TaxTMI 
TaxTMI 
2022 (8) TMI 323
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....) (INS) No. 214 of 2022): The Appellant / Shareholder of the 2nd Respondent / Corporate Debtor M/s. Lepakshi Knowledge Hub Private Limited, Bangalore, Karnataka, through its Director Mr. I. Karunakar Reddy has preferred the present Company Appeal (AT) (CH) (INS) No. 214 of 2022 before this Appellate Tribunal, on being dissatisfied' with the 'impugned order', dated 03.06.2022, in CP(IB)/107/BB/2021, passed by the 'Adjudicating Authority', 'National Company Law Tribunal' ('NCLT'), Bengaluru Bench, in admitting the Company Petition. 2. The 'Adjudicating Authority', 'National Company Law Tribunal' , Bengaluru Bench, while passing the 'impugned order' in CP(IB)/107/BB/2021 filed by the 1stRespondent/Petitioner/Financial Creditor against the 2nd Respondent/Corporate Debtor at paragraphs 9 to 12, had observed the following: 9. ''It is not in dispute that the Respondent/Corporate Debtor executed a corporate guarantee in favour of the Financial Creditor/Petitioner guaranteeing repayment of the amount paid by the Financial Creditor/Petitioner to the Principal Borrower i.e., Lepakshi Science and Technology Park Private Limited. In C.P. (IB) No. 98/BB/2021 filed by the Financial Creditor/P....
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....rity) Rules, 2016. Under Rule 4, the application is made by a financial creditor in Form 1 accompanied by documents and records required therein. Form 1 is a detailed form in 5 parts, which requires particulars of the applicant in Part I, particulars of the corporate debtor in Part II, particulars of the proposed interim resolution professional in Part III, particulars of the financial debt in Part IV and documents, records and evidence of default in Part V. Under Rule 4 (3), the applicant is to dispatch a copy of the application, filed with the adjudicating authority by registered post or speed post to the registered office of the corporate debtor. The speed, within which the adjudicating authority is to ascertain the existence of a default from the records of the information utility or on the basis of evidence furnished by the financial creditor, is important. This it must do within 14 days of the receipt of the application. It is at the stage of Section 7(5), where the adjudicating authority is to be satisfied that a default has occurred, that the corporate debtor is entitled to point out that a default has not occurred in the sense that the ''debt'', which may also include a di....
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....that the Inter Corporate Deposit is an independent transaction and cannot be treated as part of any action or document in pursuance of the Memorandum of Understanding dated 07.01.2022 executed between the Petitioner and a third party. 19. We find force in the submissions made by the Learned Senior Counsel appearing for the Petitioner/Financial Creditor. The Memorandum of Understanding dated 07.01.2022, on which the Respondent placed reliance was admittedly executed between the Petitioner and a separate legal entity known as M/s. Lepakshi Knowledge Hub Private Limited. Further, the amount received by the Respondent/Corporate Debtor under the subject Inter Corporate Deposit dated 19.03.2022 was not for purchasing of any shares by the Petitioner in the Respondent Company. On the other hand, it was for meeting certain expenses by the Respondent/Corporate Debtor. Hence, the contention of the Petitioner in this regard is rejected. The other contention with regard to the pending Arbitration proceedings etc., have no relevance in the application u/s 7 of the IBC, 2016. The contention of the Respondent/Corporate Debtor that the Petitioner/Financial Creditor in the Balance Sheets shown the....
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....d that the Financial Creditor can simultaneously or one after another initiate CIRP against the Corporate Debtor as well as Corporate Guarantor. Hence, there is no impediment in initiating CIRP against the Respondent herein, who is the Corporate Guarantor, even after initiating the CIRP against the Principal Borrower. 12. The instant application filed in the prescribed Form No. 1 is found to be complete.'' and admitted the main Company Petition, by declaring 'Moratorium' and appointed an 'Interim Resolution Professional', Mr. Hemendra Paliwal, etc. Appellant's Submissions (in CA (AT)(CH)(INS) No. 214 of 2022): 3. The Learned Counsel for the Appellant submits that the 'Adjudicating Authority',('National Company Law Tribunal', Bengaluru Bench), while passing the 'impugned order' in CP(IB)/107/BB/2021 had failed to appreciate the real, correct ambit of its Jurisdiction in terms of Section 7 of the I & B Code, 2016 and brushed aside the aspect of 'Arbitration Proceedings' between the 'Parties', in the instant matter as an 'irrelevant one'. 4. It is represented on behalf of the Appellant that the 'Adjudicating Authority' had failed to appreciate the rationale behind including even....
