TaxTMI 
TaxTMI 
2021 (1) TMI 1220
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....the Corporate Debtor. Considering the long term cordial relationship with the Corporate Debtor, the Applicant agreed to extend the aforementioned loan facility for an amount of INR 5,50,00,000/- to the Corporate Debtor. Accordingly, the Applicant and the Corporate Debtor entered into Loan Agreement. As per the Loan Agreement, the said loan facility was extended by the Applicant to the Corporate Debtor for a period of six years. Further, as per clause 1 of the Loan agreement, the Corporate Debtor was liable to pay interest at the rate of 12% per annum to the Applicant. The amount of INR 3,59,24,490/- was disbursed by the Applicant to the Corporate Debtor till 28.05.2014. iii. Further, out of the total principal amount disbursed to the Corporate Debtor, on 17.12.2014, the Corporate Debtor made a payment to the Applicant towards the principal amount of INR 15,75,510/- and thereafter stopped making further payments towards the principal amount and no payment was received thereafter till recently. The Corporate Debtor also made some payments amounting to Rs. 61,24,769/- to the Applicant towards the interest till 19.01.2016 and thereafter stopped making further payments towards ....
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....res in the name of the Respondent and which includes the entry of loan/debt of the Applicant herein i.e. Indian Delco Private Limited. Further, the funds transferred to the Respondent were simultaneously withdrawn/ siphoned off and transferred to various companies of M/s. Aarone Group. iv. It is relevant to mention here that the respondent has never authorized Mr. Nimish Arora or any other person representing the Aarone Group to take any credit facility on behalf of the Company. v. That the alleged credit facility extended by the Applicant to the respondent was also part of such fraud and sham transactions executed by Mr. Nimish Arora without any authority in its favour. Further, the funds transferred by the Applicant to the Respondent were also later siphoned off/transferred to the various companies under the Aarone Group. vi. Further, any such alleged credit facility extended by the Applicant to Mr. Nimish Arora or the alleged loan agreement dated 02.08.2013, signed by Mr. Nimish Arora is unenforceable qua the Respondent and are void ab-initio. It is pertinent to note here that as per Section 292 of the Companies Act, 2013, and Section 179(3)(d) of the ....
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....s hit by Section 65 of the IBC. 4. Further, the Respondent has also filed an application captioned IA/5412(ND) 2020 under Section 60(5) of the Code read with Section 151 of the CPC for bringing the Forensic Audit Report on record. It is submitted that the said Forensic Audit report reveals the irregularities and fraudulent transfers in the form of web of entries conducted by the former director of the Corporate Debtor. Further, the said forensic audit report also reveals that the alleged transaction of the applicant is not only unauthorized and illegal but also collusive between the former director of the Respondent and the Applicant. Therefore, it is of utmost importance to bring the said forensic audit report on record for the efficient and effective disposal of the present application. 5. We have heard the Ld. Counsel for the applicant and respondent and perused the averments made in the application, reply and averment made in IA/5412/2020 filed by the respondent. 6. Ld. Counsel for the applicant in course of his arguments submitted that on the basis of agreement dated 02.08.2013, the Corporate Debtor had entered into a loan agreement with the applicant for a period of ....
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....t "From the above data, it can safely be inferred that fund received from. Indian Delco Private Limited was Rs. 375 lakhs but simultaneously a total sum of Rs. 225 lakhs is diverted to other company leaving only Rs. 150 lakhs in the company for proper utilization in the project whereas entire sum of Rs. 375 lakhs in the books of accounts of the company as debt payable to Indian Delco as unsecured loan. No written loan agreement is found in the records of the company pertaining to the aforestated alleged loan. No record is found as regard any authorization or resolution ever passed in the meeting of Board of Directors to raise afore stated loan and or authorizing any of the directors to execute corresponding agreement with Indian Delco Private Limited. Thus, there is clear infringement of Section 179 of the Companies Act, 2013 and the alleged transaction is not binding on the company". 13. He further submitted that in view of Section 180(1)(c) of the Companies Act, 2013, a Special Resolution was needed to secure a loan in absence of which the transaction stands void. 14. He further submitted that no Special Resolution was introduced at the first instance in any Board Meeting o....
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....e approval of the Board of Director and without having special resolution passed by the board of Director, therefore, we would like to consider this submission at first. 23. At this juncture, we would like to refer the averment made in para 4 of the written submissions in which the respondent has quoted page 33 of IA/5412/2020 and the same is quoted below: -"From the above data, it can safely be inferred that fund received from Indian Delco Private Limited was Rs. 375 lakhs but simultaneously a total sum of Rs. 225 lakhs is diverted to other company leaving only Rs. 150 lakhs in the company for proper utilization in the project whereas entire sum of Rs. 375 lakhs in the books of accounts of the company as debt payable to Indian Delco as unsecured loan. No written loan agreement is found in the records of the company pertaining to the aforestated alleged loan. No record is found as regard any authorization or resolution ever passed in the meeting of Board of Directors to raise afore stated loan and or authorizing any of the directors to execute corresponding agreement with Indian Delco Private Limited. Thus there is clear infringement of Section 179 of the Companies Act, 2013 and....
