TMI Blog2018 (7) TMI 1263X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 5(8) of the Code and that the Applicant has rightly invoked the provisions of the Code. It is also seen from the Application that the above named IRP has given a written consent in Form 2 wherein he has agreed to accept appointments as IRP if Application is admitted. Further, it is also evident from the said Form 2 as filed by the IRP as well as the certificate as enclosed therein signed under his hand that he is not a related party to the Corporate Debtor and that he is eligible to be appointed as an independent director on the Board of the Corporate Debtor. - C.P. NO. IB-571/(ND)/2017 - - - Dated:- 4-6-2018 - MR. R. VARADHARAJAN, MEMBER (JUDICIAL) AND DR. V.K. SUBBURAJ, MEMBER (TECHNICAL) For The Applicant : Mr. Bharat Arora, Advocate For The Respondent : Ms. Varsha Banerjee, Mr. Milan Singh, Mr. Kunal Godwani, Ms. Swati Sharma, Mr. Gaurav Rana And Ashutosh Gupta, Advocate ORDER 1. This is an application which has been filed by the Applicants under the provisions of Insolvency and Bankruptcy Code, 2016 who claim to be the Financial Creditors of the Respondent Company which has been termed as the Corporate Debtor. The transaction leading to fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ructure of the Respondent Company as quasi-capital and the mere recording of the fund under the head of loans and advances in the books of the Respondent Company does not convert the same into financial debt. b. The Respondent also states that the loan purportedly extended by the Applicants to the Respondent Company has been set off. The Respondent submits that a dispute arose between the Applicants and their brother Mr. Pawan Kumar Aneja in 2013 which was settled in 2015 and a settlement agreement dated 08.09.2015 was entered into between the applicants and Pawan Kumar Aneja. c. It is submitted that according to the settlement agreement Applicant No. 2 inherited three properties - Aneja Industries, Udyog Vihar, Shri Gangapur; Solanki Bhawan Lakkad Mandi; 2 bigha agricultural land, Padampur Road, Shri Ganganagar; 14 bigha agricultural land (restricted to 60%) - and Pawan Kumar Aneja inherited the Respondent Company. Further, all the loans and advances standing in the accounts of both parties as cross entries were settled. In other words, loan given by Naresh Kumar Aneja to the Respondent Company was set off with the loan given by Pawan Kumar Aneja's owned Respondent Compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Applicants for the A.Y. 2013-2014 wherein the payment of TDS by the Respondent Company on behalf of the Applicants is reflected. 8. The Respondent Company on the other hand has made a bald submission that the funds were advanced as a contribution to the capital and was thus, not a financial debt and the categorization of the amount under the head of 'Unsecured Loan in the balance sheet will not change the nature of the amount advanced. The Respondent Company has also placed on record the order of the National Company Law Appellate Tribunal passed in Dr. B.V.S. Lakhsmi v. Geometrix Laser Solutions (P.) Ltd., Company Appeal (AT) (Insolvency) No. 38 of 2017, in which the Hon'ble Appellate Tribunal interpreted the definition of 'financial debt' under Section 5(8) of the Insolvency and Bankruptcy Code ( the Code ). After discussing the law laid down in Nikhil Mehta Sons v. AMR Infrastructure Company Appeal (AT) (Insolvency) No. 7 of 2017, the Appellate Tribunal held that for coming within the definition of 'financial debt' as defined under sub-section (8) of Section 5, the Claimant is required to show that (i) there is a debt along with interest, if a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent has also submitted that the debt extended by the Applicants were set off with the loan given by Pawan Kumar Aneja's owned Respondent Company under the settlement agreement. With regard to setting off of dues the settlement agreement annexed by the Respondent Company with the reply to the application states as follows: 2. Settlement of the accounts of all debts and liabilities from 01.04.2012 to 30.09.2015 of Sh. Pawan Kumar and Sh. Naresh Kumar shall be done by their Chartered Accountant Pradeep Kumar Aggarwal in the mediation of Sh. Naresh Kumar Sharma, s/o Sh. Kailash Raj Sharma, Angad Singh and Bhupender Singh Barad and any decision taken by them shall applicable to both party. 11. It is noted that the settlement agreement talks only about the debts due to Naresh Kumar Aneja and is completely silent about the debts owed to Sushant Aneja, Applicant No. 1 or Naresh Kumar Aneja (HUF), Applicant No. 2. Further, there is no explanation or description of the debts to be set off, thus, it cannot be ascertained whether the settlement agreement actually deals with the debts owed to the Applicants by the Respondent Company. Further, nothing has been placed on record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tificate of registration of the IRP as issued by the Insolvency and Bankruptcy Board of India (IBBI) has also been enclosed along with the Application and taking into consideration all the above, this Tribunal finds that this is a fit case to be admitted in terms of Section 7 of the Code and thereby initiate corporate insolvency resolution process as against the Corporate Debtor with the following consequences: a. Mr. Madhusudhan Sharma, having registration No. IBBI/PA-003/IP-N00046/2017-18/10395, is appointed as the interim resolution professional and he shall strictly act in accordance with the provisions of the Code and the attendant Rules enjoined upon him; b. In terms of Section 14, as reproduced hereunder, the Corporate Debtor shall be under moratorium on the following terms: (a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; (b) transferring, encumbering, alienating or disposing of by the corporate debtor any of its assets or any legal right or beneficial interest therein; (c) any actio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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