TaxTMI 
TaxTMI 
2022 (5) TMI 874
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....ncy and Bankruptcy Code, 2016 (hereinafter called 'IBC') challenging the order dated 16.3.2022 (hereinafter called 'Impugned Order') passed by the Adjudicating Authority (National Company Law Tribunal, Ahmedabad) in CP(IB) No. 177/NCLT/AHM/2020 dismissing application under section 7 filed by the Respondent No.1. 2. The Appellants are ex-directors and authorized representatives of the corporate debtor M/s Superdrawn Wire Industries Pvt. Ltd., which is in the business of manufacturing of highly specialized steel wires used in wide range of applications in stones cutting, wire ropes, springs, galvanized wires, etc. The Appellants have stated that Respondent No. 1/Teco Industries has given an amount of Rs.26,49,46,085 including interest to the corporate debtor which was given as part payment towards an investment of a total of Rs.50 crores in the corporate debtor in which the Appellants were directors. 3. The Appellants have claimed that Mr. Ambrish L. Shah promised to invest Rs.50 crores in the Corporate Debtor and in return 49% of the total shareholding of the corporate debtor was to be transferred to him. They have further stated that Mr. Ambrish L. Shah informed that funds wo....
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.... e-mail ID of the Corporate Debtor is present in the MCA records but instead of using the correct email id of the corporate debtor the e-mail ID used by the information utility was [email protected] and [email protected], both belonging to directors of the corporate debtor whose email IDs were different than that of the corporate debtor. He has also urged that the amount of Rs. 19,40,81,000 transferred by the Respondent No. 1 to the corporate debtor was actually part advance of a total promised investment of Rs. 50 crores in the corporate debtor by Mr. Ambrish L. Shah and since he did not invest the full amount, the shares were not transferred in his name against the invested amount. He has thus claimed that the amount due to the corporate debtor is certainly not a financial loan as it was meant to be an investment and also, therefore, did not have any interest levied on it, something which the information utility has assumed on the basis of wrong and misleading information provided by the financial creditor Teco Industries. He has buttressed his argument of the said amount not being a financial loan by stating that since Respondent No. 1 did not invest the full ....
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....horized share capital of the corporate debtor is stated as Rs. two crores only and the paid up share capital is stated as Rs.1,99,95,540/- only, and therefore it is completely illogical that when the share capital is almost fully subscribed a fresh investment of Rs. 50 crores could be made. He has also pointed out that in the ledger account of the financial creditor maintained by the corporate debtor (attached at pgs. 50-51 of the copy of section 7 application filed vide dy. No. 35553 dated 30.4.2022), the corporate debtor has itself shown that the account of Teco Industries is a loan account. He has referred to para 28 of the judgment of Hon'ble Supreme Court in the matter of Innoventive Industries vs. ICICI Bank [2018 1 SCC 407] to underline that in the face of authenticated record of Information Utility, the fact of financial debt is established. 10. The Learned Senior Counsel for Respondent No. 1 has also argued that in case the corporate debtor had any grievance regarding any record/entry in Information Utility's record, it could have taken appropriate action under the Grievance Redressal Policy, which is provided in Regulation 12 of the Insolvency and Bankruptcy Board of I....
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....y a bank or financial institution; (i) the amount of any liability in respect of any of the guarantee or indemnity for any of the items referred to in sub-clause (a) to (h) of this clause;" 12. The regulations relevant to this appeal are Regulations 20 and sub-regulations (2) and (3) of regulation 21 of the Insolvency and Bankruptcy Board of India (Information Utilities) Regulations, 2017, which are reproduced below:- "20. Acceptance and receipt of information - (1) An information utility shall accept information submitted by a user in Form C of the Schedule. (2) On receipt of the information submitted under sub-regulation (1), the information utility shall- (a) assign a unique identifier to the information, including records of debt; (b) acknowledge its receipt, and notify the user of- (i) the unique identifier of the information; (ii) the terms and conditions of authentication and verification of information; and (iii) the manner in which the information may be accessed by other parties. 21. Information of default. xx xx xx xx (2) For the purpose of sub-regulation (1), t....
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.... face of the fact that as directors of the corporate debtor they were connected to and in responsible position in management of the corporate debtor, they cannot now take such a weak defense which is wholly untenable. Such an inference also comes out from regulation 21(3) of the Insolvency and Bankruptcy Board of India (Information Utilities) Regulations, 2017 which provides that if the debtor does not respond even after three reminders, the information of default is deemed to be authenticated. Moreover, we note that the corporate debtor or its authorized representative did not take any action under Grievance Redressal Policy under regulation 12 of the Insolvency and Bankruptcy Board of India (Information Utilities) Regulations, 2017 to set the record straight in case it found it to be incorrect. On the basis of these facts and analysis we are inclined to hold that the corporate debtor cannot deny the existence of a financial debt as defined in section 5(8) of the IBC as present in the record of the information utility. 14. We have also noted that the authorized share capital of the corporate debtor is Rs. 2 crores (in part II of Section 7 application at page 78 of appeal paperb....