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TMI Blog2021 (12) TMI 1150X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Applicant as an operational creditor of the Corporate Debtor; ➢ An order rejecting / annulling the resolution passed by Committee of Creditors on 18.05.2021 to liquidate the Corporate Debtor and directing the Respondent to re-convene the Committee of Creditors with the Applicant as a member of the Committee of Creditors; ➢ Ad-interim order directing the Respondent to not act or take any steps in furtherance to the resolution passed by Committee of Creditors of Corporate Debtor on 18.05.2021 to liquidate the Corporate Debtor, until the disposal of the present application. 2. The Federal Bank Limited, financial creditor of the Corporate Debtor, instituted an Insolvency Application bearing C.P. NO. IBA/25/KOB/2020 for initiation of Corporate Insolvency Resolution Process ("CIRP") against the Corporate Debtor. The Application was admitted by this Tribunal vide Order dated 08.03.2021 whereby the CIRP of the Corporate Debtor was ordered and Mr. Sathiq Buhari, the respondent herein, was appointed as the Interim Resolution Professional. On 13.03.2021, Respondent published Public Announcement in From A as prescribed under Section 15 of the Code. 3. The applicant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the corporate debtor. SUBMISSIONS BY THE RESOLUTION PROFESSIONAL 7. The Resolution Professional filed his counter stating that as per Regulation 10 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations,2016, the Interim Resolution Professional ("IRP")/ Resolution Professional ("RP") may call for such other evidence or clarification as he deems fit from a creditor for substantiating the whole or part of its claim. Hence, an opportunity was given to the applicant to substantiate the claim. Instead of substantiating the claim, the applicant cleverly tried to mislead the IRP. 8. The applicant suppressed and concealed the material facts and disputes affecting the very legal validity of the settlement deed dated 04.09.2019 under which the applicant traces out its claim stated in Form-C. On the ground of fraud, cheating, forgery and falsification of documents including the said Settlement deed dated 04.09.2021 in question, a crime was registered by Vellayil Police, Kozhikode as FIR No.0051 dated 15/02/2020 against the applicant and 12 others under Sections 406, 420, 465, 471 and 34 of IPC. Now the said crime is pending for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officio, the alleged status of the applicant as Operational Creditor claimed under Exhibit-G could not be considered. If the claim was considered, it become a serious error on appreciation of facts for the reason claimed under Exhibit- G and Form-B claim is also tilted by the criminal case. FINDINGS 11. We have gone through the whole case records and have heard the arguments advanced by the learned counsel for the applicant and the Resolution Professional in person through video conferencing. In the present case applicant being a financial lender of the Corporate Debtor filed its claim for Rs. 3,71,01,369.86 (Rupees Three Crore Seventy-One Lakh One Thousand Three Hundred Sixty-Nine and Eighty-Six Paisa only) as a Financial Creditor vide Form C dated 07.05.2021. On verification of the Form C and based on the decision, the Resolution Professional rejected the claim stating that the applicant is not a Financial Creditor and that Term Loan Agreement dated 22.03.2017 executed between the applicant and the corporate debtor was novated by the Settlement Deed dated 04.09.2019. The claim verification order issued by the IRP states: - 9) It is explicit from the contractual terms narrate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated in Serial No.34, 35 & 36) was settled to be deducted from the total recoverable amount of Rs. 108,362,253 (Ten crore eighty three lakhs sixty two thousand two hundred and fifty three only) When an amount of Rs. 70,725,785/ is deducted from the recoverable amount of Rs. 108362253/, the subtraction would be Rs. 376365 18 (Rs. 108,362,258 - Rs. 70,726, 786= Rs. 97,636,518) as stated in Serial No.37. 15. As narrated above an amount of Rs. 37686518/ was settled as the final amount payable by the Platino Classic (India) Pvt. Ltd as specifically stated in Clause No. H (3) of the Settlement deed dated 04/09/2019. The principles of novation of contract is stated in Section 62 of the Indian Contract Act, 1872 which says that "if the parties to a contract agree to substitute a new contract for it, or to rescind or alter it, the original contract need not be performed. If the parties to a contract agree to substitute a new contract for it, or to rescind or alter it, the original contract need not be performed. 16. Since the term loan agreement dated 22/03/2017 is altered and substituted by the parties by executing a settlement deed dated 04/09/2019, the former agreement cannot be pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) of the Settlement deed dated 04/09/2019. The Settlement deed dated 04/09/2019 was jointly executed by BMW India Financial Services Pvt. Ltd, BMW India Pvt. Ltd, Platino Classic (Motors) India Pvt. Ltd, Koyenco Autos Pvt. Ltd and P.P. Ashique. The consequences of the breach of contract is provided under Clauses No.H10H1 1, H 12 and His of the Settlement deed dated 04/09/2019. In a joint settlement deed of this nature, it is doubtful whether it is possible for one party without exhausting the remedies provided under the contract, to fragmentize his rights adversely affecting the rights of other parties who have reciprocal rights and obligations in the contract. 20. In the light of the above discussion, it is manifestly evident that the Form-C claim application dated 07/05/2021 preferred by BMW India Pvt. Ltd styling as a Financial Creditor will not come under the ambit of a Financial debt as defined under Section 5 (8) of IBC, 2016 or cannot claim the status of a Financial Creditor as defined under Section 6 (7) of IBC, 2016 entitling to submit a Form-C application as contemplated under Regulation 8 of the Insolvency and Bankruptcy Board of India (Insolvency Resolution Proces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quisite for a debt to qualify as a 'financial debt' is that there must be a "disbursal" of money against the consideration for time value of money. The Hon'ble Supreme Court in Anuj Jain IRP for Jaypee Infratech Limited V. Axis Bank Limited ((2020) 8 SCC 401, Para 46) has affirmed the above contention by holding that transactions under Section 5(8) would be falling within the ambit of 'Financial Debt' only if they carry the essential element of "disbursal", and that too against the consideration for time value of money. 14. The Hon'ble Supreme Court in Pioneer Urban Land and Infrastructure Limited v. Union of India ((2019) 8 SCC 416, Para 71) has held that for a debt to correspond to the definition of a 'Financial Debt' under the Code, there must be "disbursal" which must be a disbursal of money and which must be against consideration for the time value of money. The Hon'ble Supreme Court has conclusively affirmed that there must be actual disbursal of money for a debt to be a financial debt. 15. The term 'disburse' has not been defined in the Code. Black's Law Dictionary, 10th Edition defines 'disbursement' as follows: "The act of paying out money, commonly from a fund or in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date, within seven days from the last date of the receipt of the claims, and thereupon maintain a list of creditors containing names of creditors along with the amount claimed by them, the amount of their claims admitted and the security interest, if any, in respect of such claims, and update it. (2) The list of creditors shall be - (a) available for inspection by the persons who submitted proofs of claim; (b) available for inspection by members, partners, directors and guarantors of the corporate debtor; (c) displayed on the website, if any, of the corporate debtor; (d) filed with the Adjudicating Authority; and (e) presented at the first meeting of the committee 14. Determination of amount of claim: (1) Where the amount claimed by a creditor is not precise due to any contingency or other reason, the interim resolution professional or the resolution professional, as the case may be, shall make the best estimate of the amount of the claim based on the information available with him. (2) The interim resolution professional or the resolution professional, as the case may be, shall revise the amounts of claims admitted, including the estimates of claims made ..... X X X X Extracts X X X X X X X X Extracts X X X X
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