TaxTMI 
TaxTMI 
2019 (7) TMI 1818
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....22.07.2019passed in M.A No. 700 of2019] b) Pass an order of Interim stay of the meetings of the Committee of Creditors pending disposal of the above petition. c) Direct the respondent to reconstitute the Committee of Creditors. d) Pass any other order/ direction as this Hon'ble tribunal may deem jit and proper in the facts and circumstances Of the case. At the outset it is important to mention that the Corporate Debtor is undergoing the CIR Process by virtue of order dated 24.07.2018 passed by this Authority in 3. The Applicant has filed his claim in Form 'C' on 14.08.2018 before the Resolution Professional viz. Ebenezar Inbaraj, which has been rejected by his letter of rejection dated 17.09.2018. Subsequently, the Resolution Professional viz. Ebenezar Inbaraj was replaced by Mr. S. Rajendran by order of this authority dated 26.02.2019. The newly appointed Resolution Professional has re-considered the claim of the Applicant and rejected the sarne vide letter of rejection dated 30.04.2019. The reasons for rejection as stated in the said letter are as follows: "There are no documentary evidence for having paid the amount of Rs. 5,....
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.... had issued a statutory notice under Section 138 of the Negotiable Instrument Act, to the Corporate Debtor and all the Directors, to which EQ_E21u was given by the Corporate Debtor. 8. The Resolution Professional in his counter has admitted that there is a demand promissory note dated 21.02.2017 for Rs. 3 Crores and there is no common seal affixed on it. The Resolution Professional has further submitted that there is no board resolution authorizing such borrowing and there is no document demonstrating the disbursal of funds, receipt of funds or utilization of funds by the Corporate Debtor. The RP has submitted that the Applicant states this transaction to be cash transaction, which is more than rupees twenty thousands and is in violation of Section 269SS of Income Tax Act, 1961. 9. The Resolution Professional has further submitted in the reply that the transaction between the Applicant and Mr. Senthil are in their personal capacity and the Corporate Debtor has not received any benefit and the Applicant has not produced any original documents till date. 10. The Resolution Professional has also submitted in the reply that the Applicant has not produced any income tax return ....
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.... of the Companies Act, 2013 and Rule 45 of the National Company Law Tribunal, Rules 2016 are reproduced as follows; "432. A party to any proceeding or appeal before the Tribunal or the Appellate Tribunal, as the case may be, may either appear in person or authorise one or more chartered accountants or company secretaries or cost accountants or legal practitioners or any other person to present his case before the Thbunal or the Appellate Tribunal, as the case may be. (Emphasis supplied) "45. Rights of a party to appear before the Tribunal: (1) Every party may appear before a Tribunal in person or through an authorized representative, duly authorized in writing in this behalf." The term 'Authorised Representative' is defined under rule 2(6) of the NCLT Rules, 2016 as under: "Authorised Representative, means a person authorized in writing by a party to present his case before the Tribunal as the representative of such party as provided under Section 432 of the Act." 14. Besides the above, the authorized representative of the Applicant has referred to the judgment of the Hon ble Supreme Court given in Harishankar Rastogi vs Girdh....
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.... of a lender may be necessary when there is no documentary proof for advancement of the loan. In the present case, the Applicant is relying upon loan confirmation letter and pro-note, both dated 21.02.2017 and Cheque dated 12.06.2017, besides this, the Cash Register/Cash Book from 01.01.2014 to 31.03.2017 is also placed on record. Therefore, it is not open to the Corporate Debtor to contend that the lender/ Applicant has not paid the tax on the amount advanced to it, so he is not entitled to recover the amount claimed. A similar issue has come up before the Hon ble High Court of Madras in Anbarasu and Anr vs Mukanchand Bothra (deceased) and anr., in CrL R.C. Nos. 870 to 872 of 2017 (delivered on 24.07.2019), wherein the Hon 'ble court has observed as follows: " .... when a person wants loan from another, he is not required to investigate into the means by which his creditor had amassed wealth. If the accused in these cases had wanted to be puritans, they should have told Mukunchand at the threshold itself that, they being puritans, will obtain loan only from a person who is also a puritan and who has disclosed all his earnings to the income tax department. In the opini....