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....y court or the Tribunal except with the leave of that court or the Tribunal and any such process, if issued, shall bear thereon a statement that it is issued with the leave of the court or the Tribunal (Font in Blue notified on 01-06-2016) (3) A copy of, or extract from, any document kept and registered at any of the offices for the registration of companies under this Act, certified to be a true copy by the Registrar (whose official position it shall not be necessary to prove), shall, in all legal proceedings, be admissible in evidence as of equal validity with the original document. 27. Mere plain reading of the provision shows that under this provision any person may inspect the documents, which are kept in the office of Registrar regarding the incorporation of the company, which includes the Article of Association and Memorandum of Association. 'The documents which a person is entitled to get from the office of Registrar u/s 399 of the Companies Act and if he fails to see and verify it prior to entering with a contract with the company then the company is not liable for that act, if it is done by the Director, because it comes under the doctrine of constru....
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....tter which may be prescribed: Provided that the Board may, by a resolution passed at a meeting, delegate to any committee of directors, the managing director, the manager or any other principal officer of the company or in the case of a branch office of the company, the principal officer of the branch office, the powers specified in clauses (d) to (f) on such conditions as it may specify: [Provided further that the acceptance by a banking company in the ordinary course of its business of deposits of money from the public repayable on demand or otherwise and withdrawable by cheque, draft, order or otherwise, or the placing of monies on deposit by a banking company with another banking company on such conditions as the Board may prescribe, shall not be deemed to be a borrowing of monies or, as the case may be, a making of loans by a banking company within the meaning of this section.] Explanation I.-Nothing in clause (d) shall apply to borrowings by a banking company from other banking companies or from the Reserve Bank of India, the State Bank of India or any other banks established by or under any Act. Explanation II.-In respect of dealings....
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....g of monies by the banking company within the meaning of this clause. Explanation.-For the purposes of this clause, the expression "temporary loans" means loans repayable on demand or within six months from the date of the loan such as short-term, cash credit arrangements, the discounting of bills and the issue of other short-term loans of a seasonal character, but does not include loans raised for the purpose of financial expenditure of a capital nature; (d) to remit, or give time for the repayment of, any debt due from a director. (2) Every special resolution passed by the company in general meeting in relation to the exercise of the powers referred to in clause (c) of sub-section (1) shall specify the total amount up to which monies may be borrowed by the Board of Directors. (3) Nothing contained in clause (a) of sub-section (1) shall affect- (a) the title of a buyer or other person who buys or takes on lease any property, investment or undertaking as is referred to in that clause, in good faith; or (b) the sale or lease of any property of the company where the ordinary business of the company consists of, or comprises, such ....
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....Counsel for the respondent is that in the absence of the special resolution, the amount which was received by the company on the basis of agreement executed by the one of the Director is void ab initio, in our considered view is not liable to be accepted. 31. We further notice that in view of first proviso of Section 179(1) of the Company Act 2013 the Board of Director shall also exercise its powers in the manner stated in the memorandum or articles of association but we notice that the respondent has not enclosed the articles of association or memorandum of association of the respondent company to show that the Director was not authorized to enter into an agreement and to receive the loan, therefore, in the absence of such document, we are of the considered view that the respondent has failed to establish this fact that the person who signed the loan agreement was not authorized under the Articles of Association or memorandum of Association to borrow the loan for the benefit of the company. 32. At this juncture, we would like to refer the submission of the Ld. Counsel for the respondent as well as the Forensic Audit report referred in para 4 of the written submission and the....
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....than ten percent. of the total number of such allottees under the same real estate project, whichever is less: Provided also that where an application for initiating the corporate insolvency resolution process against a corporate debtor has been filed by a financial creditor referred to in the first or second provisos and has not been admitted by the Adjudicating Authority before the commencement of the insolvency and Bankruptcy Code (Amendment) Ordinance, 2019, such application shall be modified to comply with the requirements of the first or second provisos as the case may be within thirty days of the commencement of the said Ordinance, failing which the application shall be deemed to be withdrawn before its admission. Explanation.-For the purposes of this sub-section, a default includes a default in respect of a financial debt owed not only to the applicant financial creditor but to any other financial creditor of the corporate debtor. (2) The financial creditor shall make an application under sub-section (1) in such form and manner and accompanied with such fee as may be prescribed. (3) The financial creditor shall, along with the application....
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....ther in the Forensic Audit Report that amount has been shown as received by the company and that has also been utilised for the benefit of the project of the company. Therefore, the receiving of the amount has been not denied by the respondent and it is also admitted by the respondent that amount has not been paid because the director who entered into an agreement was not authorized by the special resolution as required under Section 180(1) of the Companies Act to borrow the loan and in view of Section 7(5) of the IBC the moment the Adjudicating Authority came to the conclusion that default has occurred and the application under sub-section (2) is complete, and there is no disciplinary proceedings pending against the proposed resolution professional then the Adjudicating Authority has no option but to admit the application filed under Section 7 of the IBC. So far the dispute is concerned like Section 9 the Corporate Debtor is not required to raise under Section 7 of the IBC and we further notice that the applicant has also proposed the name of the IRP Mr. Rakesh Kumar Jain who has also given their consent in Form 2 which is available at page 25 of the application and he also gave a....