AI Drafter 
TaxTMI 
TaxTMI 
2022 (8) TMI 323
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....ial) : Preface (in Company Appeal (AT) (CH) (INS) No. 214 of 2022): The Appellant / Shareholder of the 2nd Respondent / Corporate Debtor M/s. Lepakshi Knowledge Hub Private Limited, Bangalore, Karnataka, through its Director Mr. I. Karunakar Reddy has preferred the present Company Appeal (AT) (CH) (INS) No. 214 of 2022 before this Appellate Tribunal, on being dissatisfied' with the 'impugned order', dated 03.06.2022, in CP(IB)/107/BB/2021, passed by the 'Adjudicating Authority', 'National Company Law Tribunal' ('NCLT'), Bengaluru Bench, in admitting the Company Petition. 2. The 'Adjudicating Authority', 'National Company Law Tribunal' , Bengaluru Bench, while passing the 'impugned order' in CP(IB)/107/BB/2021 filed by the 1stRespondent/Petitioner/Financial Creditor against the 2nd Respondent/Corporate Debtor at paragraphs 9 to 12, had observed the following: 9. ''It is not in dispute that the Respondent/Corporate Debtor executed a corporate guarantee in favour of the Financial Creditor/Petitioner guaranteeing repayment of the amount paid by the Financial Creditor/Petitioner to the Principal Borrower i.e., Lepakshi Science and Technology Park Private Limited. In C.....
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.... takes us to the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. Under Rule 4, the application is made by a financial creditor in Form 1 accompanied by documents and records required therein. Form 1 is a detailed form in 5 parts, which requires particulars of the applicant in Part I, particulars of the corporate debtor in Part II, particulars of the proposed interim resolution professional in Part III, particulars of the financial debt in Part IV and documents, records and evidence of default in Part V. Under Rule 4 (3), the applicant is to dispatch a copy of the application, filed with the adjudicating authority by registered post or speed post to the registered office of the corporate debtor. The speed, within which the adjudicating authority is to ascertain the existence of a default from the records of the information utility or on the basis of evidence furnished by the financial creditor, is important. This it must do within 14 days of the receipt of the application. It is at the stage of Section 7(5), where the adjudicating authority is to be satisfied that a default has occurred, that the corporate debtor is entitled to point out that a default....
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....aid investment scheme. 18. On the other hand, the Learned Senior Counsel appearing for the Petitioner submits that the Inter Corporate Deposit is an independent transaction and cannot be treated as part of any action or document in pursuance of the Memorandum of Understanding dated 07.01.2022 executed between the Petitioner and a third party. 19. We find force in the submissions made by the Learned Senior Counsel appearing for the Petitioner/Financial Creditor. The Memorandum of Understanding dated 07.01.2022, on which the Respondent placed reliance was admittedly executed between the Petitioner and a separate legal entity known as M/s. Lepakshi Knowledge Hub Private Limited. Further, the amount received by the Respondent/Corporate Debtor under the subject Inter Corporate Deposit dated 19.03.2022 was not for purchasing of any shares by the Petitioner in the Respondent Company. On the other hand, it was for meeting certain expenses by the Respondent/Corporate Debtor. Hence, the contention of the Petitioner in this regard is rejected. The other contention with regard to the pending Arbitration proceedings etc., have no relevance in the application u/s 7 of the IBC, ....
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....3 / 2020 considered its earlier judgement in Dr. Vishnu Kumar Agarwal vs. Piramal Enterprises Limited, C.A. (AT) (Ins.) No. 346/2018 and after interpreting the law, held that the Financial Creditor can simultaneously or one after another initiate CIRP against the Corporate Debtor as well as Corporate Guarantor. Hence, there is no impediment in initiating CIRP against the Respondent herein, who is the Corporate Guarantor, even after initiating the CIRP against the Principal Borrower. 12. The instant application filed in the prescribed Form No. 1 is found to be complete.'' and admitted the main Company Petition, by declaring 'Moratorium' and appointed an 'Interim Resolution Professional', Mr. Hemendra Paliwal, etc. Appellant's Submissions (in CA (AT)(CH)(INS) No. 214 of 2022): 3. The Learned Counsel for the Appellant submits that the 'Adjudicating Authority',('National Company Law Tribunal', Bengaluru Bench), while passing the 'impugned order' in CP(IB)/107/BB/2021 had failed to appreciate the real, correct ambit of its Jurisdiction in terms of Section 7 of the I & B Code, 2016 and brushed aside the aspect of 'Arbitration Proceedings' between the 'Parties', in the i....
