TMI Blog2022 (11) TMI 159X X X X Extracts X X X X X X X X Extracts X X X X ..... interest rates mentioned in loan agreements have not been noticed by the Adjudicating Authority and the interest rate of 24% p.a., which is included in the decree by Hon ble Delhi High Court, has been taken as the first instance when interest was levied on the amount of debt. The jural relationship between the parties is also clearly established in the loan agreements and thus the amounts advanced by the Appellant are covered in the definition of financial debt under sub-section (8) of section 5 of the IBC. The decision in Dena Bank [ 2021 (8) TMI 315 - SUPREME COURT ] makes it clear that the judgment or decree of money in favour of the financial creditor passed by DRT or any other tribunal or court would give rise to a fresh cause of action for the financial creditor, to initiate proceedings under section of the IBC. In the present case, the judgment-decree dated 11.1.2018 of the Hon ble High Court of Delhi in favour of Appellant thus provides a fresh cause of action to the Appellant to move application under section7 of IBC. The loan agreements also establish the jural relationship between the Appellant and Respondent. The Adjudicating Authority has erred grossly by n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .m. payable on half yearly basis. 3. The Appellant has further stated that he submitted cheques, meant for repayment issued at the time of execution of the loan agreement in the bank, for payment, which were dishonoured, whereafter he initiated proceedings under the Negotiable Instruments Act against the Respondent. He has further stated that a Compromise Deed dated 31.8.2013 was executed between the Appellant and Respondent and a cheque of an amount as per the Compromise Deed was given to the Appellant which was also dishonoured upon presentation in the bank. Frustrated at the non-repayment of the amount given by the Appellant, he preferred a summary suit being Civil Suit (Original Side) No. 66 of 2016 before the Hon ble High Court of Delhi for recovery of an amount of Rs.4,38,00,617 along with an admitted interest @ 24%. Another Compromise Deed dated 23.12.2016 was executed between the parties, whereby the Respondent gave two post-dated cheques bearing nos. 000130 and 000132 dated 31.12.2017 for a total amount of Rs.2,38,61,907, but these cheques were also dishonoured upon presentation in the bank. The Appellant has submitted that the Respondent made a part payment of Rs. 25 l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reement dated 31.3.2010 for an amount of Rs.2,00,00,000 (Rupees Two Crores only) for a period of 15 days carrying an interest rate of 3% p.m. payable on half yearly basis, with a penal interest @ 10% per month over and above the interest on the loan in case of delay or default in payment, and has argued that both the loan agreements, established a jural relationship of financial creditor-corporate debtor between the Appellant and the Respondent. He has further argued that the loans are for time value of money and are, therefore, financial debts under the definition of financial debt in the IBC. 7. The Learned Senior Counsel for Appellant has further argued that cheques were provided for repayment, which were dishonoured on presentation in the bank and even after a Compromise Deed was signed between the parties on 31.8.2013 consequent to proceedings under the Negotiable Instrumental Act, the cheque given in response to the Compromise Deed, was dishonoured on presentation in the bank and the Appellant was forced to prefer a Civil Suit bearing No. Civil Suit (Original_Side_66 of 2016) before the Hon ble High Court of Delhi on 1.2.2016 for recovery of overdue amount along with int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the matter of Kotak Mahindra Bank Limited vs. A. Balakrishnan Anr. (2022 SCC OnLine SC 706), wherein it is held that a liability in respect of claim arising out of recovery certificate would be a financial debt within the meaning of clause (8) of section 5 of IBC and this judgment has also upheld the judgment of two-Judge Bench in the case of Dena Bank (supra) as being correct in law. He has, therefore, claimed that on account of the two loan agreements cited by him earlier, a clear jural relationship that of a financial creditor and debtor is established between the Appellant and Respondent and the debt advanced by the Appellant qua the two loan agreements are financial debts which are in default and further section 7 application which has been filed within limitation should have been admitted by the Adjudicating Authority. 10. The Learned Counsel for Respondent has argued that the alleged loans have been shown as interest-bearing loans by the Appellant by manipulation of books of accounts and falsification of the component of interest therein qua the amounts lent to the Respondent company in 2010 and therefore by misrepresentation of facts before the Hon ble High Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o not involve a time value of money. 14. We look at two loan agreements wherein the relevant clauses regarding the amount, period and interest rates are mentioned, which are reproduced below for reference:- Loan Agreement dated 24.2.2010 at pp.59-61 of the appeal paper book. 1. At the request of the Borrower, the Lender lends and advances to the Borrower a loan of Rs. 2,50,00,000/- (Rupees Two Crores and Fifty Lakhs only) for a period of 2 months. 2. The said loan shall carry interest at the rate of 12.75% p.a. payable on half-yearly basis. In case of delay or default in payment, either of the principal or of the interest or any part thereof, the Lender shall be entitled and the Borrower liable to pay a penal interest @ 10% per month over and above the interest mentioned hereinabove. Loan Agreement dated 31.3.2010 attached at pp. 62-64 of the appeal paperbook. 1. At the request of the Borrower, the Lender lends and advances to the Borrower a loan of Rs. 2,00,00,000/- (Rupees Two Crores only) for a period of 15 days. 2. The said loan shall carry interest at the rate of 3% per month, payable on half-yearly basis. In case of delay or default in paym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Delhi of 11.1.2018 makes it clear that the Hon ble High Court has passed a decree against the defendants (Anjali Technoplast Limited Ors.) for an amount of Rs.4,38,00617 alongwith interest @ 24% p.a. from 1.2.2016 alongwith pendente lite till the date of actual payment of the full amount after deducting Rs.25 lakhs paid by the plaintiff. It appears that the interest rates mentioned in loan agreements have not been noticed by the Adjudicating Authority and the interest rate of 24% p.a., which is included in the decree by Hon ble Delhi High Court, has been taken as the first instance when interest was levied on the amount of debt. We do not think this the correct reading of the loan agreements as loan amounts have associated interest rates and time periods. The jural relationship between the parties is also clearly established in the loan agreements and thus the amounts advanced by the Appellant are covered in the definition of financial debt under sub-section (8) of section 5 of the IBC. We are also of the clear opinion that no fraud has been played by the operational creditor on obtaining the decree from Hon ble High Court of Delhi. Moreover, the corporate debtor has not t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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