the Corporate Debtor stated that there was no loan taken from the Petitioner, as alleged, and the amount transferred to the account of the Respondent/Debtor Company from the account of Petitioner and his wife (joint account) was only an internal arrangement as the Petitioner in this case is closely related to the family of the Directors of the Respondent/Debtor Company. The Petitioner's wife; Mrs. Karishma Rochlani is the sister of Mr. Vasudev Sawlani and Mr. Harish Sawlani who are the directors of the Respondent/Debtor Company. It further states that Mrs. Karishma Rochlani has filed a divorce petition with the Family Court, Bombay. Therefore, Rs.50,00,000/- is retained by the Respondent/Debtor Company for the final decision on the Petition of their sister in the Family Court, Bombay. The said amount of Rs.50 lakhs is thus retained by them as an escrow amount for the alimony of their sister who is seeking divorce from the Petitioner. It is further pleaded that it is clear from the petition itself that no documentary evidence for the loan given is placed on record hence in this situation such an arrangement must not be treated as a loan liability on the on going Compa....
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....nderstanding, this amount was initially transferred as a financial assistance which was nothing but a "temporary finance". 8.1 The Respondent has placed on record a reply, duly perused, wherein challenged the very nature of the transfer of the impugned money. The crux of the entire challenge is that the Petitioner had advanced the said amount for the welfare of his wife and children. Therefore, it was not a loan on which there was an agreement to pay the interest or to return the said amount within some specified period. The Respondent has informed that Petitioner's father had given a flat bearing No. 19 in the Building known as Prabhat Building to the Petitioner and out of the sales proceeds of the Flat deposited the said amount in the Company. It was therefore, not the individual money but belongs to the family hence, the wife had demanded her share. Thereafter, on arriving at a family arrangement, it was deposited with the Company to give financial security to Petitioner's wife. It is also necessary to mention that wife of the Petitioner belongs to the family of the Debtor Company. Undisputedly, brothers of his wife are managing this ongoing concern. It is also affirmed by bo....
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....al of interest it is the responsibility of the person to deduct TDS at the time of payment or on passing the credit entry as interest in its books of accounts. Keeping this provision of Income Tax Act in mind, the Debtor Company had deducted the TDS and issued a certificate on Form 26-AS, already furnished by the Petitioner as a part of the evidence. Because of this reason a conclusion can be drawn that the Respondent Company has unequivocally recorded the transaction in question as a Financial Liability. 8.4 From the side of the Respondent Debtor it is pleaded that in the case of "Engenious Engineering Pvt. v. Onaex Natura Pvt. Ltd." [Company Appeal (AT) (Insolvency) No. 249 of 2017 dtd. 01.11.2017], an investment was made towards allotment of shares which was not considered by the Respected NCLAT as a debt in the nature of Financial Debt, hence, rejected the claim. As against that, what we have noticed in the present case is that the transaction was made to overcome the financial problem of the debtor company. Also, it is an admitted fact that on 03.04.2017 and on 28.8.2017 interest was paid of Rs.1,43,803/- and Rs.1,34,630/- for each quarter. When there was a default of non-p....
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....utes are within the domain of a Civil Court. In such precedents the Petitioner had resorted to several legal proceedings, therefore, it was held that the Tribunal cannot enter into the disputed question of fact which could be resolved only through formal proceedings of a Civil Court. As against that, the distinguishable feature is that the family dispute among husband and wife has nothing to do with the impugned transaction of a transfer of money from the Petitioner in the accounts of the Debtor company. In the present case, the cause of action had arisen when the Debtor company had refused to return the loan. However, in the Civil proceedings the cause of action is in operation when the litigating parties file a suit of divorce. Both the legal proceedings are independent having no nexus with each other, therefore, can be independently adjudicated by two different judicial forum. 8.7 Ld. Counsel of the Respondent has also placed a reliance on an order of NCLT Mumbai bench passed u/s 7 dated 07.07.2017 (TCP 411/IBC/NCLT/MB/MAH/2017) cited as 2017 SCC OnLine NCLT 7655 in the case of "Mr. Vir Vikram Vaid v. M/s. Offshore Testing & Inspection Services (I) Pvt. Ltd." for the legal pr....
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....s to the Respondent at the time of booking of their unit a Loan given by the Appellants to the Respondent for constructing the project. In support of the above claim the Appellants have placed on record, their Form 16A and 26AS which are at pages 5-33 of their paper book dated 17.04.2017, filed before tis Appellate tribunal". 9.1 Further it was also observed as under:- "From the provisions of Law and discussion as made and quoted above, we find that following essential criteria's to be fulfilled for a Creditor to come within the meaning of 'Financial Creditor':- (i) A person to whom a 'Financial Debt' is owed and includes a person whom such debt has been legally assigned or transferred to (ii) The debt along with interest, if any, is disbursed against the consideration for time value of money and include any one or more mode of disbursed as mentioned in clause (a) to (i) of subsection (8) of Section 5". 9.2 In the said decision, the claim of the Petitioner as a Financial Creditor was dismissed by the Adjudicating Authority, which was challenged by the Financial Creditor as Appellant before respected NCLAT. The Hon'ble Tribunal has taken into account....