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.... these were placed before the 'Adjudicating Authority' and substantiated with documentary record by the Corporate Debtor. However, these facts were not taken into account by the 'Adjudicating Authority' at the time of passing the 'impugned order'. 8. The Learned Counsel for the Appellantpoints out that the 'Adjudicating Authority' had failed to apply the decision of the Hon'ble Supreme Court of India in Indus Biotech (P) Ltd. V Kotak India Venture (Offshore) Fund, reported in [2021] 6 SCC at page 436. 9. The Learned Counsel for the Appellant submits that the 'Adjudicating Authority' had wrongly held that the 1st Respondent's Application was within limitation, by incorrectly placing reliance on the Balance Sheets for the Financial Years 2011-2012 to 2018-2019. In this regard, the stand of the Appellant is that the Corporate Debtor had cogently explained as to how Rs.5 Crores continued as a mere balancing entry to balance the asset side entry towards Stamp Duty amounting to Rs.5 Crores which is an irreversible one. In fact, after the Financial Year 2016-2017, the note at the end of the liability was specifically modified, removing any reference to the 'Inter-Corporate Deposit' ....
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....ehalf of the Appellant is that the 1st Respondent/Financial Creditor's claim before the 'Arbitration Tribunal' was not only terminated but positively dismissed and an 'Appeal' was filed by the 1st Respondent as per Section 34 of the Arbitration and Conciliation Act, 1996, and therefore, unless the Hon'ble High Court set aside the 'Award', the 1st Respondent is legally precluded from claiming the amounts. 1st Respondent's/Financial Creditor's/Petitioner's Contentions(in CA (AT)(CH) (INS) Nos. 214 and 216 of 2022: 17. The Learned Counsel for the 1st Respondent/Financial Creditor submits that the 1st Respondent had executed an 'Inter-Corporate Deposit' Agreement dated 19.03.2012 with the 2nd Respondent (M/s. Lepakshi Science and Technology Park Private Limited), in and by whicha sum of Rs.5 Crores only was advanced to the 2nd Respondent (M/s. Lepakshi Science and Technology Park Private Limited) has a 'Short Term Loan' and that the term of this 'Inter-Corporate Deposit' was 6 months,which was repayable on demand thereafter with an interest at 18% per annum. 18. Also, it is brought to the notice of this 'Tribunal' that the 1st Respondent/Financial Creditor 'as security'towards....
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....nd Interest at the rate of 18% was payable from 21.09.2012. 23. The specific plea of the 1st Respondent/Financial Creditor is that 'Inter-Corporate Deposit' is a 'contract' executed with a 'Party' (M/s. Lepakshi Science and Technology Park Private Limited - L1), which is legally distinct from the 'Appellant/Parent Company' and the same applies to the execution of the 'Corporate Guarantee' as well (M/s. Lepakshi Heritage Wellness Village Private Limited - L2). 24. The Learned Counsel for the 1st Respondent/Financial Creditor points out that nothing in the 'Memorandum of Understanding' or in any 'document' produced by the Appellant states the foundation of the fact that the 'Inter-Corporate Deposit' was a Short Term Loan executed with M/s. Lepakshi Science and Technology Park Private Limited (L1) and guaranteed by M/s.Lepakshi Heritage Wellness Village Private Limited (L2) that was meant to be repaid with interest. In short, the 1st Respondent/Financial Creditor's plea is that the success or failure of the transaction contemplated with the Appellant as per the 'Memorandum of Understanding' signed with M/s. Lepakshi Knowledge Hub Private Limited (Appellant) and L1 and L2 are not....