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....ng Authority' at the time of passing the 'impugned order'. 8. The Learned Counsel for the Appellantpoints out that the 'Adjudicating Authority' had failed to apply the decision of the Hon'ble Supreme Court of India in Indus Biotech (P) Ltd. V Kotak India Venture (Offshore) Fund, reported in [2021] 6 SCC at page 436. 9. The Learned Counsel for the Appellant submits that the 'Adjudicating Authority' had wrongly held that the 1st Respondent's Application was within limitation, by incorrectly placing reliance on the Balance Sheets for the Financial Years 2011-2012 to 2018-2019. In this regard, the stand of the Appellant is that the Corporate Debtor had cogently explained as to how Rs.5 Crores continued as a mere balancing entry to balance the asset side entry towards Stamp Duty amounting to Rs.5 Crores which is an irreversible one. In fact, after the Financial Year 2016-2017, the note at the end of the liability was specifically modified, removing any reference to the 'Inter-Corporate Deposit' or 'Interest'. 10. The categorical plea of the Appellant is that there is nothing in the Balance Sheet 3 years before the Petition which constitute a Written Acknowledgement of Debt satisfying....
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.... as per Section 34 of the Arbitration and Conciliation Act, 1996, and therefore, unless the Hon'ble High Court set aside the 'Award', the 1st Respondent is legally precluded from claiming the amounts. 1st Respondent's/Financial Creditor's/Petitioner's Contentions(in CA (AT)(CH) (INS) Nos. 214 and 216 of 2022: 17. The Learned Counsel for the 1st Respondent/Financial Creditor submits that the 1st Respondent had executed an 'Inter-Corporate Deposit' Agreement dated 19.03.2012 with the 2nd Respondent (M/s. Lepakshi Science and Technology Park Private Limited), in and by whicha sum of Rs.5 Crores only was advanced to the 2nd Respondent (M/s. Lepakshi Science and Technology Park Private Limited) has a 'Short Term Loan' and that the term of this 'Inter-Corporate Deposit' was 6 months,which was repayable on demand thereafter with an interest at 18% per annum. 18. Also, it is brought to the notice of this 'Tribunal' that the 1st Respondent/Financial Creditor 'as security'towards the grant of the aforesaid 'Short Term Loan' had secured a 'Corporate Guarantee' being executed by the 2nd Respondent (M/s. Lepakshi Heritage Wellness Village Private Limited) in CA (AT) (CH) (INS) No. 214 of 202....
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....and Technology Park Private Limited - L1), which is legally distinct from the 'Appellant/Parent Company' and the same applies to the execution of the 'Corporate Guarantee' as well (M/s. Lepakshi Heritage Wellness Village Private Limited - L2). 24. The Learned Counsel for the 1st Respondent/Financial Creditor points out that nothing in the 'Memorandum of Understanding' or in any 'document' produced by the Appellant states the foundation of the fact that the 'Inter-Corporate Deposit' was a Short Term Loan executed with M/s. Lepakshi Science and Technology Park Private Limited (L1) and guaranteed by M/s.Lepakshi Heritage Wellness Village Private Limited (L2) that was meant to be repaid with interest. In short, the 1st Respondent/Financial Creditor's plea is that the success or failure of the transaction contemplated with the Appellant as per the 'Memorandum of Understanding' signed with M/s. Lepakshi Knowledge Hub Private Limited (Appellant) and L1 and L2 are not 'Parties' to the said 'Memorandum of Understanding', therefore, the 'Memorandum of Understanding' can have no bearing on M/s. Lepakshi Science and Technology Park Private Limited (L1's) 'liability' to repay the 'Inter-Corpor....
