TMI Blog2018 (6) TMI 947X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of ‘Q-City’, which is the consideration for time value of money. We find that the Respondent- (‘Financial Creditor’) come within the meaning of ‘Financial Creditor’ and is eligible to file an application under Section 7, there being a ‘debt’ and ‘default’ on the part of the ‘Corporate Debtor’. - Company Appeal (AT)(Insolvency) No. 143 of 2017 And Company Appeal (AT)(Insolvency) No. 175 of 2017 - - - Dated:- 21-5-2018 - Mr. S.J. Mukhopadhaya, Mr. A.I.S. Cheema And Balvinder Singh For The Appellant : Dr. Abhishek Manu Singhvi and Dr. U.K. Chaudhary, Senior Advocates with Ms. Diya Kapur, Ms. Akshita Sachdeva, Ms. Ranjana Roy Gawai, Ms. Ferida Satarwala, Mr. Pervinder, Mr. Vivek Kumar, Mr. Himanshu Vij, Mr. Rohan Jaitly, Mr. Avishkar Singhvi and Ms. Madhavi Khanna, Advocates For The Respondent : Mr. S.N. Mookherjee, Senior Advocate with Mr. Rudreshwar Singh and Ms. Shivambika Sinha, Advocates JUDGEMENT SUDHANSU JYOTI MUKHOPADHAYA, J. Mack Soft Tech Private Limited ( Corporate Debtor ) was developing an office complex by the name of Q-City in Hyderabad. While it was in developing process, the Quinn Logistics India Private Limited ( Financial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as the Quinn Family was in control of the Quinn Investments Sweden AB and the Quinn Logistics Sweden AB . Such issue of shares to Mecon FZE is the subject matter of challenge in Suit No. OS 21 of 2012 filed, inter-alia, by the Quinn Logistics India Private Limited - ( Financial Creditor ) before the learned District Judge, Rangareddy Court, Hyderabad. Since then certain development has been taken place and matter is pending in Suit which are not necessary to be taken into consideration at this stage. 7. The Quinn Logistics India Private Limited -( Financial Creditor ) by its letter dated 15th June, 2017, called upon the Mack Soft Tech Private Limited - ( Corporate Debtor ) to repay the alleged outstanding loan amount of ₹ 62,90,45,905/- (Sixty-two crores ninety lakh forty-five thousand nine hundred five only) on or before 30th June, 2017. In response, the Mack Soft Tech Private Limited -( Corporate Debtor ) by letter dated 29th June, 2017, sought time to verify its records to clarify the position. According to the Mack Soft Tech Private Limited - ( Corporate Debtor ), there is no amount outstanding in the books of account of the Corporate Debtor payable to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts balance sheet and removed the name of the Respondent- ( Financial Creditor ). Therefore, according to the Appellant- ( Corporate Debtor ), as per the legal and accounting advice as the amount was required to be kept on the books until the debt was time barred, after it became time barred in the year 2016, the amount has not been reflected. 14. It was submitted that since 2016 there was no demand or correspondence made by the Financial Creditor in respect of ₹ 62.9 Crores alleged loan and on legal advice the loan has been wrote-off. Even if any such loan was given, it cannot be shown in the books as a claim, it being time barred. 15. Further, according to learned Senior Counsel for the Appellant on 15th June, 2017 a demand notice was sent but with no reference to any loan agreement or document stating how the loan was repayable on the said date. The notice was sent only with the malicious intention to initiate insolvency proceedings against the Appellant- ( Corporate Debtor ). 16. It was submitted that on 29th June, 2017, the Appellant- ( Corporate Debtor ) informed the Respondent- ( Financial Creditor ) that it requires two-three weeks time to verify its record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the I B Code . 19. It was submitted that the observations of the Hon ble Supreme Court in Innoventive Industries Ltd. (Supra) is a passing observation and cannot be held to be law laid down under Article 141 of the Constitution of India. However, we are not inclined to deliberate on such issue as the same very impugned order has been challenged by individual in the connected appeals. Further, according to us, any observations of the Hon ble Supreme Court on the question of law, even if not treated to be a law laid down under Article 141 of the Constitution of India, is binding on this Appellate Tribunal. 