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.... and 650 acres of Land to Lepakshi Heritage Wellness Village Pvt Ltd. 5. I confirm that the transfer of Rs.5 Crore was a short-term Loan disbursed to Lepakshi Science and Technology Park Pvt Ltd for which M/s. Lepakshi Heritage Wellness Village Pvt Ltd had guaranteed repayment and therefore it also reflects as ''Other Financial Liabilities'' in the books of accounts of both the companies.'' 28. The Learned Counsel for the 1st Respondent submits that neither the 'Memorandum of Understanding' nor the 'Inter-Corporate Deposit' document or the 'Corporate Guarantee' refer to any 'forfeiture Clause' or 'any adjustment of the Inter-Corporate Deposit Sum' in final payment to be made to the 2nd Respondent. That apart, there is no written (or) verbal communication (or) any legal document executed between the 'Parties' on such 'Adjustments' / 'Forfeiture'. 29. The Learned Counsel for the 1st Respondent/Financial Creditor submits that the proceedings in 'Indus Biotech' case arose in the context of the Respondent seeking to initiate 'Insolvency' on account of the 'Petitioner' failing to effect payment of a sum on redemption of 'Optional Convertible Redeemable Preference Shares', ....
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....) was forwarded by the Financial Creditor to the Borrower. * The ICD was executed in furtherance of Memorandum of Understanding dated 07.01.2012 (``MoU'') that the Financial Creditor had entered into with Lepakshi Knowledge Hub Pvt Ltd (``Project Proponent'') * Under the MoU the Financial Creditor was investing in the project undertaken by the Project Proponent. * The Project Proponent had entered into a Memorandum of Agreement with the Government of Andhra Pradesh on 22.12.2008 (``MoA'') for the purpose of setting up global knowledge hub (``Project''). By way of this MoA the government of Andhra Pradesh agreed to allot and transfer required land to the Project Proponent. Further the Project Proponent incorporated two entities i.e. the Borrower and Corporate Debtor. * It was the understanding between the Financial Creditor and the Project Proponent in terms of the MoU that the Project Proponent was in the process of transferring 2000 acres and 650 acres of land to the Borrower and the Corporate Debtor respectively. * Under the MoU with the Project Proponent the Financial Creditor agreed to purchase 100% equity shareholding in the Corporate Debtor and the Borrower for....
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.... * The total outstanding principal amount due and payable by the Corporate Debtor stands at Rs.5,00,00,000/- (hereinafter referred to as the `` Outstanding Principal Amount Due''). The Outstanding Principal Amount fell due and payable on 21.09.2012 at the end of the term of the ICD. Thereafter the ICD continued to subsist and was recalled on 19.09.2020. The liability has been acknowledged by the Borrower in its Balance Sheet between the financial years 2011-12 to 2018-19. * The outstanding interest payable on the unpaid amount of debts as on 26.06.2021 by the Corporate Debtor amounts to Rs.20,84,94,000/- (Rupees Twenty Crores Eighty Four Lakhs Ninety Four Thousand Only) (hereinafter referred to as the ``Outstanding Interest Amount Due''). Compound Interest at the rate of 18% was payable from 21.09.2012. * The calculation of the Outstanding Principal Amount and the Outstanding Interest is provided and filed in a tabular format in this present Application. * The total amount due and payable by the Corporate Debtor including the Outstanding Principal Amount and the Outstanding Interest Amount stands at Rs.25,84,94,000/- (Rupees Twenty Five Crores Eight Four Lakhs Ninety Four ....
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....nt' / 'Lepakshi Knowledge Hub Pvt Ltd' ('LKH/Appellant') made an 'Application' to the Andhra Pradesh Industrial Infrastructure Corporation ('APIIC'), being a 'Nodal Agency', in Andhra Pradesh to provide lands for the Industrial and Infrastructural Development. 37. Indeed, the 'Government of Andhra Pradesh' and the 'Andhra Pradesh Industrial Infrastructure Corporation' ('APIIC') had provided around 8,848 Acres of land to the Appellant / M/s. Lepakshi Knowledge Hub Private Limited ('LKH') at Chilamattur and Gorantla in Anantapur District, Andhra Pradesh. Later, the Appellant / LKH had paid the necessary sale consideration after which the 'Andhra Pradesh Industrial Infrastructure Corporation' had executed numerous Sale Deeds conveying the total land to the Appellant. 38. According to the 2nd Respondent/M/s. Lepakshi Heritage Wellness Village Pvt. Ltd., during the Year 2011 negotiations took place between the 1st Respondent/Petitioner/Financial Creditor and the Appellant/LKH to enable the Petitioner to participate in a part of the 'Project' and it was agreed that 2650 Acres out of total land proposed to be developed by the Claimant ('subject land') would be transferred to R2 / M/....
