TMI Blog2022 (9) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... of this Appeal may not serve the purpose. Instead it is intended to dismiss the present appeal with imposing heavy cost. There are many circumstances which have been discussed suggests that either lending loan by the appellants were only paper transaction/sham transaction or said loans were shown to be repaid within one or two days from the date of lending. In case of Appellant No.1, this fact has already been established and noticed - it is considered that the appellants have abused the process of the Court and as such it is a fit case which can be dismissed with imposition of a cost of Rs.1 lakh. The Appellants are directed to deposit the cost of Rs.1 lakh in the account of Prime Minister s National Relief Fund within one month from the date of this order - The Appeal stands dismissed with cost of Rs.1 lakh on the Appellants. - COMPANY APPEAL ( AT ) ( INSOLVENCY ) NO. 940/2022 - - - Dated:- 2-9-2022 - ( Justice Ashok Bhushan ) Chairperson , ( Justice Rakesh Kumar ) Member ( Judicial ) And ( Dr. Ashok Kumar Mishra ) Member ( Technical ) For the Appellant : Mkr Gorav Mitra , Ms Pratiksha Sharma, Mr Ankit Acharya , Mr Mueed Shah and Ms Niharika Singh , Advocates For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely Active Commercial Pvt Ltd into Narsingh Mercantile Pvt Ltd and application for amalgamation of lenders company namely Nikita Vyapaar into Narsingh Mercantile Pvt Ltd. Subsequently, by the order dated 05.01.2016 by Hon ble Calcutta High Court in a Company Petition, the amalgamation was allowed. 4. It is further case of the Appellants that in the financial year 2014-15, 2015-16, Corporate Debtor deducted TDS of Rs.96,061/- on interest of Rs.11,35,615/- paid to the account of Prarthana Sales Pvt Ltd and a sum of Rs.2,12,209/-being TDS on interest of Rs.25,09,588/- was paid to the account of Narsingh Mercantile Pvt Ltd. 5. On the record it is evident that though Corporate Debtor had deducted TDS on interest in the financial year 2014-15 and 2015-16 thereafter there is nothing on record to suggest whether interest was paid or not by the Corporate Debtors. Subsequently to the reasons best known to both the Appellants, after lapse of several years and that too after the change of the management of the Corporate Debtor in view of orders passed in a SARFEASI Proceeding on 23.01.2020 two demand notices were issued demanding the refund of debt amount to the Corporate Debtor. The Cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Debtor which was legally recoverable by the appellants. 7. In the appeal though it was listed for the first time the Respondent had entered appearance through its counsel. Learned counsel for the respondent opposed the appellant submissions that the order passed by the NCLT is a detailed order which assigns detailed reasons for coming to the conclusion that the said corporate debt claimed by the appellants were sham transactions and as such Learned NCLT discussing all the elements and facts has rejected the petition filed under Section 7 of the IB Code filed by the Appellants. 8. Besides hearing learned counsel for the parties we have minutely perused material available on record and after going through the same prima facie we are of the opinion that the invoking Appellate jurisdiction of this Tribunal by the Appellant was simply an abuse of the process of the Court. 9. Before dwelling into the matter, at the outset it is necessary to examine the so called agreement which was the basis for claiming corporate debt by the appellants against the Respondent/Corporate Debtor. The first agreement for disbursement of loan starts from running page 46 of the Volume 1 of Memo of App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rivate Limited company incorporated in India under the Companies Act, 1956 bearing CIN:U52190WB2011PTC157333 and having its registered office at 1, Crooked Lane, 2nd Floor, Room No.205, Kolkata 7000696, West Bengal, hereinafter referred to as the Lender which expression unless repugnant to the context shall mean and include its legal representatives, assignee, nominee(s) and administrator. Whereas both the Borrower and the Lender have agreed to execute a Loan Agreement dated 14th day of April, 2014 for not exceed a sum of Rs.2,70,00,000 (Rupees Two Crores Seventy Lakhs only) to the Borrower on terms and conditions enumerated hereinbelow: 1. That the Interest Rate for Loan Disbursement i.e. 10% per annum is payable calendar quarter to the Lender in arrears subject to adjustment for tax deduction at source as per Indian Income Tax Act, 1961. 2. That with respect to any matter under this Agreement, the competent courts within the local limits of whose jurisdiction, the Borrower resides or ordinarily carries on his business, or personally works for gain, such courts will have exclusive jurisdiction over this Agreement. 3. That the Lender shall grant INR 2,70,00,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... West Bengal, hereinafter referred to as the Lender which expression unless repugnant to the context shall mean and include its legal representatives, assignee, nominee(s) and administrator. Whereas both the Borrower and the Lender have agreed to execute a Loan Agreement dated 15th day of December, 2014 for not exceed a sum of Rs.50,00,000 (Rupees Fifty Lakhs only) to the Borrower on terms and conditions enumerated hereinbelow: 1. That the Interest Rate for Loan Disbursement i.e. 10% per annum is payable calendar quarter to the Lender in arrears subject to adjustment for tax deduction at source as per Indian Income Tax Act, 1961. 2. That with respect to any matter under this Agreement, the competent courts within the local limits of whose jurisdiction, the Borrower resides or ordinarily carries on his business, or personally works for gain, such courts will have exclusive jurisdiction over this Agreement. 3. That the Lender shall grant INR 50,00,000/- through net banking channel. 4. The amount borrowed by the Borrower shall be construed as Inter Corporate Deposits. 