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2024 (2) TMI 377 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , PRINCIPAL BENCH , NEW DELHIInitiation of CIRP u/s 7 of the IBC - financial debt or not - Period of limitation - Advance paid subject to execution of the share purchase agreement - NCLT rejected the application as the appellant does not falling within the category of financial creditor - whether the amount of Rs. 1.25 crores paid by the Appellant to Shri Shabir Nirban, ex-Director of the Respondent Company constitute a financial debt as defined in IBC and whether the section 7 application filed regarding the purported financial debt deserved to be admitted? - HELD THAT:- It is noted from the definition of ‘debt’ and ‘default’ as enumerated in section 3(11) and 3(12) of the IBC that the financial debt had to be in the shape of liability and non-payment of such liability in the given time would cause default. In the present situation again, no date of default is made out and so we it is found that neither the said transaction is in the shape of a financial debt or in commercial effect of borrowing is evidenced and no default is also made out. As argued by the Learned Counsel for Respondent, and also admitted by the Learned Counsel for Appellant, the said transaction of Rs. 1.25 crores was ostensibly against the purchase of the property situated at Teen Batti, Walkeshwar Road, Mumbai, which was capable of redevelopment under the provision of the Development Control Regulation 33(7) and the value of property in view of this development potential was more than Rs. 15 crores. Therefore, a total consideration as claimed by the Appellant as about Rs.4.5 crores does not appear to constitute a tenable argument as a total amount of Rs. 4.5 crores would not be sufficient consideration for acquisition of the said property - it is considered necessary to go any further into the nature of the contract, whether written or otherwise between the two parties suffice to say that if transaction was made in December, 2014 against the purchase of a specific property, the Appellant should have asserted its right within the stipulated period of three years being the specific purchase of the contract to try to enforce such contract through IBC does not appear to be correct legal course of action. It is noted that in SANJAY D. KAKADE VERSUS HDFC VENTURES TRUSTEE COMPANY LTD AND ORS [2023 (11) TMI 1219 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL NEW DELHI], this Tribunal has considered a written Share Subscription and Shareholders Agreement between the shareholders as proof of financial debt. Quite obviously there is a delay in signing of shareholder subscription agreement, which was in consideration in the said appeal - the ratio laid down in the matter of Sanjay D. Kakade vs. HDFC Ventures Trustee Company Ltd. and Others does not apply in the facts and circumstances of the present case. The Adjudicating Authority has not committed any error in dismissing the section 7 application - the appeal is devoid of merit and consequently it is dismissed.
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