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....inuing further, it is incumbent on the part of the 1st Respondent/Petitioner to perform further steps, so that the Appellant/LKH was paid the initial payment consideration towards the transfer of the 1st tranche of shares. 42. It is projected on the side of the 2nd Respondent/LHW that the 1st Respondent/Petitioner had not come forward to pay the 1st tranche of the sale consideration and intentionally backed out from the transaction without paying the initial payment along with the definitive agreements, the parties considered the 'Transaction' as failed. Apart from this, the 1st Respondent/Petitioner and M/s. Lepakshi had entered into several ancillary agreements being 'Inter-Corporate Deposit Agreement' dated 19.03.2012, 'Corporate Guarantee' dated 29.03.2012 and an 'Escrow Agreement' dated 16.04.2012 and none of these 'Agreements' had any independent existence apart from the terms and performance of the 'Memorandum of Understanding'. 43. The 2nd Respondent/LHW in its 'Reply' had averred that Rs.5 Crores was transferred from the 1st Respondent/Petitioner/Financial Creditor to the 2nd Respondent/LST in CA (AT) (CH) (INS) No. 216 of 2022 was, admittedly not towards the Share T....
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.... Creditor had also failed to demonstrate any written acknowledgement in debt before 3 years before the instant 'Application' (filed under Section 7 of the Code), making any reference to the purported 'Inter-Corporate Deposit' in the manner that extends the time as mentioned in the 'Limitation Act'. Furthermore, the 'claim' is barred by 'Limitation'. Financial Debt: 48. To be noted, that with a view to fulfil the requirement of Section 5 (8) of the I & B Code, 2016, the financial transaction ought to be in the nature of 'Debt'. An existing obligation to pay a sum of money is the sine qua non of a 'Financial Debt'. A sum of money which is certainly and in all eventualities payable is a 'Debt' without regard to the fact whether it is payable now or at a future date. Debt : 49. The term 'Debt' (as per Section 3 (11) of the Code) means a 'liability' or 'obligation' in respect of a 'claim' which is due from any person and includes a 'financial debt' and 'operational debt'. 50. Indeed, the term 'Debt' as defined under Section 3 (11) of the I & B Code, refers to a sum i.e., due from any person, including the 'Corporate Debtor'. Also that, the words 'Employed' in the definiti....
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....y other company (i.e., to say the 'Holding Company') means a 'Company' in which the 'Holding Company' (i) Controls the composition of the Board of Directors (or) (ii) Exercises or Controls more than one half of the (total voting power) either at its own or together with one or more of its Subsidiary Companies, etc. Inter-Corporate Deposit: 57. An 'Inter-Corporate Deposit' basically bare interest obligation by the accepting 'Organisation / Entity'. An 'Inter-Corporate Deposit' is an 'Unsecured Borrowing' by the Companies and the Financial Institutions for other 'Corporate Entities', registered under the Companies Act, 2013, dependent upon 'Personal Contracts'. A 'Corporate' having a surplus fund will lend to another 'Corporate', which is in requirement of 'Funds'. Loan & Investment by Company: 58. The term 'Loan' means a 'Lending', delivery by 'One Party' to and receipt of a 'Sum' by 'another Company' upon 'Agreement','express' or 'implied' to 'Repay' it with or without 'Interest'. The core feature of a 'Loan' is the 'Advance of Money' / any 'Article', upon an 'Undertaking' that it shall be 'Returned' and it may or may not carry any 'Interest'. 59. Section 186 of the ....
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....it' of Rs.5 Crore to the Principal, pursuant to the 'ICD Agreement' the 'Guarantor' irrevocably and unconditionally guarantees to the 'Beneficiary' ('GEM') that due and punctual observance and performance by the Principal of all his obligations under or pursuant to the 'ICD Agreement' and agrees to pay to the 'Beneficiary' from time to time on demand all sums of money which the Principal is at any time liable to pay the 'Beneficiary' under or pursuant to the 'ICD Agreement' and which have become 'due and payable' but have not been paid such demand is made (vide Clause 3 of the 'Corporate Guarantee' dated 29.03.2012). 65. A mere perusal of the Clause 4.1 of the 'Corporate Guarantee' dated 29.03.2012 indicates that the obligation of the 2ndRespondent/Guarantor (LHW) proceeds to the effect that the obligation of the 'Guarantor' contained in this Guarantee shall be in addition to and independent of every other security which the Beneficiary may any time hold in respect of any of the principles obligations under 'ICD Agreement'. 66. In fact, Clause 4.2 of the 'Corporate Guarantee' executed by the Guarantor / 2nd Respondent (LHW) to and in favour of the 1st Respondent/Financial Cre....
