TMI Blog2020 (8) TMI 457X X X X Extracts X X X X X X X X Extracts X X X X ..... otek Limited , son Mr. P. Chandra Shekhar (Appellant), Director of the Corporate Debtor , acted as Guarantor. The Settlement deed dated 7th September, 2016 executed between the lenders including the Financial Creditors and the aforestated father and son duo is in furtherance of loan extended by the Financial Creditors to the Corporate Debtor towards discharge of liability of the Corporate Debtor . The Letter dated 1st February, 2017 issued by the Corporate Debtor to Respondent No.2 is also to the same effect. The Settlement Agreement dated 7th September, 2016 and the letter dated 1st February, 2017 admitting the debt on behalf of the Corporate Debtor confirm these conclusions. It is, therefore, of no avail for the Appellant t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orate Debtor has assailed the impugned order on various grounds said out in the memo of the appeal to which we shall advert to at the appropriate stage. 3. A brief reference to the factual matrix is inevitable. Be it seen that the case of the Financial Creditors for triggering of the Corporate Insolvency Resolution Process is based on a Loan Agreement dated 31st August, 2013 and a subsequent Settlement Deed dated 7th September, 2016. The Corporate Debtor , engaged in the business of developing software for computer systems and providing consultancy services, was incorporated under the Companies Act, 1956. It set up a wholly owned subsidiary in USA and its wholly owned subsidiary rendered software consultancy services to Respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rporate Debtor is not a signatory to the Loan Agreement dated 31st August, 2013 which has been executed inter se WSPL as lender and Mr. P.C. Pantulu as borrower. Thus, it is contended that there is no privity of contract between the Corporate Debtor and the Financial Creditors . It is further submitted that even in the Balance Sheet for the year ending 31st March, 2015, WSPL has acknowledged Mr. P.C. Pantulu as a borrower and not Respondent No.3, whose name is conspicuously absent in the Balance Sheet. 6. It is further submitted that even if Respondent No.3 is assumed to be the borrower under the aforesaid Loan Agreement, it is not the lender (WSPL), but Respondent Nos.1 and 2 i.e., Wincere Inc. and Mr. Himanshu P. Kansara who ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the Loan Agreement and the Settlement Agreement have not been executed on behalf of the Company and Respondent No.3 is not even a party to such agreements. 9. It is lastly submitted by the Appellant that the debt as claimed by the Financial Creditors is not due in the sense that it is not payable in law or in fact and the impugned order cannot be sustained. 10. Per contra, it is submitted on behalf of the Financial Creditors that the loan amount was advanced by the Financial Creditors to the Corporate Debtor for its business and working capital requirements and this fact is manifestly clear from the stipulations in the Loan Agreement and the Settlement Deed. 11. It is further submitted that the Corporate Debtor has adm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt. 13. It is submitted that the Financial Creditors have restricted their claim to ₹ 3,87,00,000/- i.e., the liability admitted by the Corporate Debtor towards the Financial Creditors in letter dated 1st February, 2017. According to the Financial Creditors , Cybermate Infotek Ltd. Inc. and Cybermate Infotek Ltd. are one and the same and Cybermate Infotek Limited is also operating in USA because of which INC was added to it by the Corporate Debtor . 14. It is further submitted that the Board of Directors of both the Companies comprises of the same persons. It is further submitted that the Appellant cannot resile from its admission that the loan amount was transferred to Corporate Debtor by the Financial Credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid acknowledgment of liability to the extent of ₹ 3,87,00,000/- towards the Financial Creditors , (the remaining admitted towards WSPL), which were later dishonoured upon presentation as manifested by invoking of jurisdiction of Criminal Court under Section 138 of the NI Act, stares in the face of the Appellant and Corporate Debtor , who cannot wriggle out of the liability by taking the fake plea of Cybermate Infotek Ltd. Inc. and the Corporate Debtor - Cybermate Infotek Ltd. being separate and distinct entities. 17. Perusal of records clearly bears out the fact that father and son have been working in tandem to defraud the Creditors and raising the false plea of there being no privity of contract between the Corporate Deb ..... X X X X Extracts X X X X X X X X Extracts X X X X
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