National Company Law Appellate Tribunal
Gajendra Investment Limited vs Bley Noir Infrastructure Development ... on 12 January, 2023
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NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH,
NEW DELHI
Company Appeal (AT) (Ins.) No. 990 of 2021
IN THE MATTER OF:
GAJENDRA INVESTMENT LTD.
A company incorporated under the Companies Act, 1956
And having its registered office at: Aidun Building,
Near Metro Cinema, 1st Dhobi Talao Lane,
Mumbai, Maharashtra - 400002 ...Appellant
Versus
BLEU NOIR INFRASTRUCTURE DEVELOPMENT PVT. LTD.
(Formerly known as Satra Infrastructure Development Pvt. Ltd.),
A company incorporated under the Companies Act, 1956
And having its registered office at Dev Plaza, 2nd Floor, Opp.
Andheri Fire Station, S.V. Road, Andheri West, Mumbai,
Maharashtra - 400 058 ...Respondent
Present:
For Appellant: Mr. Aayush Agarwala, Mr. SiddhamNahata, Advocates
For Respondent: Mr. Abjijeet Sinha, Mr. Malak Bhatt, Mr. Rajat Bector,
Advocates
JUDGMENT
Pre: Justice Rakesh Kumar Jain:
This appeal is directed against the order dated 20.08.2021, passed by the Adjudicating Authority (National Company Law Tribunal, Mumbai Bench, Court- III) by which an application filed by the Appellant (Financial Creditor) under Section 7 of the Insolvency and Bankruptcy Code, 2016 (in short 'Code') r/w Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rule, 2016 (in short 'Rules') against the Respondent (Corporate Debtor) in respect of an amount of Rs. 1,72,93,199/- was dismissed primarily on the ground of limitation and also raised doubt about the existence of the outstanding debt and default.
Company Appeal (AT) (Ins.) No. 990 of 2021 2
2. Shorn of unnecessary details, the case set up by the Appellant is that the Respondent availed a sum of Rs. 98 Lakhs as Inter Corporate Deposit (ICD) from the Appellant orally and undertook to pay it on demand with interest @ 12% per annum. Accordingly, on 28.01.2015, the Appellant disbursed loan to the Respondent through RTGS, which is allegedly reflected in the ledger of the Appellant wherein the account of the Respondent is maintained. The application under Section 7 of the Code was filed in Form- 1, prescribed under Rule 4(1) of the Rules, in which it is mentioned in part IV that a total amount of debt outstanding as on 31.05.2019 is Rs. 1,72,93,199/- and the default had occurred on 23.06.2019. The Application was filed on 27.01.2020. The Appellant has made specific averments in respect of the limitation in Para 8 of the application dated 27.01.2020 which is reproduced as under:-
"8. The present petition is filed within the period of limitation. The last amount TDS deposited by the CD with Income Tax Department was on 04.06.2017 of Rs. 1,32,528/-, therefore, the present petition is filed within the period of limitation. Also the CD has sent his last email on 09.10.2018 requesting the FC confirming the TDS amount and requesting the FC to deposit the TDS with Income Tax Department. Thus the present petition is filed within the period of limitation. Interest is charged @18% p.a. compounded yearly on 31st March every year as orally agreed between the CD and the FC. As per mutual discussion rate of interest was revised to 18% p.a. from 01.04.2016. The CD has not raised any objection to the demand notice dated 19.06.2019, this also confirms the oral understanding of rate of interest of 18%."
3. In order to prove that the application is within the period of limitation, the Appellant primarily relied upon the TDS deposited by the Respondent on the amount of interest with the Department of Income Tax for the year Company Appeal (AT) (Ins.) No. 990 of 2021 3 ended on 31.03.2015, 31.03.2016 and 31.03.2017 reflected in Form 26AS. However, the Adjudicating Authority found that neither interest was paid by the Respondent w.e.f. 01.04.2016 onwards nor the principal amount and the application filed on 27.01.2020 was barred by limitation as it has to be filed within the period of three years from the date of default.
4. Counsel for the Appellant has submitted that the very fact that TDS has been paid by the Respondent in terms of Section 194A of the Income Tax Act, 1961 and is shown by the Appellant in Form 26AS, has to be considered as part of payment much less the acknowledgment. But at the same time, he has admitted that there is no binding precedent to cite that deduction of the TDS from the interest component shall be considered as part payment for the purpose of extending the period of limitation.
5. In reply to this argument, Counsel for the Respondent has relied upon two decisions of this Tribunal rendered in CA (AT) (Ins) No. 713 of 2019 'Prayag Ploytech Pvt. Ltd. Vs. Gem Batteries Pvt. Ltd.' decided on 24.09.2019 and CA (AT) (Ins) No. 251 of 2020 'Pawan Kumar Vs. Utsav Securities Pvt. Ltd.' decided on 03.08.2021.
6. We have heard Counsel for the parties on this issue.
7. There is no dispute that the Appellant has placed on record Form 26AS and has made a reference to the TDS deposited by the Respondent in terms of Section 194A of the Income Tax Act, 1961 but it would not be suffice to hold that it pertains to the income of interest of the Appellant on the amount which was alleged to have been advanced orally. In decision of the case of Prayag Ploytech Pvt. Ltd. (Supra) it has been held that deduction Company Appeal (AT) (Ins.) No. 990 of 2021 4 of TDS itself is not sufficient to conclude the transaction. Similar view has been taken in the case of Pawan Kumar (Supra). Hence the argument raised by Counsel for the Appellant is hereby rejected.