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....he 1st Respondent/GEM, as seen from the 'ICD' dated 19.03.2012 executed between the 'Financial Creditor' and the 'Corporate Debtor'. 72. It is the well settled proposition of law that (i) the existence of 'Debt' and (ii) 'Default' are to be there for an 'admission' of an 'Application', filed under Section 7 of the I & B Code, 2016. 73. An 'interest' amounted to 'consideration' for the 'time value of money', when an amount is raised by a 'Borrower' through a 'Promissory Note' or 'Issue of Bond(s)' or 'Debenture(s)', 'Loan Stock' or 'any similar kind of instrument(s)', certainly it is a 'Financial Debt', as per definition Section 5 (8) of the I & B Code, 2016. 74. In the instant case, the reference made pertaining to the Arbitration Proceedings, etc, are not germane for deciding the 'Application' filed under Section 7 of the Code. There is no provision which bars referring to the Code, if already relief was sought for or pending in another Forum. In fact, Section 238 of the I & B Code, 2016, shall have effect notwithstanding anything inconsistent therein contained in any other 'Law' for the time being inforce or any instrument having effect by virtue of any such 'Law'. Besid....
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....gy Park Private Limited' was established clinchingly on the side of the '1st Respondent/Petitioner/Financial Creditor' and further in the teeth of the 'Corporate Guarantee' being executed by the '2nd Respondent/Corporate Debtor' (M/s. Lepakshi Heritage Wellness Village Pvt. Ltd.) to and in favour of the '1st Respondent/Petitioner/Financial Creditor' guaranteeing the repayment of the 'sum' transferred by the '1st Respondent/Petitioner/Financial Creditor' to the '2nd Respondent/Borrower' (M/s.Lepakshi Science and Technology Park Pvt. Ltd.) in CP(IB)/98/BB/2021 and the factum of same being invoked was established (on the side of the 1st Respondent/Petitioner/Financial Creditor), in the present case, the view arrived at by the 'Adjudicating Authority' in admitting the main CP(IB)/107/BB/2021, declaring 'Moratorium' and appointing the 'Interim Resolution Professional' are free from legal flaws. Resultantly, the instant 'Appeal' is devoid of merits and it fails. Background(in Company Appeal (AT) (CH) (INS) No. 216 of 2022): 79. The Appellant / Shareholder of the 2nd Respondent / Corporate Debtor (M/s. Lepakshi Knowledge Hub Private Limited, Bangalore, Karnataka, through its Directo....
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....ult is in respect of a financial debt owed to any financial creditor of the corporate debtor - it need not be a debt owed to the applicant financial creditor. Under Section 7(2), an application is to be made under sub-section (1) in such form and manner as is prescribed, which takes us to the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. Under Rule 4, the application is made by a financial creditor in Form 1 accompanied by documents and records required therein. Form 1 is a detailed form in 5 parts, which requires particulars of the applicant in Part I, particulars of the corporate debtor in Part II, particulars of the proposed interim resolution professional in Part III, particulars of the financial debt in Part IV and documents, records and evidence of default in Part V. Under Rule 4 (3), the applicant is to dispatch a copy of the application, filed with the adjudicating authority by registered post or speed post to the registered office of the corporate debtor. The speed, within which the adjudicating authority is to ascertain the existence of a default from the records of the information utility or on the basis of evidence furnished by the finan....
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....Financial Creditor in the instant C.P. Accordingly, it is submitted that the true nature of the transaction was to invest in the Respondent/Corporate Debtor Company, and to purchase the shareholding. Advancing the money through the Inter Corporate Deposit was also part of the said investment scheme. 18. On the other hand, the Learned Senior Counsel appearing for the Petitioner submits that the Inter Corporate Deposit is an independent transaction and cannot be treated as part of any action or document in pursuance of the Memorandum of Understanding dated 07.01.2022 executed between the Petitioner and a third party. 19. We find force in the submissions made by the Learned Senior Counsel appearing for the Petitioner/Financial Creditor. The Memorandum of Understanding dated 07.01.2022, on which the Respondent placed reliance was admittedly executed between the Petitioner and a separate legal entity known as M/s. Lepakshi Knowledge Hub Private Limited. Further, the amount received by the Respondent/Corporate Debtor under the subject Inter Corporate Deposit dated 19.03.2022was not for purchasing of any shares by the Petitioner in the Respondent Company. On the other ha....
