TMI Blog2020 (9) TMI 942X X X X Extracts X X X X X X X X Extracts X X X X ..... aims as per available records of Corporate Debtor with reference to the documents filed by respective claimants. Therefore, the stand Of the Liquidator in asking the Applicant to substantiate its claim by producing the requisite documents in question, is to be held within his rights. The Applicant, if so advised, can submit a suitable Representation to Liquidator, along with requisite documents as asked for, within a period of two weeks from the date of receipt of copy of this order - On receipt of above representation, the Learned Liquidator is directed to re-consider the claim as per law, and pass speaking order within two weeks thereafter, and communicate the same to the Applicant, immediately. Application disposed off. - I.A. No. 93 of 2020 in C.P.(IB) No. 181/BB/2018 - - - Dated:- 2-3-2020 - Rajeswara Rao Vittanala , Member ( J ) And Ashutosh Chandra , Member ( T ) For the Appellant : Gurudas S. Kannur, Senior Counsel, Raghu Hulikal For the Respondent : Ullasa B.C., PCS ORDER Ashutosh Chandra, Member (T) 1. I.A. No. 93 of 2020 in C.P. (IB) No. 181/BB/2018 is filed by M/s. Rajesh Exports Limited(hereinafter referred to as Applicant') under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30.04.2009 RMN -1-00365-2009-2010 CD No. RMND 91 3. 14.05.2009 119 72,00,000 14.05.2009 RMN-1-00603-2009-10 CD No. RMND 92 4) It is stated that as per the terms of ICD agreement, the Respondent No. 2 duty is bound to pay the agreed rate of interest at regular intervals. In the event of non-payment of dues under the ICD Agreement, the Financial Creditor/Applicant is entitled to invoke its rights under the Mortgage deed and accordingly the Respondent No. 2 is bound to execute the sale deed in its favour within 30 days. Further the Applicant/Financial Creditor is also entitled to recover the dues in excess after the transfer of property under the mortgage deed. Further the Respondent No. 2 has committed default in making payment as per the terms of ICD, therefore ICD's were recalled as per notice dated 12.11.2009. Since the Respondent No. 2 failed to honor its obligations, the Applicant/Financial Creditor was constrained to present the security cheques for clearance. Respondent No. 2 also committed default in honouring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Further, being aggrieved by the said communication dated 24.05.2019, the Applicant/Financial Creditor clarified certain aspects that the ICD transaction between the two Companies and not a loan transaction between two individuals. As such neither the provisions of the Karnataka Money Lenders Act, 1961 nor Karnataka Prohibition of charging exorbitant interest Act 2004 is applicable to the transaction. Further the burden of registering a charge is casted upon the Respondent No. 2 and not on the Applicant/Financial Creditor and clarified that in any other event the interest of Applicant/Financial Creditor is protected under Section 77(4) of the Act. 8) It is stated that the Financial Creditor is a public limited company and the accounts are statutorily audited and every transaction is a part of the balance sheet and the accounting systems are in accordance with the applicable laws. The ICD transactions are solely governed under the provision of the Companies Act, and the regulations issued by the Reserve Bank of India from time to time. As such the agreeing and charging of interest at 24% between two companies is squarely within the parameters of law and is not in violation of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany and the Corporate Debtor for issuance of ICD. (3) It is stated that on perusal of the Karnataka Prohibition of Charging Exorbitant Interest Act, 2004 (KPCEI Act) r/w Karnataka Money Lenders Act, 1961 and Notification No. CMW/04/CML/2003 dated 28/8/2003, the Respondent gathered that the captioned provisions prohibits charging interest rate of 14.00% p.a. for secured loans and 16.00% for unsecured loans. The extract of relevant provisions are produced below: Section 2(1)(d) of the Karnataka Prohibition of Charging Exorbitant Interest Act 2004: exorbitant interest means and includes charging of interest on hourly basis, daily basis, instalment basis, monthly basis or in any other form which works out to be an interest at the rate more than that fixed by the State Government u/s 28 of the Karnataka Money Lenders, Act, 1961 Section 28 of the Karnataka Money Lenders Act, 1961 28. Limitation on rate of interest - (1) The State Government may from time to time by notification fix the maximum rates of interest for any local area or class of business of money-lending in respect of secured and unsecured loans. (2) Notwithstanding anything contained in any law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g with their pleadings, both the Liquidator and the Applicant have exchanged various dated 24.05.2019, 14.07.2019, 16.08.2019, 30.08.2019 on the issue. Ultimately, on 27.12.2019, the Liquidator sent a letter to the Applicant by pointing out the following requisite documents as being asked for still not submitted to re-consider the Claim of Applicant: a. Certified copy of the statement/worksheet/grouping formula part of the schedule of Inter-corporate Deposit or/and Interest Accrued and not yet received in which the name of the Corporate debtor is clearly mentioned and duly signed by your auditors for all the year upto 2017-18 in which you have claimed as interest accrued and not received and for 2018-19 b. Certified copies of Ledger Extracts for your claim amount as it gets reflected in your books of accounts from the date of lending until the date of claim duly certified by your auditors. c. Certificates from your Tax Auditors mentioning that the amount of interest in respect of the corporate Debtor has been included in the taxable income taxes in respect of such interest income included in the Income Tax return. d. Any decision of the Hon'ble High Court of Karnata ..... X X X X Extracts X X X X X X X X Extracts X X X X
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