TMI Blog2017 (9) TMI 1859X X X X Extracts X X X X X X X X Extracts X X X X ..... st on loan amount shows that there is an outstanding debt, which is a financial debt due from the Respondent to the Applicant. Even assuming that Respondent is entitled for certain amounts from the Applicant, it can only be treated as a set off or counter-claim and it can not be a dispute relating to the financial debt due to the Applicant from the Respondent - On the ground that there is counter-claim or set off as pleaded by the Respondent, it cannot be said that there is no default in repayment of the financial debt. Therefore, this Adjudicating Authority is of the considered view that there is occurrence of default in payment of financial debt by the Respondent. It is contended by the learned counsel for the Respondent that columns at Serial Nos. 5, 6, and 8 of Part V of Form-I are not provided by the Applicant. It is stated in Column 5 of Part V as Not Applicable . Since it is a case of Unsecured Loan from Applicant Company to the Respondent Company which reflects in the Statement of Account there is no financial contract and therefore it cannot be said that Column 5 is not answered by the Applicant. Column 6 refers to record of default. It is stated that it is Not Applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Company deducted the TDS of ₹ 1,96,724 on the total amount of interest of ₹ 19,67,238/- as on 31.3.2015. Applicant filed copy of Form No. 26AS showing the interest amount and TDS amount as Exhibit 'D'. Applicant also filed copy of Interest Calculation upto 31.3.2015 and confirmation of the account as Exhibit 'E'. 5. Applicant, thereafter, gave an amount of ₹ 1,62,97,000/- towards Unsecured Loan to the Respondent in the year ended on 31.3.2016. Applicant received back an amount of ₹ 1,50,00,000 in the year 2015-16. Applicant Company filed Balance Sheet as on 31.3.2016 and the details of the amount paid and received in the year 2015-16 as 'Exhibit F'. The total amount of interest receivable by the Applicant Company during the period ended on 31.3.2016 was ₹ 28,59,925/-. The Applicant filed Interest Calculation Sheet as 'Exhibit G'. Respondent deducted TDS of ₹ 2,85,993/- on the total amount of interest of ₹ 28,59,925/- receivable by the Applicant Company in the year ended on 31.3.2016. Applicant filed copy of Form 26AS showing the interest amount and TDS amount as 'Exhibit H'. 6. Appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h a Counsel and filed Objections on 13.9.2017. 11. The following are the Objections filed by the Respondent. The Applicant Company's Director is a real brother of the Director of the Respondent Company, and there is corresponding obligations of the Applicant Company and its management to make payment to the Respondent Company and its management. It is further stated that there is one partnership firm jointly owned and run by management of both the Companies and there are transactions which are between relative parties and details of the same are narrated. It is stated that the Applicant approached this Authority with unclean hands by using this Insolvency Resolution Process as an arm twisting mechanism to collect money. 11.1 Respondent pleaded that the alleged debt does not come within the four corners of financial debt. 11.2 The management of Respondent Company belongs to promoter Director Mr. Vinay Jain and that of the Applicant belongs to the real brother of Mr. Vinay Jain, by name Mr. Deepak Jain. Both the brothers are partners since 2010 in a family partnership firm named V.R. Fashion, Ahmedabad and there is an Admission Deed of Partnership. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. Heard the learned counsel for the Applicant and the learned counsel for the Respondent. In view of the Objections raised by the Respondent, this Adjudicating Authority has to first decide whether the amount claimed from the Respondent by the Applicant is a financial debt or not. Financial Debt , to the extent relevant for the purpose of this case, is defined in Clause (a) of sub-section (8) of Section 5 of the Code. It says, financial debt means a debt along with interest, if any, which is disbursed against the consideration for the time value of money and includes money borrowed against the payment of interest. 13. The details of money given by the Applicant Company to the Respondent Company during the year 2014-15 are shown in 'Exhibit C'. Exhibit C is the ledger Account of the Respondent Company maintained by the Applicant Company. It shows the amount disbursed to Respondent Company. A perusal of Exhibit 'D', which is Form No.26AS Sr. No. 16 shows that an amount of ₹ 1,96,724 was deducted towards TDS on the interest amount of ₹ 19,67,238 payable to the Applicant Company. 14. The copy of the Balance Sheet as on 31.3.2016 sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Application. The above said Judgment of the Hon'ble National Company Law Appellate Tribunal was challenged in Civil Appeal No. 8337-8338 of 2017 before the Honourable Supreme Court of India. The Hon'ble Apex Court vide Judgment dated 31st August, 2017, dismissed the above said Appeals. In Para No. 30 the Hon'ble Supreme Court has held as follows: 30. On the other hand, as we have seen, in the case of a corporate debtor who commits a default of a financial debt, the adjudicating authority has merely to see the records of the information utility or other evidence produced by the financial creditor to satisfy itself that a default has occurred. It is of no matter that the debt is disputed so long as the debt is due i.e. payable unless interdicted by some law or has not yet become due in the sense that it is payable at some future date. It is only when this is proved to the satisfaction of the adjudicating authority that the adjudicating authority may reject an application and not otherwise. 15.2 In view of the above said observations made by the Hon'ble Supreme Court, this Adjudicating Authority has to see whether the debt is due, i.e., payable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es not even impliedly mean that there are no transactions much less credit transactions between the Applicant and the Respondent prior to 2014. The very fact that the Respondent deducted tax on interest on loan amount shows that there is an outstanding debt, which is a financial debt due from the Respondent to the Applicant. Even assuming that Respondent is entitled for certain amounts from the Applicant, it can only be treated as a set off or counter-claim and it can not be a dispute relating to the financial debt due to the Applicant from the Respondent. On the ground that there is counter-claim or set off as pleaded by the Respondent, it cannot be said that there is no default in repayment of the financial debt. Therefore, this Adjudicating Authority is of the considered view that there is occurrence of default in payment of financial debt by the Respondent. 18. It is contended by the learned counsel for the Respondent that columns at Serial Nos. 5, 6, and 8 of Part V of Form-I are not provided by the Applicant. It is stated in Column 5 of Part V as Not Applicable . Since it is a case of Unsecured Loan from Applicant Company to the Respondent Company which reflects in ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