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.... Appellant's Contentions (in CA (AT)(CH) (INS) No. 216 of 2022: 81. The Learned Counsel for the Appellant (M/s. Lepakshi Knowledge Hub Private Limited) submits that the 'Adjudicating Authority' ('National Company Law Tribunal', Bengaluru Bench) had committed an error at the time of passing the 'impugned order' on 03.06.2022 in CP(IB)/98/BB/2021 in not adverting to all the relevant materials available before it, which has resulted in serious miscarriage of justice. 82. According to the Learned Counsel for the Appellant the 'Adjudicating Authority' had failed to appreciate that the rationale behind including even 'disputed claims' in Section 7 of the I& B Code, 2016, has no applicability to the composite commercial transactions, wherein it is quite common that one of the terms of reciprocal promises may include a momentary advancement of money for interest. 83. The Learned Counsel for the Appellant projects an argument that the 'Adjudicating Authority' had failed to take into consideration and appreciate that in eight years, since the 'Memorandum of Understanding' and until the malicious litigation in a belated manner by the 1st Respondent/Financial Creditor/Petitioner and ....
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....ill date. Moreover, the 1st Respondent/Financial Creditor had backed out from the transaction, possibly to disassociate from the criminal allegations. Apart from this, the 'transaction' was considered as failed and abandoned and no one considered the 'transaction' as a subsisting one. 90. The Learned Counsel for the Appellant proceeds to point out that the 'impugned order' passed by the 'Adjudicating Authority' in admitting the 'Application' filed by the 1st Respondent/Financial Creditor/Petitioner (under Section 7 of the I & B Code) is quite contra to the decision of the Hon'ble Supreme Court of India in Indus Biotech (P) Ltd V Kotak India Venture ('Offshore') Fund (2021) 6 SCC 436. 91. The Learned Counsel for the Appellant contends that the 'Adjudicating Authority' must examine the totality of transaction to see whether 'Default' can be the only 'Irresistible Conclusion'. 92. The Learned Counsel for the Appellant brings it to the notice of this 'Tribunal' that the 2nd Respondent / M/s. Lepakshi Science and Technology Park Private Limited in its 'Reply' to CP(IB)/98/BB/2021 (filed by the 1st Respondent/Financial Creditor/Petitioner) at paragraph 16, had mentioned that 'as....
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....act, the Project was conceived as an integrated project to provide integrated infrastructural support to University Clusters, Science and Technology Parks, etc. 97. It is represented on behalf of the 2nd Respondent that the Appellant/LKH submitted an 'Application to the Andhra Pradesh Industrial Infrastructure Corporation ('APIIC') which was the Nodal Agency in Andhra Pradesh to provide lands for industrial and infrastructure development. The Government of Andhra Pradesh and Andhra Pradesh Industrial Infrastructure Corporation had provided 884 Acres of land to the Appellant at Chilamattur and Gorantla in Ananthapur District, Andhra Pradesh and later, the Appellant / LKH paid the necessary sale consideration and subsequently the Andhra Pradesh Industrial Infrastructure Corporation had executed numerous Registered Sale Deeds conveying the total land to the Appellant. 98. The Learned Counsel for the 2nd Respondent points out that in the year 2011, the negotiations took place between the 1st Respondent/Financial Creditor and the Appellant to enable the 1st Respondent/Financial Creditor/Petitioner to take part in a part of the Project. It was agreed upon that 2650 Acres out of tot....
