National Company Law Appellate Tribunal
Utsav Securities Pvt. Ltd vs Sunworld Luxury Suites Pvt. Ltd on 16 August, 2022
NATIONAL COMPANY LAW APPELLATE TRIBUNAL PRINCIPAL BENCH, NEW
DELHI
Company Appeal (AT) (Ins.) No. 1084 of 2020
&
I.A No. 2774 of 2022
IN THE MATTER OF:
Utsav Securities Pvt. Ltd. ....Appellant
Vs.
Sunworld Luxury Suites Pvt. Ltd. ....Respondent
Present:
For Appellants: Mr. Kartikeya Singh, Adv.
For Respondent: Mr. Anshum Jain, Adv.
ORDER
(Per: Justice Rakesh Kumar Jain) 16.08.2022: This appeal is filed by the Financial Creditor whose application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (in short 'Code') against the Corporate Debtor has been dismissed by the Adjudicating Authority (National Company Law Tribunal, New Delhi, Bench V) on 27.05.2020.
2. It is alleged that the Appellant is a non-banking financial company, registered with the Reserve Bank of India, is engaged in the business of loans and financing whereas the Respondent is in the business of developing luxurious high-end properties.
3. It is alleged that the Appellant had advanced a loan of Rs. 60,00,000/- to the Respondent through RTGS dated 25.10.2016 on an oral understanding on interest @ 10 % per annum.
4. It is alleged that the Respondent had confirmed the outstanding dues amounting to Rs. 62,57,129/- vide letter dated 01.04.2017 and even deducted TDS on 20.10.2017 on the interest payable on the unsecured loan advanced by the Appellant. However, application filed by the Appellant was dismissed by the impugned order on the ground that the amount in question does not fall within the definition of financial debt and the Appellant is not the Financial Creditor. Therefore, application filed under Section 7 was found not maintainable.
5. Counsel for the Appellant, at the outset, has pointed out that I.A. No. 2774 of 2021 has been filed under Order XLI, rule 27 of the CPC, 1908 read with Rule 11 and 131 of the NCLT, Rules, 2016 to adduce additional evidence. The Appellant wanted to bring on record the statement dated 31.07.2018 of Yogender Kumar Gupta, the Director of the Respondent Company which was recorded under Section 50 of the PMLA, 2002 at the Delhi Zonal Office of the Enforcement Directorate. It is submitted that on pertinent question as to how he knows about the Appellant Company, he had answered that this company is engaged in the business of finance and their company has also availed the financial assistance. Notice in the application is issued which is accepted by the Respondent in Court.
6. Counsel for Respondent has submitted that this statement is dated 31.07.2018 whereas the impugned order has been passed on 27.05.2020, therefore, it was well within their knowledge and cannot be produced as additional evidence.
7. We have heard counsel for the parties in this regard and are of the considered opinion that the application bearing I.A. No. 2774 of 2021 deserves to be allowed because the statement which is sought to be placed on record is coming from the official record and is not manufactured. The only reason that the said statement was not produced before the Adjudicating authority is that the Counsel who had been appearing inadvertently failed to produce the same.
8. The application is allowed and the statement of Yogender Kumar Gupta dated 31.07.2018 is taken on record.
9. Counsel for the Appellant, while arguing the main appeal has submitted that the Adjudicating Authority has committed a patent error in dismissing the application whereas Counsel for Respondent has submitted that the Adjudicating Authority has made a reference to Section 179 and 186 of the Companies Act, 2013 to hold that there is no resolution passed by the board of directors of the Appellant Company to disburse the loan nor the Respondent Company to apply for the loan. It is further submitted that no timeline has been provided for the repayment of the said amount and as such he does not fall within the definition of Section 5(8) of the Code. Counsel for the Appellant has failed to answer the question of the Court in this regard and hence, the amount given to the Respondent can be some kind of a debt but not the financial debt as defined under Section 5(8) of the Code and thus, the Appellant is also not a financial creditor, therefore, the application filed under Section 7, at the instance of the Appellant before the Tribunal is found not maintainable. No other point has been raised.
10. In view of the aforesaid facts and circumstances, there is hardly any ground in this appeal for taking a view different from one taken by the Adjudicating Authority and hence, the appeal is hereby dismissed. No costs.
[Justice Rakesh Kumar Jain] Member (Judicial) [Dr. Alok Srivastava] Member (Technical) sc/rr