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....td had guaranteed repayment and therefore it also reflects as ''Other Financial Liabilities'' in the books of accounts of both the companies.'' 28. The Learned Counsel for the 1st Respondent submits that neither the 'Memorandum of Understanding' nor the 'Inter-Corporate Deposit' document or the 'Corporate Guarantee' refer to any 'forfeiture Clause' or 'any adjustment of the Inter-Corporate Deposit Sum' in final payment to be made to the 2nd Respondent. That apart, there is no written (or) verbal communication (or) any legal document executed between the 'Parties' on such 'Adjustments' / 'Forfeiture'. 29. The Learned Counsel for the 1st Respondent/Financial Creditor submits that the proceedings in 'Indus Biotech' case arose in the context of the Respondent seeking to initiate 'Insolvency' on account of the 'Petitioner' failing to effect payment of a sum on redemption of 'Optional Convertible Redeemable Preference Shares', Viz. an 'Equity Instrument'. However, in the instant case on hand, no such or similar facts exists. Furthermore, in the instant case, there is enough material to exhibit that a 'Default' had in fact took place. 30. The Learned Counsel for the 1st Respondent/Fina....
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....he Financial Creditor was investing in the project undertaken by the Project Proponent. * The Project Proponent had entered into a Memorandum of Agreement with the Government of Andhra Pradesh on 22.12.2008 (``MoA'') for the purpose of setting up global knowledge hub (``Project''). By way of this MoA the government of Andhra Pradesh agreed to allot and transfer required land to the Project Proponent. Further the Project Proponent incorporated two entities i.e. the Borrower and Corporate Debtor. * It was the understanding between the Financial Creditor and the Project Proponent in terms of the MoU that the Project Proponent was in the process of transferring 2000 acres and 650 acres of land to the Borrower and the Corporate Debtor respectively. * Under the MoU with the Project Proponent the Financial Creditor agreed to purchase 100% equity shareholding in the Corporate Debtor and the Borrower for a total consideration of Rs,2,38,50,00,000/-. It was agreed that within 5 days from the date of MoU the Financial Creditor shall forward an amount of Rs.5,00,00,000/- (Rupees Five Crores) to the Borrower through an inter corporate deposit or a similar instrument. Consequent to this the I....
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....ued to subsist and was recalled on 19.09.2020. The liability has been acknowledged by the Borrower in its Balance Sheet between the financial years 2011-12 to 2018-19. * The outstanding interest payable on the unpaid amount of debts as on 26.06.2021 by the Corporate Debtor amounts to Rs.20,84,94,000/- (Rupees Twenty Crores Eighty Four Lakhs Ninety Four Thousand Only) (hereinafter referred to as the ``Outstanding Interest Amount Due''). Compound Interest at the rate of 18% was payable from 21.09.2012. * The calculation of the Outstanding Principal Amount and the Outstanding Interest is provided and filed in a tabular format in this present Application. * The total amount due and payable by the Corporate Debtor including the Outstanding Principal Amount and the Outstanding Interest Amount stands at Rs.25,84,94,000/- (Rupees Twenty Five Crores Eight Four Lakhs Ninety Four Thousand Only) (also referred to as the ``Total Amount Due and Payable''). The detailed tabular working is provided below: S. No. Particulars Amount 1 Outstanding Principal Amount Due Rs.5,00,00,000/- 2 Compound Interest of 18% per annum on Principle Amount from 21.09.2012 till date Rs.20,84,94,000/- &nb....
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....ion' ('APIIC') had provided around 8,848 Acres of land to the Appellant / M/s. Lepakshi Knowledge Hub Private Limited ('LKH') at Chilamattur and Gorantla in Anantapur District, Andhra Pradesh. Later, the Appellant / LKH had paid the necessary sale consideration after which the 'Andhra Pradesh Industrial Infrastructure Corporation' had executed numerous Sale Deeds conveying the total land to the Appellant. 38. According to the 2nd Respondent/M/s. Lepakshi Heritage Wellness Village Pvt. Ltd., during the Year 2011 negotiations took place between the 1st Respondent/Petitioner/Financial Creditor and the Appellant/LKH to enable the Petitioner to participate in a part of the 'Project' and it was agreed that 2650 Acres out of total land proposed to be developed by the Claimant ('subject land') would be transferred to R2 / M/s. Lepakshi Science and Technology Park Private Limited in CA (AT) (CH) (INS) No. 216 of 2022 and to R2 / M/s. Lepakshi Heritage Wellness Village Pvt Ltd in CA (AT) (CH) (INS) No. 214 of 2022, after which, the 1st Respondent/Petitioner will fully acquire the 'Equity' of the 'LST' and 'LHW' for a total consideration of Rs.238,50,00,000/- and in this regard, the Appellan....