8. The second contention of the Appellant is about the part payment of Rs. 10 lakhs, purported to have been made by the Respondent on 27.09.2017, reflected in the ledger. It is also submitted that the ledger is a part of the application filed under Section 7 of the Code and in this regard, reference has been made to Para 6 of the averments made in the application filed under Section 7.
9. In answer, Counsel for Respondent has submitted that no case has been set up by the Appellant in the pleadings that Rs. 10 Lakh was paid towards the part payment of amount in question because of which the period of limitation has again started to run. In this regard, he has relied upon the decisions of the Hon'ble Supreme Court in the case of Babulal Vardharji Gurjar Vs. Veer Gurjar Aluminium Industries Pvt. Ltd. & Anr., (2020) 15 SCC 1 and Asset Reconstruction Company (India) Limited Vs. Bishal Jaiswal & Anr., (2021) 6 SCC 366 to contend that the question of limitation is essentially a mixed question of law and facts and when a party seeks application of any particular provision for extension or enlargement of the period of limitation, the relevant facts are required to be pleaded and requisite evidence is required to be adduced.
10. We have considered the respective contentions of Counsel for the parties in this regard and found that the Respondent has nowhere admitted that this amount of Rs. 10 Lakh was paid towards part payment of the Company Appeal (AT) (Ins.) No. 990 of 2021 5 amount due nor the Appellant has set up a case in the pleadings that the said amount has been paid as part payment on 27.09.2017, during the currency of the period of limitation and thus the period of limitation has further extended for the period of three years from the said date. Moreover, it is argued by Counsel for Respondent that Section 19 of the Limitation Act. 1963 talks of the effect of the payment on account of debt when acknowledged is in writing and signed. In this regard, he has relied upon the case of Shanti Conductors Pvt. Ltd. Vs. Assam State Electricity Board & Ors., (2020) 2 SCC 677.
11. We have considered the contention of Counsel for the parties in this regard and are of the considered opinion that the Appellant has miserably failed to prove that the amount of Rs. 10 Lakh, reflected in the ledger account was paid by the Respondent towards the part payment of the amount due (in question) in order to extend the period of limitation of three years from the said date i.e. 27.09.2017 specially in the absence of the evidence of any writing in this regard or otherwise an admission of the Respondent who has categorically denied the same in its reply. The Appellant has specifically pleaded about the application having been filed within the period of limitation in Para 8 of the application in which there is no averments in regard to the part payment of Rs. 10 Lakh having been made by the Respondent towards the amount in question. Therefore, second contention of the Appellant in respect of extension of period of limitation is hereby rejected.
Company Appeal (AT) (Ins.) No. 990 of 2021 6
12. The last contention of the Appellant is about the acknowledgement of the debt in the balance sheet of the Respondent. In this regard, he has categorically admitted that the balance sheet as such is not on record rather he has relied upon a note in the balance sheet which read as under:
"(i) During the year ended 31.03.2019, the Company has not made provision for interest on loans from Mayank Shah Group (MJS Group) including its associates entitles on account of agreed understanding recorded in minutes of meeting dated January, 31, 2018 (and various subsequent meetings and events) between the company and MJS Group. Accordingly, the company has not made provision for interest of INR 11,01,689/- for the year ended March 31, 2019 and the company has reversed the interest for the period from February 1, 2018 to March 31, 2018 amounting to INR 1,63,471/-. The matter is in dispute and subjudice at group level. According to the management of company, loan taken from Gajendra Investment Pvt. Ltd. (Including interest, if any) has been settled on account of agreed understanding recorded in minutes of meeting dated 31st January, 2018 (and various subsequent meetings & events) between Satra Group, IIFL Group and MJS Group."
13. On the basis of aforesaid note, it is argued that in the year ended 31.03.2019 the Respondent had not made any provision of interest on loan because of the settlement between the parties. In this regard, Counsel for the Respondent has submitted that the acknowledgement with a caveat or a qualification is not the acknowledgement because it has to be in unequivocal terms. From the perusal of the note, referred to above, it is evident that there is no acknowledgement or acceptance of the debt within that period when the application would have been within the period of limitation because the same is not unequivocal.
14. Thus, in our considered opinion, the Appellant cannot take the advantage of the note for the purpose of brining the application filed under Company Appeal (AT) (Ins.) No. 990 of 2021 7 Section 7 within the period of limitation. The contention of the Appellant in this regard as well is hereby rejected.
15. Since, all the contentions of the Appellant have been rejected, having not been found reliable in accordance with law for the purpose of extension of period of limitation, therefore, it is hereby held that the application filed under Section 7 by the Appellant was barred by limitation and has rightly been dismissed by the Adjudicating Authority on this ground.
16. Since, we have dismissed the appeal, upholding the findings of the Adjudicating Authority on the issue of limitation against the Appellant, therefore, there is no question of going into the merits of the case. Consequently, finding no merit in the present appeal, the same is hereby dismissed, though without any order as to costs.
[Justice Rakesh Kumar Jain] Member (Judicial) [Mr. Naresh Salecha] Member (Technical) New Delhi 12th January, 2023.
Sheetal Company Appeal (AT) (Ins.) No. 990 of 2021