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2022 (6) TMI 1288 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - time limitation - HELD THAT - The Memorandum of Understanding dated 07.01.2012 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 19.03.2012 was not for purchasing of any shares by the Petitioner in the Respondent Company - The Petitioner/Financial Creditor is able to prove the debt and default by placing reliance on various documents enclosed to the instant company petition. Whether the present application is filed within limitation? - HELD THAT - As the Corporate Debtor admittedly not repaid the amount received under Inter Corporate Deposit within the specified period the Financial Creditor/Petitioner recalled the Inter Corporate Deposit amount along with 18% interest from the Corporate Debtor/Respondent vide recall letter dated 19.09.2020. The instant C.P. was filed on 13.10.2021. The Corporate Debtor/Respondent has acknowledged the receipt of Rs. 5, 00, 00, 000/- (Rupees Five Crores only) from the Financial Creditors/Petitioners in its Balance Sheets from the Financial Years 2011-2012 to 2018-2019. Hence the C.P. is well within the period of limitation. Since the debt and default against the Principal Borrower was already held to be proved and since the execution of the Corporate Guarantee by the Corporate Debtor and the invocation thereof was also proved the instant C.P. is also liable to be admitted. Petition admitted - moratorium declared.
Issues Involved:
1. Whether the amount of Rs. 5 crore constitutes a financial debt under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016. 2. Whether the petition is barred by the law of limitation. 3. Whether the Petitioner's actions were malicious and an abuse of the legal process. 4. Whether the Corporate Debtor's liability under the corporate guarantee can be invoked. Issue-wise Detailed Analysis: 1. Whether the amount of Rs. 5 crore constitutes a financial debt under Section 7 of the Insolvency and Bankruptcy Code (IBC), 2016: The Tribunal examined whether the amount of Rs. 5 crore disbursed under the Inter Corporate Deposit (ICD) agreement qualifies as a financial debt. The Respondent argued that the amount was part of an investment scheme and not a financial debt. However, the Tribunal found that the ICD was an independent transaction, not linked to any investment or share purchase agreement. The Tribunal referred to the Hon'ble Supreme Court's decision in M/s. Innoventive Industries Ltd. vs. ICICI Bank & Anr., which clarified that a financial debt includes any liability or obligation in respect of a claim, even if disputed. The Tribunal concluded that the amount under the ICD qualifies as a financial debt. 2. Whether the petition is barred by the law of limitation: The Tribunal considered whether the petition was filed within the limitation period. The ICD was executed on 19.03.2012, with a tenure of six months. The Corporate Debtor failed to repay the amount, leading the Financial Creditor to recall the ICD on 19.09.2020. The petition was filed on 13.10.2021. The Tribunal noted that the Corporate Debtor acknowledged the debt in its balance sheets from 2011-12 to 2018-19, thereby extending the limitation period. Thus, the petition was deemed to be within the limitation period. 3. Whether the Petitioner's actions were malicious and an abuse of the legal process: The Respondent contended that the petition was malicious and an abuse of the legal process, attracting penalties under Section 65 of the IBC. The Tribunal rejected this argument, stating that the Financial Creditor had provided sufficient evidence to prove the debt and default. The Tribunal did not find any malicious intent or abuse of process by the Petitioner. 4. Whether the Corporate Debtor's liability under the corporate guarantee can be invoked: The Tribunal confirmed that the Corporate Debtor executed a corporate guarantee in favor of the Financial Creditor, guaranteeing repayment of the amount disbursed to the Principal Borrower. The Tribunal referenced the Hon'ble NCLAT's decision in State Bank of India vs. Athena Energy Ventures Private Limited, which allows the initiation of Corporate Insolvency Resolution Process (CIRP) against both the Principal Borrower and the Corporate Guarantor. Since the debt and default against the Principal Borrower were already proven, the Tribunal held that the Corporate Debtor's liability under the corporate guarantee could be invoked. Conclusion: The Tribunal admitted the petition under Section 7 of the IBC, initiating the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. A moratorium was declared under Section 14 of the Code, prohibiting the institution or continuation of suits, transferring of assets, and other specified actions against the Corporate Debtor. Shri Hemendra Paliwal was appointed as the Interim Resolution Professional (IRP) to take necessary steps as mandated under the IBC, including the constitution of the Committee of Creditors and filing regular progress reports to the Tribunal.
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