5. The Lender company has filed an application for amalgamation of its company named A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mated with Narsingh Mercantile Pvt Ltd) is the same. The registered of both the companies as per agreements is Crooked Lane, 2nd Floor, Room No.205, Kolkata, West Bengal 10. It is also peculiar that though the aforesaid agreements were mainly entered for disbursement of loan, no fix period has been mentioned regarding repayment of the loan amount. On the contrary it has simply been indicated in paragraph 5 of agreement dated 14.04.2014 and paragraph 6 in agreements dated 13.10.2014 and 15.12.2014 that the amounts shall be repaid on demand from the lenders. The borrowers will be allowed 10 days time from the date of receipt of demand notice from the lenders to repay the loan amount alongwith interest. As per paragraph 1 of the aforesaid agreements the interest rate for loan disbursement i.e. 10% p.a. is payable calendar quarter to lender in arrears subject to adjustment for tax deduction at source as per Income Tax Act, 1961. In the paragraph 7(b) of the Memo of Appeal it has been stated by the Appellants that in the financial year 2014-15 and 2015-16, Corporate Debtor deducted TDS of Rs.96,061/- on interest of Rs.11,35,615/- paid to the account of Prathana Sales Pvt Ltd and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... :- As per the MCA Records filed by the Corporate Debtor, both the Financial Creditors have a common registered address i.e. 16 Strand Road, 7th floor, Room No.709A, Kolkata, WB 700001. The Corporate debtor has also placed on record the Forensic Audit report dated 14.01.2021 which mentions in paragraph 16.1.1.1 that the analysis of Financial statements of the corporate debtor reveals that it had repaid/adjusted unsecured loans/operational debts during FY 2015-16 and 2016-17 amounting to preferential transactions as belows: S. No. Party Name Amount repaid 1 Nikita Vyapaar Pvt Ltd 1.12 crore 2 Narsingh Mercantile Pvt Ltd 0.07 crore 3 Prarthana Sales Pvt Ltd 0.05 crore 4 Active Commercial Pvt Ltd 0.53 crore 12. Learned Adjudicating Authority has minutely examined the issue relating to lending loan by Appellant No.1, Prarthana Sales Pvt Ltd, loan given by Active Commercial Pvt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the entire period. Hence, the real and actual source of all such credits is not readily ascertainable in view of layering of money. In the present case of the assessee, same modus operandi was followed. (emphasis supplied) 27. The Income Tax department further found that Prarthana was a paper/ shell company of one Mr. Sandeep Surekha who is referred to as an entry operator / accommodation entry provider. The subsequent relevant observations from the Income Tax order are as below:- 6.3.d. During the course of this proceeding notice u/s 133(6) of the Act was issued to Divya J Electronics Pvt Ltd, M/s NGPS Solution Pvt Ltd, M/s Prarthana Sales Pvt Ltd M/s Ranbhumi Marketing Pvt Ltd production of evidences related to transaction in form of unsecured loan. But no plausible explanation has been received from the parties. The assessee was, thereafter, asked to substantiate its claim of unsecured loan by producing the said party along with supporting documents and evidences but no compliance was made from the assessee end. As per seized material, the assessee company received unsecured loan of Rs. 3,30,00,000/- from the above mentioned companies. . 7.a On overal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs in the country but more particularly in Kolkata, who provide such unsecured loan for a commission. Assessee's non- cooperation and evasive tactics proves its conduct. (emphasis supplied) 28. Ultimately, the Income Tax department held that the Corporate Debtor (assessee) had failed to establish the genuineness of the transactions and in exercise of its power u/s 68 of the Income Tax Act, added Rs 3,30,00,000 as income of the assessee. 14. Finally before coming to the conclusion that there was not existence of bona fide financial debt and rejecting the petition filed under Section 7(1) of the IB Code as not maintainable the NCLT has examined several instances which have been noted in paragraph 31 and 32 31. In addition to the above, there are other circumstances which prompt and compel us to conclude that there is something more than what meets the eye. These circumstances are:- (i) All loan agreements are of the year 2014. They are almost identically worded except with respect to details of the lenders and the quantum of amounts to be disbursed. (ii) All loan agreements postulate giving of unsecured loans. It is also unusual that there is no tenur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on the genuineness of the transactions alleged to be financial debt by the Financial Creditors. The facts regarding existence of Financial Debt, disbursement and default do not reconcile with the documents placed on record. On top of this, as stated above the Assessment Order passed in respect of the Corporate Debtor and the Forensic Audit Report further strengthen the suspicion in respect of the authenticity and bona fides of the transactions in question. The Financial Creditor has argued that the Assessment Order is only applicable with regards to assessee and does not bind the Financial Creditors. It is further contended that the same only speaks of Prarthna. This objection is unwarranted. We have not held that the Income tax Assessment Order is binding on this Tribunal. We are of the view that the entire gamut of facts, the interrelationship between the Financial Creditors (and Nikita and Active which merged into Narsingh), the forensic Audit Report and the analysis of the facts that we have done above, leave us unpersuaded to commence CIRP against the Corporate Debtor. 15. On examination of the impugned order and material available on record there is serious doubt on the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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