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....onally backed out from the transaction without paying the initial payment along with the definitive agreements, the parties considered the 'Transaction' as failed. Apart from this, the 1st Respondent/Petitioner and M/s. Lepakshi had entered into several ancillary agreements being 'Inter-Corporate Deposit Agreement' dated 19.03.2012, 'Corporate Guarantee' dated 29.03.2012 and an 'Escrow Agreement' dated 16.04.2012 and none of these 'Agreements' had any independent existence apart from the terms and performance of the 'Memorandum of Understanding'. 43. The 2nd Respondent/LHW in its 'Reply' had averred that Rs.5 Crores was transferred from the 1st Respondent/Petitioner/Financial Creditor to the 2nd Respondent/LST in CA (AT) (CH) (INS) No. 216 of 2022 was, admittedly not towards the Share Transfer, but only towards the Cost of Land Transfer from LKH to LST and LHW. In fact, the terms of the Agreement make it very clear that the amount of Rs.5 Crores was transferred to 'LST' as cost of 'Land Transfer'. Further, it is apparent that the parties had considered Rs.5 Crores to be part of the expenses to be incurred towards the transaction, obviously subject to the payment of 'MOU' considera....
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....fil the requirement of Section 5 (8) of the I & B Code, 2016, the financial transaction ought to be in the nature of 'Debt'. An existing obligation to pay a sum of money is the sine qua non of a 'Financial Debt'. A sum of money which is certainly and in all eventualities payable is a 'Debt' without regard to the fact whether it is payable now or at a future date. Debt : 49. The term 'Debt' (as per Section 3 (11) of the Code) means a 'liability' or 'obligation' in respect of a 'claim' which is due from any person and includes a 'financial debt' and 'operational debt'. 50. Indeed, the term 'Debt' as defined under Section 3 (11) of the I & B Code, refers to a sum i.e., due from any person, including the 'Corporate Debtor'. Also that, the words 'Employed' in the definition of 'Default' in Section 3 (12) of the Code, Viz. 'Due and Payable' means that the 'Default' must be a 'subsisting debt'. Moreover, as per Section 4 of the I & B Code, 2016, a 'Tribunal' is not required to determine the 'Default Amount'. 51. It must be borne in mind that under the I & B Code, 2016, the shift is from 'Inability to Pay' to an 'existence of default'. Undoubtedly, a 'Loan Acceptance Letter' is an evid....
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....on / Entity'. An 'Inter-Corporate Deposit' is an 'Unsecured Borrowing' by the Companies and the Financial Institutions for other 'Corporate Entities', registered under the Companies Act, 2013, dependent upon 'Personal Contracts'. A 'Corporate' having a surplus fund will lend to another 'Corporate', which is in requirement of 'Funds'. Loan & Investment by Company: 58. The term 'Loan' means a 'Lending', delivery by 'One Party' to and receipt of a 'Sum' by 'another Company' upon 'Agreement','express' or 'implied' to 'Repay' it with or without 'Interest'. The core feature of a 'Loan' is the 'Advance of Money' / any 'Article', upon an 'Undertaking' that it shall be 'Returned' and it may or may not carry any 'Interest'. 59. Section 186 of the Companies Act, 2013, pertains to a 'Loan Investment', a 'Guarantee Security' will cover the 'Inter-Corporate Loan', 'Investment Guarantee' or 'Security'. It is to be remembered that the word 'Loan' is not defined under the Companies Act, 2013. However, Section 179 of the Companies Act, 2013 deals with the rest of the loans, 'Instrument Guarantee' or 'Security'. Financial Statement: 60. It is clear from the definition of 'Financial Statement' re....
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....h have become 'due and payable' but have not been paid such demand is made (vide Clause 3 of the 'Corporate Guarantee' dated 29.03.2012). 65. A mere perusal of the Clause 4.1 of the 'Corporate Guarantee' dated 29.03.2012 indicates that the obligation of the 2ndRespondent/Guarantor (LHW) proceeds to the effect that the obligation of the 'Guarantor' contained in this Guarantee shall be in addition to and independent of every other security which the Beneficiary may any time hold in respect of any of the principles obligations under 'ICD Agreement'. 66. In fact, Clause 4.2 of the 'Corporate Guarantee' executed by the Guarantor / 2nd Respondent (LHW) to and in favour of the 1st Respondent/Financial Creditor (GEM / Beneficiary) shows that the obligations of the 'Guarantor' shall be a continuing one, etc. 67. Earlier, a 'Memorandum of Agreement' dated 22.12.2008 was executed between the 'Government of Andhra Pradesh' and the 'Appellant/Lepakshi Knowledge Hub Pvt. Ltd.' ('Project Proponent'). 68. It is to be pointed out that a 'Memorandum of Understanding' dated 07.01.2012 was executed between the 'Appellant / Lepakshi Knowledge Hub Pvt. Ltd.'and the '1st Respondent / Financial Credit....
