2026 (2) TMI 743

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.... Mr. Udai Chandani, Mr. Shivam Kumar, Ms. Upasana Singh, Advocates JUDGEMENT Per Justice N. Seshasayee, Member (Judicial) Challenging an Order of the Adjudicating Authority (NCLT - II, Mumbai) dated 04.08.2023, dismissing a petition under Sec. 7 IBC, and at any rate the right to claim is barred by limitation, the purported financial creditor is now before us. The issue in short is, if there exists a financial debt. The Facts: 2. The material facts relevant for the current purpose are now stated: a) Following the request of the corporate debtor- the respondent herein, the appellant had invested a sum of Rs. 55.0 lakhs in the former. That was between February, 2015 and June, 2015. The payment and receipt of the amount ....

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....016, the appellant had written to the respondent to release the deposits made by the former. Then on 01.05.2017, the appellant had written to the respondent in which he had underscored that "the above deposits, as of today have assumed the character of unsecured deposits received by the company from general public." As the "original plan to induct us as shareholders, has failed." e) According to the appellant, there was change of director at the helm of affairs of the respondent and that the new director of the respondent had promised return of the deposit, which he has recorded in his communication dated 07.10.2017 to the new director of the respondent. f) Accordingly, what had commenced as an investment for purchase of s....

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.... 5. The Adjudicating Authority was persuaded by the plea of limitation and dismissed the petition. Though in paragraph 10 of its Order where the Adjudicating authority purports to detail the defence taken by the respondent, it did touch upon the issue if share-purchase money would constitute a financial debt, yet in the operative portion, it overlooked it and did not give a pointed finding. Arguments: 6. The arguments are predictable and they merely touched upon two aspects: (a) whether the money initially invested by the appellant constituted a deposit as to fall within the definition of financial debt under Sec. 5(8) IBC; and if the petition filed under Sec. 7 is time barred. 7. The learned counsel for the appellant submitted ....

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....espondent when it was under the erstwhile management and an investment for purchase of shares does not constitute a financial debt within the meaning of Sec. 5(8) of the Code and hence a proceeding under sec. 7 of the IBC can neither be maintained nor sustained. The learned counsel then proceeded to adopt the stands of the respondent vis-à-vis the point of limitation which it adopted before the Adjudicating Authority. Discussion & Decision 9. That the appellant has essentially made an investment for purchase of shares in the respondent is established beyond debate, for the very correspondences which the appellant had written to the respondent and which the appellant relies on, themselves evidence it. For facts, refer to paragra....