TaxTMI 
TaxTMI 
TaxTMI 
2022 (2) TMI 68
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....ecured loan facility to the Respondent (Corporate Debtor) from the year 2007 till 2017. The Respondent has been paying interest on the unsecured loan. The Respondent has been deducting and depositing Tax Deducted on Source (TDS) on the interest paid to the Appellant. ii) Further case is that on 20.04.2017, the amount of Rs. 1.95 Crores was outstanding as unsecured loan from the Respondent and the Respondent has been paying interest on Rs. 1.75 Crores till 30.09.2018. Thereafter, 30.09.2018, neither payment of the principal amount of Rs. 1.95 Crores was made not any amount of interest was paid by the Respondent to the Appellant herein. iii) Further case is that on 21.01.2019, the Appellant issued a demand notice to the Respondent seeking repayment of the unpaid financial debt by the Respondent. That neither any payment was made nor any reply was sent by the Respondent to the notice of the Appellant. iv) Thereafter, on 22.02.2019, the Appellant had filed an Application before the Ld. Adjudicating Authority for initiation of Corporate Insolvency Resolution Process, in its capacity as a Financial Creditor under Section 7 of the IBC filed by the Appellant dated 22.02.2019 seeking ini....
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....educting and depositing TDS on the interest paid to the Appellant and the same can be seen from the TDS certificate which is at page 137 to 141 of the Appeal Paper Book as well as the Ledger Accounts for the Financial Year 01.04.2014 to 31.03.2018 of the Respondent at page 172 to 178 of the Appeal Paper Book. 5. It is further submitted that the cheques issued by the Respondent to the Appellant (at page 130, 133 and 135 of the Appeal Paper Book) clearly reflects the amount disbursed by the Appellant to the Corporate Debtor was in the nature of debt treated as an unsecured loan. 6. The Learned Sr. Counsel for the Appellant while relying on the judgment of this Appellate Tribunal in the case of "Shailesh Sangani Vs. Joel Cardoso & Anr. Company Appeal (AT) (Insolvency) No. 616 of 2018" at paragraphs 5 and 6, wherein this Appellate Tribunal held as hereunder: " 5. We have gone through the record and given our anxious consideration to the submissions made at the Bar. For determination of the issue whether the amount claimed by Respondent No. 1 from the Corporate Debtor, default in payment whereof culminated in initiation of Corporate Insolvency Resolution Process, falls within the pu....
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....t, if any, should have been disbursed against the consideration for the time value of money. Use of expression 'if any' as suffix to 'interest' leaves no room for doubt that the component of interest is not a sine qua non for bringing the debt within the fold of 'financial debt'. The amount disbursed as debt against the consideration for time value of money may or may not be interest bearing. What is material is that the disbursement of debt should be against consideration for the time value of money. Clauses (a) to (i) of Section 5(8) embody the nature of transactions which are included in the definition of 'financial debt'. It includes money borrowed against the payment of interest. Clause (f) of Section 5(8) specifically deals with amount raised under any other transaction having the commercial effect of a borrowing which also includes a forward sale or purchase agreement. It is manifestly clear that money advanced by a Promoter, Director or a Shareholder of the Corporate Debtor as a stakeholder to improve financial health of the Company and boost its economic prospects, would have the commercial effect of borrowing on the part of Corporate Debtor notwithstanding the fact that n....
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....Promoter, Director and Guarantor to the Credit Facilities. iv) Amount deposited towards promoter's contribution in terms of a stipulation of HDFC Bank. v) Availing of Loan from the Respondent Company (para 8 at page 4 of the Reply). vi) Ledger accounts from 01.04.2010 onwards (para 9 at page 183 of the Appeal Paper Book). vii) Bank Account Statements proving the amount drawn by the Company (at page 48 of the Appeal Paper Book). viii) Amount deposited from 10.01.2007 to 07.09.2016 (at page 59 & 60 of the Appeal Paper Book). ix) Working for computation of amount and days of default in tabular form (at page 59 & 60 of the Appeal Paper Book). x) Evidence of disbursement of loan (at page 59 & 60 of the Appeal Paper Book). xi) Bank Statement of IDBI Bank Account of the Appellant (at page 59 of the Appeal Paper Book). xii) Dates of disbursements (Clause 1 of part IV at page 43 of the Appeal Paper Book). xiii) Conversion of Unsecured Lone into Equity as and when required to maintain a positive tangible net worth (Sl. No. 8 of declaration/ Undertaking/ specific Conditions at page 165 & 168 of the Appeal Paper Book). 10. Misleading/ contradictory information: The Appella....
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....ainst consideration for the time value of money. There is nothing on the record to suggest that the Respondents borrowed the money. 13. It is further submitted that there are no documents/records to prove that the Appellant is a Financial Creditor. The Appellant vide paras 33, 35, 36, 39 & 40 at page 189 to 190 of the Appeal stated that the Audited Balance Sheets and other documents mentioned in para 8 of Part-V of the Application prove beyond doubt that two ingredients of IBC Application i.e. Debt and Default are fully stratified. Meaning thereby there was no Financial Debt defined under Section 5(8) of IBC. Further the audited Balance Sheets also do not prove the existence of financial debt and default defined under Section 3(12) of IBC. These Balance Sheets do not prove that the whole loan or its instalment when became due and payable and the same is/are not repaid. The Hon'ble Supreme Court in the matter of "M/s Innoventive Industries Ltd. Vs. ICICI Bank & Anr." at para 28 of the Judgment held that a 'Debt may not be due if it is not payable in law or in fact' and also held that the speed within which the 'adjudicating authority is to ascertain the existence of....
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.... 40% shares in the Respondent Company and IA No. 391 of 2020 filed by the Appellant before the Ld. NCLT. b) Personal Identification. c) Being Promoter, Director and Guarantor to the Credit Facilities. d) Amount deposited towards promoter's contribution in terms of a stipulation of HDFC Bank. e) Availing of Loan from the Respondent Company. f) Ledger accounts from 01.04.2010 onwards (para 9 at page 183 of the Appeal Paper Book). g) Bank Account Statements proving the amount drawn by the Company. h) Amount deposited from 10.01.2007 to 07.09.2016 (at page 59 & 60 of the Appeal Paper Book). i) Working for computation of amount and days of default in tabular form (at page 59 & 60 of the Appeal Paper Book). j) Evidence of disbursement of loan. k) Bank Statement of IDBI Bank Account of the Appellant. l) Dates of disbursements (Clause 1 of part IV at page 43 of the Appeal Paper Book). m) Conversion of Unsecured Lone into Equity as and when required to maintain a positive tangible net worth (Sl. No. 8 of declaration/ Undertaking/ specific Conditions at page 165 & 168 of the Appeal Paper Book). The Appellant has given contradictory information before the Ld. Adjudicating Authority (para 1 ....