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....unsel for 2nd Respondent / LST adverts to the fact that the 1st Respondent/Petitioner and M/s. Lepakshi had entered into several ancillary agreements being 'Inter-Corporate Deposit Agreement' dated 19.03.2012, 'Corporate Guarantee' dated 29.03.2012 and an 'Escrow Agreement' dated 16.04.2012. Because of the expiry of 'Memorandum of Understanding' and owing to the non performance of the 1st Respondent/Financial Creditor/Petitioner, the parties had considered that the old transaction failed and all the agreements paled into insignificance without any legal effect. 103. According to the 2nd Respondent / LST, the sum of Rs.5 Crores transferred from the 1st Respondent/Financial Creditor/Petitioner to the 2nd Respondent/LST was only in respect of the cost of land transfer from the Appellant to the 2nd Respondent/LST and the LHW. As per the stand of the 1st Respondent/Petitioner, the aforesaid Rs. 5 Crore was to be adjusted in the 'sale consideration' to be paid by the 1st Respondent/Financial Creditor/Petitioner to the 'Lepakshi' Group. 104. The Learned Counsel for the 2nd Respondent contends that the 1st Respondent/Petitioner had not chosen to implement the 'Memorandum of Understan....
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....for the 2nd Respondent / LST points out that the 1st Respondent/Financial Creditor/Petitioner never asserted any rights in regard to the validity of the 'Memorandum of Understanding' and for the first time the 1st Respondent/Petitioner wrote emails and letters to the Indu Project Limited's Resolution Professional claiming that it is 100% 'Equity Shareholders' of 'LST' and 'LHW'. In fact, the 1st Respondent/Petitioner through a Letter dated 19.09.2020, addressed to M/s. Lepakshi claimed that it is 100% Shareholder of 'LST' and 'LHW' and that the 'Memorandum' was binding after 8 years and claimed the sum of Rs.5 Crores with 18% interest per annum, etc. As a matter of fact, the series of events and pleadings in litigation were not detailed and only some facts for the purpose of these proceedings were mentioned. 110. The Learned Counsel for 2nd Respondent / LST submits that the 1st Respondent/Petitioner had invoked the 'Arbitration' on 02.12.2020 and ultimately the 'Arbitration Tribunal' was formed and the said 'Tribunal' granted interim relief qua limited to the shares held in 'Escrow'. 111. The Learned Counsel for 2nd Respondent / LST contends that the 1st Respondent/Petitioner....
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....Proponent in terms of the MoU that the Project Proponent was in the process of transferring 2000 acres and 650 acres of land to the Corporate Debtor and the Guarantor. * Under the MoU with the Project Proponent the Financial Creditor agreed to purchase 100% equity shareholding in the Corporate Debtor and the Guarantor for a total consideration of Rs,2,38,50,00,000/-. It was agreed that within 5 days from the date of MoU the Financial Creditor shall forward an amount of Rs.5,00,00,000/- (Rupees Five Crores) to the Corporate Debtor through an inter corporate deposit or a similar instrument. Consequent to this the ICD was entered into. * The purpose of the ICD was solely for payment of agreed amount of stamp duty for transfer of 2,650 acres of land from the Project Proponent to the Corporate Debtor and the Guarantor. The term of the ICD was set as 6 months with an interest of 18% per annum after the term of the ICD. Further consequent to the ICD on 29.03.2012 the Guarantor had executed a corporate guarantee (''Guarantee'') in favour of the Financial Creditor guarantying repayment of the amount transferred by the Financial Creditor to the Corporate Debtor. * On 16.04.2012 the ....
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....st Amount Due''). Compound Interest at the rate of 18% was payable from 21.09.2012. * The calculation of the Outstanding Principal Amount and the Outstanding Interest is provided and filed in a tabular format in this present Application. * The total amount due and payable by the Corporate Debtor including the Outstanding Principal Amount and the Outstanding Interest Amount stands at Rs.25,84,94,000/- (Rupees Twenty Five Crores Eight Four Lakhs Ninety Four Thousand Only) (also referred to as the ''Total Amount Due and Payable''). The detailed tabular working is provided below: S. No. Particulars Amount 1 Outstanding Principal Amount Due Rs.5,00,00,000/- 2 Compound Interest of 18% per annum on Principle Amount from 21.09.2012 till date Rs.20,84,94,000/- Total Amount Due and Payable Rs.25,84,94,000/- 114. In the instant case, it is pertinently pointed out by this 'Tribunal' that the 'Memorandum of Understanding' dated 07.01.2012 was entered into between the 1st Respondent/Financial Creditor/Petitioner and the Appellant/Lepakshi Knowledge Hub Private Limited. It is latently and patently quite clear that the money r....