TaxTMI 
TaxTMI 
2025 (11) TMI 1204
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....between 18.03.2019 to 12.07.2019. The Corporate Debtor has given post dated cheques in lieu of the disbursement. The post dated cheques were dishonoured. The Corporate Debtor by letter dated 25.07.2019 requested the Financial Creditor to return the post dated cheques furnished to it and to collect post dated cheques as there has been change in the authorised signatory of the Bank account of the Corporate Debtor. The Corporate Debtor has paid an amount of Rs. 3,55,067/- between 18.03.2019 to 19.07.2019 on account of interest on the loan advanced to it. Respondent has also deposited TDS on the interest paid with the Income Tax Department up to June 2019. The Financial Creditor issued demand notice dated 24.09.2019 demanding amount with interest. No payment having been paid by the Corporate Debtor, Section 7 application was filed on 18.11.2019. Reply was filed to Section 9 application to which rejoinder was also filed. Adjudicating Authority by the impugned order dated 31.03.2022 although accepted the disbursement made by the Financial Creditor of Rs. 1,60,00,000/, however, rejected the application observing that the intention of the parties is not clear and the Financial Creditor bei....
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....ty on the ground that intention of the parties is not clear is unsustainable. 5. Shri Abhishek Anand, Learned Counsel for the Respondent refuting the submissions of the Appellant submits that the disbursement of Rs. 1,60,00,000/- is not denied in the present case. It is submitted that the Appellant being NBFC it is obliged under the provisions of the RBI Act, 1934 and Circular issued by the RBI including Circular dated 01.07.2015 to have conveyed in writing to the borrower a sanction letter or otherwise the amount of loan sanctioned along with terms and conditions including annualised rate of interest, NBFC have not done so. Adjudicating Authority has rightly rejected Section 7 application. The Circular issued by the IBBI which are nature of guidelines are mandatory and statutory in character. There being absence of written agreement, the amount given to the Corporate Debtor cannot be classified as financial debt under Section 5(8). In alternative, it is submitted that the arrangement stood novated by the conduct of the parties. Respondent has paid the entire interest for total period of 120 days and as per the oral arrangement between the parties, old cheques were asked to be r....
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....need to be commercial borrowing and the disbursement should be for time value or money. The borrowing by the Corporate Debtor was commercial borrowing which disbursement was for the time value of money since the interest @ of 8% is an admitted fact between the parties as is clear from the pleadings. We are unable to subscribe to the view of the Adjudicating Authority that intention of the parties is not clear from the material of the record. In paragraph 8 of the impugned order, the Adjudicating Authority itself has noticed the copies of the bank statements of the Financial Creditor, confirmation of the accounts, Form No.16A for the assessment year 2019-20 dated 17.06.2019 which reflected payment of interest. It is true that Form 16A itself cannot be a basis for declaring a transaction to be financial debt but Form 16A corroborates the case of the Financial Creditor that disbursement was for time value of money and interest on loan was paid. The Corporate Debtor's letter regarding confirmation of an account dated 01.04.2019 which has been relied is referred to in paragraph 8 of the impugned order itself had contained entry of interest of loan. It is useful to notice letter dated 01....
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....oan Dear Sir, We Confirm to accept Rs. 20,00,000.00 (Rupees Twenty lacks Only) as Loan from you for the period 19-03-2019 to 16-07-2019 for 120 days @8% p.a. We are sending you herewith following cheques (payable at Kolkata /At Par) in your favour towards repayment of the principal and interest (net of TDS @10%) on due date for the above referred Loan. Cheque No. Cheque Date Amount Cheque Drawn On 000133 17-07-2019 20,00,000.00 HDFC 000134 30-03-2019 5,129.00 HDFC 000135 16-07-2019 42,214.00 HDFC The above referred cheques are accepted by our director on behalf of the company within their power to do so. Thanking you, Yours Truly, For A B C FLOORS PRIVATE LIMITED" 11. These are all documents which are on the record of the Adjudicating Authority. Counsel for the Appellant has relied on judgment of this Tribunal in "Agarwal Polysacks Ltd. vs. K. K. Agro Foods & Storage Ltd.- CA(AT)(Ins) No. 1126 of 2022" where it was held by this Tribunal that requirement of written financial contract between the parties is not pre-condition for accepting an amount as a financial debt. 12. Now ....
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.... (c) NBFCs should release all securities on repayment of all dues or on realisation of the outstanding amount of loan subject to any legitimate right or lien for any other claim NBFCs may have against borrower. If such right of set off is to be exercised, the borrower shall be given notice about the same with full particulars about the remaining claims and the conditions under which NBFCs are entitled to retain the securities till the relevant claim is settled/paid." 13. The submission of the Respondent is that the guidelines of the RBI are mandatory which has been held by the Hon'ble Supreme Court in "Nedumpilli Finance Company Limited vs. State of Kerala and Ors.- (2022) 7 SCC 394". It is submitted that the said guidelines have been issued by RBI under Section 45 (JA) of the RBI Act, 1934. There can be no dispute to the submission of the Respondent that guidelines issued by the RBI are statutory and required to be followed by the NBFC. Reliance has been placed on paragraphs 48 and 50 of the judgment which are as follows:- "48. It is too long in the day to dispute the fact that the directions issued by RBI are statutory in character and binding on all NBFCs. I....
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....reflected from bank statement and other materials which have been referred in paragraph 8 of the impugned order, as noted above. Even if there is no financial contract exists between the parties, Court is not precluded from looking into the real nature of transaction which can be proved by the Financial Creditor from the materials brought on the record. In the present case, Financial Creditor has brought sufficient material on record to prove that transaction between the parties was a financial debt. 16. We need to notice another submission which has been advanced by the Respondent is that the contract between the parties was novated by letter dated 17.09.2019 which was written by the Corporate Debtor by which new post dated cheques were sent to the Corporate Debtor which were all post dated upto 31.03.2022. The said letter has been brought on the record of the Appeal at Page 103. 17. Reliance has been placed on the letter by the Counsel for the Respondent which letter itself mentioned the amount that Corporate Debtor has taken loan from the Financial Creditor with interest which is clear from the aforesaid letter itself which letter is at Page 117:- "To Sin....
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....have received your letter dated 17th September 2019 (copy enclosed as Annexure 2) along with some cheques, details of which is as follows: Serial No. Date of post dated cheque Cheque No. Cheque drawn on Amount (Rs.) 1 30-03-2020 044803 Axis Bank 1,500,000 2 30-09-2020 044807 Axis Bank 1,000,000 3 31-10-2020 044808 Axis Bank 500,000 4 30-03-2021 044810 Axis Bank 1,500,000 5 30-06-2021 002249 Axis Bank 4,000,000 6 31-12-2021 002250 Axis Bank 4,000,000 7 31-03-2022 002252 Axis Bank 3,500,000 In the letter, it is also mentioned that the loan given by our Company Sinki Commodities Private Limited to your Company A B C Floors Private Limited is interest free which is highly objectionable and not desirable. In this regard, kindly note that as per earlier agreed terms for the short term loan, interest was @ 8% per annum which has been paid by your Company upto 31st March, 2019. The contents of your letter are not acceptable to us. Considering both the letters, our Board of Directors have decided to call back our short term loans given to your Company Immediately.....