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....)' or 'Debenture(s)', 'Loan Stock' or 'any similar kind of instrument(s)', certainly it is a 'Financial Debt', as per definition Section 5 (8) of the I & B Code, 2016. 74. In the instant case, the reference made pertaining to the Arbitration Proceedings, etc, are not germane for deciding the 'Application' filed under Section 7 of the Code. There is no provision which bars referring to the Code, if already relief was sought for or pending in another Forum. In fact, Section 238 of the I & B Code, 2016, shall have effect notwithstanding anything inconsistent therein contained in any other 'Law' for the time being inforce or any instrument having effect by virtue of any such 'Law'. Besides this, to put it pinpointedly, the 'Execution and Transfer of Money' in terms of 'Inter-Corporate Deposit' cannot be disputed. Viewed in that perspective, the emphatic plea taken on behalf of the Corporate Debtor is not acceded to by this 'Tribunal'. Likewise, the stand of the Corporate Debtor that the 1st Respondent/Petitioner/Financial Creditor in its Balance Sheets from 2011-12 to 2018-19 had described the 'sum' in issue as 'other investments' but had not mentioned specifically as 'ICD', is a 'fut....
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....d Technology Park Pvt. Ltd.) in CP(IB)/98/BB/2021 and the factum of same being invoked was established (on the side of the 1st Respondent/Petitioner/Financial Creditor), in the present case, the view arrived at by the 'Adjudicating Authority' in admitting the main CP(IB)/107/BB/2021, declaring 'Moratorium' and appointing the 'Interim Resolution Professional' are free from legal flaws. Resultantly, the instant 'Appeal' is devoid of merits and it fails. Background(in Company Appeal (AT) (CH) (INS) No. 216 of 2022): 79. The Appellant / Shareholder of the 2nd Respondent / Corporate Debtor (M/s. Lepakshi Knowledge Hub Private Limited, Bangalore, Karnataka, through its Director, Mr. I. Karunakar Reddy) has preferred the present Company Appeal (AT) (CH) (INS) No. 216 of 2022, before this Appellate Tribunal, on being dissatisfied' with the 'impugned order', dated 03.06.2022, in CP(IB)/98/BB/2021, passed by the 'Adjudicating Authority', ('National Company Law Tribunal', Bengaluru Bench), in admitting the Company Petition. 80. The 'Adjudicating Authority', ('National Company Law Tribunal', Bengaluru Bench), while passing the impugned order in CP(IB)/ 98/BB/2021 (filed by the 1st Responden....
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....h requires particulars of the applicant in Part I, particulars of the corporate debtor in Part II, particulars of the proposed interim resolution professional in Part III, particulars of the financial debt in Part IV and documents, records and evidence of default in Part V. Under Rule 4 (3), the applicant is to dispatch a copy of the application, filed with the adjudicating authority by registered post or speed post to the registered office of the corporate debtor. The speed, within which the adjudicating authority is to ascertain the existence of a default from the records of the information utility or on the basis of evidence furnished by the financial creditor, is important. This it must do within 14 days of the receipt of the application. It is at the stage of Section 7(5), where the adjudicating authority is to be satisfied that a default has occurred, that the corporate debtor is entitled to point out that a default has not occurred in the sense that the ''debt'', which may also include a disputed claim, is not due. A debt may not be due if it is not payable in law or in fact. The moment the adjudicating authority is satisfied that a default has occurred, the application must....
