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2019 (3) TMI 1191 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHICorporate Insolvency Resolution Process - existence of financial debt - period of limitation for application u/s 7 - evidences of alleged debt and occurrence of alleged default - HELD THAT:- ‘IL&FS Financial Services Limited’- (‘Financial Creditor’) has disbursed the amount and the ‘Corporate Debtor’ has raised the amount with an object of having economic gain or commercial effect of borrowing. The clauses of ‘SPA’ if read along with the ‘LoU’, we find that the terms of transaction involved not only the purchase of shares but it shows the date by which the amount of transaction was to be repaid by the ‘Corporate Debtor’ which had fallen due on 19th August, 2012. There was an element of ‘time value of money’, particularly, when one of the conditions related to ‘internal rate of return of 15%’ on the transaction, therefore, the time value of money having already shown, we hold that the amount disbursed by ‘IL&FS Financial Services Limited’- (‘Financial Creditor’) and the ‘Corporate Debtor’ had agreed to reverse the transaction by purchasing the shares within a specified time along with the payment of 15% accrual on 20th August, 2009. We hold that the amount if disbursed by ‘IL&FS Financial Services Limited’- (‘Financial Creditor’) comes within the meaning of ‘financial debt’, therefore, the ‘IL&FS Financial Services Limited’- (‘Financial Creditor’) has been rightly claimed to be a ‘Financial Creditor’ and filed Form-1 under Section 7 of the ‘I&B Code’. Limitation - HELD THAT:- In the present case, it is not in dispute that right to apply under Section 7 accrues to ‘IL&FS Financial Services Limited’- (‘Financial Creditor’) since 1st December, 2016, when ‘I&B Code’ came into force. Therefore, the application under Section 7 being within the period of three years from the date of right to accrue the application, we hold that the application under Section 7 was well within the time. Whether the claim was barred by limitation or not? - HELD THAT:- There is a continuous cause of action and the ‘Corporate Debtor’ never raised the question of limitation and on the other hand, a reply vide letter dated 18th November, 2015 intimating that the suit is pending and therefore, to withdraw the petition. There being a continuous cause of action, we hold that the application under Sections 433 and 434 of the Companies Act, 1956 was not barred by limitation and the ‘Corporate Debtor’ cannot take plea that there is no debt payable in law. Abatement - whether application under Sections 433 & 434 of the Companies Act, 1956 on transfer abated, ‘IL&FS Financial Services Limited’- (‘Financial Creditor’) having failed to file Form-1 under Section 7 within 60 days i.e. by 5th February, 2017? - HELD THAT:- In view of the decision of the Hon’ble Supreme Court in “Zile Singh” (2004 (10) TMI 553 - SUPREME COURT), we hold that the case of the Appellants is covered by the Notification dated 29th June, 2017 and it having filed Form-1 on 25th May, 2017 i.e. immediately after transfer of the case, the petition under Sections 433 & 434 of the Companies Act, 1956 has not abated. In so far as the amended order dated 30th August, 2018 is concerned, under sub-section (2) of Section 420 of the Companies Act, 2013 read with National Company Law Tribunal Rules, it is always open to the Adjudicating Authority to make necessary correction in the order passed by it. It is not in dispute that the application under Section 7 was considered by Mr. M.K.Shrawat, (Member (Judicial) and Mr. Bhaskara Pantula Mohan, (Member (Judicial). The order dated 28th August, 2018 has been signed by one of the Members namely- Mr. M.K.Shrawat, (Member Judicial), the other Member who agreed and signed, having not shown therein, it was open to the Adjudicating Authority to make necessary correction The application under Section 7 being complete and we having held that ‘IL&FS Financial Services Limited’ is the ‘Financial Creditor’ and there is a debt and default, the application under Section 7 is to be admitted.
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