20. Learned Senior Counsel for the Appellant challenged the impugned order on the ground that the application did not satisfy the basic requirements of Section 7. 21. The case of the Appellant- ( Corporate Debtor ) is that Form-1 requires that the specific information are to be provided in Part-IV of the said Form-1. A bare perusal of the statutory requirements would show that the same is bereft of the information required statutorily to be provided under Section 7(2) and (3) of the I B Code . 22. It was further submitted that the Respondent- ( Financial Creditor ) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ired to be made on such issue, as it has been brought on record that the payments were made by the Respondent- ( Financial Creditor ) to Indu Projects on behalf of the Corporate Debtor , which is not in dispute. 27. Learned Senior Counsel for the Appellant- ( Corporate Debtor ) referred to the different pages and submitted that the Respondent- ( Financial Creditor ) excess amount of ₹ 62,90,45,905/- has been shown as default, but such submission cannot be accepted as it also reflects the amount paid to the Indu Projects is (Rs. 35,88,04,434/-) on behalf of the Appellant, as the Appellant has failed to pay the same. 28. The Hon ble Supreme Court in Innoventive Industries Ltd. (Supra) observed: 28. When it comes to a financial creditor triggering the process, Section 7 becomes relevant. Under the explanation to Section 7(1), a default is in respect of a financial debt owed to any financial creditor of the corporate debtor- it need not be a debt owed to the applicant financial creditor. Under Section 7(2), an application is to be made under sub-section (1) in such form and manner as is prescribed, which takes us to the Insolvency and Bankruptcy (Application to Adju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not true. The debt cannot be claimed to be not due being payable in law and in fact the Appellant- ( Corporate Debtor ) having accepted that it obtained loan from the Respondent- ( Financial Creditor ). 30. The default has occurred as evident from the fact that the Respondent- ( Financial Creditor ) asked for refund of the amount by notice dated 15th June, 2017. In reply after asking for two weeks time, the Appellant- ( Corporate Debtor ) failed to pay the amount. 31. This Appellate Tribunal in M/s. Speculum Plast Pvt. Ltd. Vs. PTC Techno Pvt. Ltd. ─ Company Appeal (AT) (Insolvency) No. 47 of 2017 held that the law of limitation is not applicable to I B Code and observed as follows: 68. In view of the settled principle, while we hold that the Limitation Act, 1963 is not applicable for initiation of Corporate Insolvency Resolution Process , we further hold that the Doctrine of Limitation and Prescription is necessary to be looked into for determining the question whether the application under Section 7 or Section 9 can be entertained after long delay, amounting to laches and thereby the person forfeited his claim. 69. If there is a delay of more than t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The main object of the company (Quinn Logistics Private Limited) has been shown in its Memorandum of Association, relevant portion of which reads as follows: 36. It is not in dispute that the Appellant- ( Corporate Debtor ) was developing an office complex by the name of Q-City Hyderabad. In the process of developing such office complex on 23rd October, 2017, the Respondent- ( Financial Creditor ) acquired the majority of the shareholding of the Appellant- ( Corporate Debtor ) for a total consideration of ₹ 162.73 Crores. Subsequently, in between 2007-2010, the Financial Creditor granted interest free unsecured loan of ₹ 62.90 Crores to the Appellant- ( Corporate Debtor ) for development of Q-City . 37. Grant of loan and to get benefit of development is object of the Respondent- ( Financial Creditor ), as apparent from their Memorandum of Association . Thus, we find that there is a disbursement made by the Respondent- ( Financial Creditor ) against the consideration for the time value of money . The investment was made to derive benefit of development of Q-City , which is the consideration for time value of money. Thus, we find that the R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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