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....hree years; vi. If the borrowing is on repatriation basis then the percentage of NCDs issued to NRIs/PIOs to the total paid up value of all NCDs issued shall not exceed the ceiling prescribed for issue of equity shares/ convertible debentures for foreign direct investment in India. Further, the funds towards borrowing should be received through inward remittance from outside India or by debit to NRE/FCNR (B) account of the investor maintained with an authorised dealer or an authorised bank in India;" 20. Based on the above, the learned Sr. counsel for the Resolution Professional/Corporate Debtor alleged that cash transaction between the Applicant and Corporate Debtor is non-est in law. In support of his argument, he has cited the judgement given in MannaZaZ Khetan vs. Kedar Nath Khetan, (1977) 2 SCC, wherein the Hon ble Supreme Court held that in addition to the prohibition issued under Order 21, Rule 46 a separate prohibitory order was issued to the company in Form 18 in Appendix E of the First Schedule of the Code of Civil Procedure. Therefore, the company by registering the transfer of shares was obviously permitting the transfer and such action on the part of the co....
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....a regular Account No. 12781010000133, NR Others, OD limit:O.OO, Currency: INR with HDFC Puducherry Il. The Account statements pertaining to the Account of the Applicant issued by the HDFC Bank w.e.f. 01.08.2008 to 27.08.2018 is placed on record. But in this case, the transactions relating to the advancement of loan between the Applicant and the Corporate Debtor have been made in cash, as reflects from the Cash Book (maintained by the Applicant) for the period w.e.f., 01.01.2014 to 31.03.2017, the transactions are also confirmed by the Respondent/ Corporate Debtor vide its loan acknowledgment/ confirmation letter dated 21.02.2017 executed by the managing director viz., Senthil kumar of the Corporate Debtor. Thus, there is no evidence that the money has been brought in by the Applicant from abroad. Therefore, there is no violation of the Foreign Exchange Management Act, 1999 read with Foreign Exchange Management (borrowing and lending in Rupees) Regulations, 2000 notified vide notification no. FEMA 4/2000-RB dated May 3, 2000, and the FED Master Direction No. 6/2015-16 dated 01.01.2016 as is contended by learned Sr. counsel for the Resolution Professional/ Corporate Debtor. Even if, ....
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....ch 2018 (a non- compliance under Companies Act, 2013). The provisional accounts for the period 1st APHI 2018 to 24th July 2018 have not been signed by any of the directors of the company. RP strongly opined that the accounts needed to be urgently complied for 2017-18 and an independent auditor/finn should be appointed immediately for auditing of accounts... " 25. From the statement of the RP quoted above, it becomes clear that the Corporate Debtor has not been maintaining the accounts properly, for which the Applicant cannot be made liable, as the same pertains to the internal management of the Respondent/ Corporate Debtor. Therefore, the absence of any entry in the Books of Account of the Corporate Debtor, about the loan taken from the Applicant, cannot be a valid ground for rejection of the claim of the Applicant, in the face of the bulk of the documentary evidence, i.e., loan confirmation letter, pro- note and Cheque including Cash Book produced by the Applicant, to substantiate his claim. 26. As to the issue of the Board Resolution, the Applicant has referred to the acknowledgment/ confirmation letter 21.02.2017 executed by the managing director viz., Senthil kum....
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....d. 28. Besides the above, the Applicant has referred to the Cash book for the period January 1st 2014 to March 31st 2017, which is Audited and reflects the cash transactions date wise, by which loan to the tune of Rs,30000000 (three crores) was advanced to the Corporate Debtor. Therefore, the entries made. in the 'Cash book' strengthen the case of the Applicant. Further, the Cheque dated 12.06.2017 issued by the Managing director to the applicant was presented before the Bank, which got dishonored on 13.06.2017, on account of 'insufficient funds' and not for any other reason, even for mismatch of the signature. The Applicant has given the notice on 06.07.2017 under Section 138 of the Negotiable Instrument Act, 1881 to the Corporate Debtor, but no reply was given to the same. Further, there is statutory presumption that the Cheque dated 12.06.2017 and Pro-note dated 21.02.2017 issued by the Managing director viz., Senthil kumar after having affixed the seal of the Corporate Debtor is in discharge of a legally enforceable debt or liability. In this regard, reliance is placed on the judgement of the Hon 'ble Supreme Court given in the case Of T.P Murugan (Dead) ....