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....cuted between the Petitioner and a third party. 19. We find force in the submissions made by the Learned Senior Counsel appearing for the Petitioner/Financial Creditor. The Memorandum of Understanding dated 07.01.2022, on which the Respondent placed reliance was admittedly executed between the Petitioner and a separate legal entity known as M/s. Lepakshi Knowledge Hub Private Limited. Further, the amount received by the Respondent/Corporate Debtor under the subject Inter Corporate Deposit dated 19.03.2022was not for purchasing of any shares by the Petitioner in the Respondent Company. On the other hand, it was for meeting certain expenses by the Respondent/Corporate Debtor. Hence, the contention of the Petitioner in this regard is rejected. The other contention with regard to the pending Arbitration proceedings etc., have no relevance in the application u/s 7 of the IBC, 2016. The contention of the Respondent/Corporate Debtor that the Petitioner/Financial Creditor in the Balance Sheets shown the subject amount as 'other investments' but not shown as Inter Corporate Deposit and hence the C.P. is liable to be dismissed, is invalid and unsustainable, since the execution and transfer....
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....disputed claims' in Section 7 of the I& B Code, 2016, has no applicability to the composite commercial transactions, wherein it is quite common that one of the terms of reciprocal promises may include a momentary advancement of money for interest. 83. The Learned Counsel for the Appellant projects an argument that the 'Adjudicating Authority' had failed to take into consideration and appreciate that in eight years, since the 'Memorandum of Understanding' and until the malicious litigation in a belated manner by the 1st Respondent/Financial Creditor/Petitioner and ought to have saddled it with the stringent penalty as per Section 65 and 75 of the I & B Code, for its malafide conduct in resurrecting a 'stale claim' by indulging in oral shopping and bench chanting, all of which had resulting in filing the 'Application' under Section 7 of the I & B Code, 2016. 84. The Learned Counsel for the Appellant takes a stand that an inclusion of a 'Disputed Claim' does not render 'disputes'/'arbitration' between the 'Parties' completely as an irrelevant one. 85. The Learned Counsel for the Appellant comes out with a plea that the 'Adjudicating Authority' came to a wrong conclusion by incorrec....
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....k India Venture ('Offshore') Fund (2021) 6 SCC 436. 91. The Learned Counsel for the Appellant contends that the 'Adjudicating Authority' must examine the totality of transaction to see whether 'Default' can be the only 'Irresistible Conclusion'. 92. The Learned Counsel for the Appellant brings it to the notice of this 'Tribunal' that the 2nd Respondent / M/s. Lepakshi Science and Technology Park Private Limited in its 'Reply' to CP(IB)/98/BB/2021 (filed by the 1st Respondent/Financial Creditor/Petitioner) at paragraph 16, had mentioned that 'as LST's business has been in a stand still all along without any regular operations, an entry made contemporaneous to the MoU in 2012, subsisted in the books. Any reference to the ICD qua the Rs.5 Cr. was also removed after FY 2016-17 and the Rs.5 Cr. subsisted as an 'other liability' as a balancing entry towards the cost of land transfer which was incurred as capital expenditure (occurring on the asset's side of the Respondent No. 2's Balance Sheets). It is pertinent to note that the Asset's side entry is not reversible as the Stamp Duty and Registration Charges once paid will not be returned if the transaction is cancelled. As LST incurred....
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...., the Appellant / LKH paid the necessary sale consideration and subsequently the Andhra Pradesh Industrial Infrastructure Corporation had executed numerous Registered Sale Deeds conveying the total land to the Appellant. 98. The Learned Counsel for the 2nd Respondent points out that in the year 2011, the negotiations took place between the 1st Respondent/Financial Creditor and the Appellant to enable the 1st Respondent/Financial Creditor/Petitioner to take part in a part of the Project. It was agreed upon that 2650 Acres out of total land proposed to be developed by the Claimant (subject land) would be transferred to the 2nd Respondent/LST and M/s. LHW, after which, the 1st Respondent will acquire the Equity of LST and LHW for a total consideration of Rs.238,50,00,000/- and in this regard a 'Memorandum of Understanding' dated 07.01.2012 was executed between the Appellant and the 1st Respondent/Financial Creditor (LKH, LST and LSW). 99. The Learned Counsel for the 2nd Respondent / LST points out that the 'Memorandum of Understanding' contained an 'Order of Performance' to take forward the transaction. A cumulative reading of Clause 4.1, 4.2 and 4.3 clearly envisage :- (i) Within....
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....Petitioner to the 2nd Respondent/LST was only in respect of the cost of land transfer from the Appellant to the 2nd Respondent/LST and the LHW. As per the stand of the 1st Respondent/Petitioner, the aforesaid Rs. 5 Crore was to be adjusted in the 'sale consideration' to be paid by the 1st Respondent/Financial Creditor/Petitioner to the 'Lepakshi' Group. 104. The Learned Counsel for the 2nd Respondent contends that the 1st Respondent/Petitioner had not chosen to implement the 'Memorandum of Understanding' and that the whole Project got mired in legal controversy on account of certain criminal allegations levelled against the 'Promoters of Indu Projects Limited', which culminated in filing of Charge Sheet by the Central Bureau of Investigation dated 17.09.2013 in respect of the subject Project and that a 'Provisional Attachment Order' dated 25.03.2015 was issued by the 'Enforcement Directorate' and an 'Appeal' filed before the 'Appellate Authority' is pending. 105. The Learned Counsel for 2nd Respondent / LST submits that the 1st Respondent/Petitioner had never addressed a single correspondence to the Central Bureau of Investigation or the Enforcement Directorate claiming any propr....
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....pleadings in litigation were not detailed and only some facts for the purpose of these proceedings were mentioned. 110. The Learned Counsel for 2nd Respondent / LST submits that the 1st Respondent/Petitioner had invoked the 'Arbitration' on 02.12.2020 and ultimately the 'Arbitration Tribunal' was formed and the said 'Tribunal' granted interim relief qua limited to the shares held in 'Escrow'. 111. The Learned Counsel for 2nd Respondent / LST contends that the 1st Respondent/Petitioner is not a Financial Creditor and a sum of Rs.5 Crore is neither a 'Financial Debt' nor the 1st Respondent/Petitioner is a 'Financial Creditor' as defined under the I & B Code, 2016. Further, the 1st Respondent/Petitioner had failed to exhibit any 'acknowledgement', in writing in respect of the 'Debt' in 3 years before the filing of Section 7 'Application' and the 'Claim' itself is without any basis and barred by limitation. 112. According to the Learned Counsel for 2nd Respondent / LST, the penalty to be imposed on the 1st Respondent/Petitioner as per Section 65 of the Code. Assessment(in CA (AT)(CH) (INS) No. 216 of 2022: 113. This 'Tribunal' points out that in respect of the 'Application' ....
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....ransfer of 2,650 acres of land from the Project Proponent to the Corporate Debtor and the Guarantor. The term of the ICD was set as 6 months with an interest of 18% per annum after the term of the ICD. Further consequent to the ICD on 29.03.2012 the Guarantor had executed a corporate guarantee (''Guarantee'') in favour of the Financial Creditor guarantying repayment of the amount transferred by the Financial Creditor to the Corporate Debtor. * On 16.04.2012 the Financial Creditor, Project Proponent and IndusInd Bank Ltd (''escrow agent'') entered into an escrow agreement by which the entire shares of the Corporate Debtor was deposited with the escrow agent for the benefit of the Financial Creditor as security for the ICD. * Thereafter the Financial Creditor and Project Proponent were in discussion for entering into definitive agreements/share purchase agreement in terms of the MoU when the Project Proponent informed the Financial Creditor that the Andhra Pradesh Government had proposed to cancel the MoA given to the Project Proponent. Consequently no definitive agreement was entered into. The Project Proponent continuously assured the Financial Creditor that all disputes will be ....
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.... Rs.20,84,94,000/- Total Amount Due and Payable Rs.25,84,94,000/- 114. In the instant case, it is pertinently pointed out by this 'Tribunal' that the 'Memorandum of Understanding' dated 07.01.2012 was entered into between the 1st Respondent/Financial Creditor/Petitioner and the Appellant/Lepakshi Knowledge Hub Private Limited. It is latently and patently quite clear that the money received in terms of the 'Inter-Corporate Deposit' dated 19.03.2012, was to deal with the expenses of the 2nd Respondent/Corporate Debtor/LST. Because of the fact that the transfer of money as per 'Inter-Corporate Deposit' was not in controversy/disputed, the stance of the 2nd Respondent/LST that in the Balance Sheets the money in question was not described as 'Inter-Corporate Deposit', but only mentioned under the caption 'other investments' has no legs to stand, in the considered opinion of this 'Tribunal'. 115. In so far as the pleas of the 2nd Respondent/LST pertaining to the 'ArbitrationLis, they have no bearing in deciding the Section 7 'Application' filed under the I & B Code, 2016. Since the 2nd Respondent/Corporate Debtor had not repaid the amount received as per 'Int....