9911796707
TMI Blog2023 (11) TMI 527X X X X Extracts X X X X X X X X Extracts X X X X ..... f the case to be noticed for deciding this Appeal are:- 2.1. Appellant transferred an amount of Rs.2.6 Crores to the Corporate Debtor between 04.03.2017 to 18.05.2017. With regard to amount transferred by the Appellant to the Corporate Debtor, different emails were exchanged between the parties for execution of Memorandum of Understanding, however, no concluded contract could be executed between the parties. Exchange of e-mails took place between the parties from November, 2017 till 09th April, 2018. Appellant sent a legal notice dated 02.08.2021 to the Corporate Debtor asking the Corporate Debtor to refund the amount of Rs.2.6 Crore with interest. After the aforesaid notice, reply was given on 11.08.2021 to the notice stating that the Appellant never gave any advance or loan to the company. The Appellant thereafter filed a petition under Section 7 on 13.11.2021. The Appellant in Section 7 Application claim an amount of Rs.2.6 Crores as financial debt along with the interest of 24%. Section 7 application was opposed by the Corporate Debtor. The Adjudicating Authority by the impugned order dated 06.07.2022 dismissed Section 7 application holding that the Appellant failed to prove t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C. 7. Learned Counsel for the Respondent refuting the submissions of the Counsel for the Appellant submits that the amount as claimed by the Appellant was never advance against any share application money. It is submitted that Section 42 of the Companies Act, 2013 on which reliance has been placed is not attracted. There has to be several statutory compliances before issuance of shares on private placement basis. The issuance of private placement offer by the Corporate Debtor is essential to attract Section 42 and at no point of time, Corporate Debtor has issued any private placement offer. There has to be Board Resolution and Special Resolution of the Corporate Debtor for issuance and allotment of shares on preferential basis/private placement basis. Several statutory compliances including submission of relevant forms are necessary which having never done, Section 42 is not attracted. Appellant has failed to place on record any piece of evidence to prove that the sum of Rs.2.6 Crores were deposited as Share Deposit Money. Appellant has himself admitted in his application under Section 7 that there was no valid concluded agreement between the parties with respect to allotment of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the Appellant has relied on Section 42 of the Companies Act, which is to the following effect:- "42. Offer or invitation for subscription of securities on private placement xxx xxx xxx (6) A company making an offer or invitation under this section shall allot its securities within sixty days from the date of receipt of the application money for such securities and if the company is not able to allot the securities within that period, it shall repay the application money to the subscribers within fifteen days from the date of completion of sixty days and if the company fails to repay the application money within the aforesaid period, it shall be liable to repay that money with interest at the rate of twelve per cent. per annum from the expiry of the sixtieth day: Provided that monies received on application under this section shall be kept in a separate bank account in a scheduled bank and shall not be utilised for any purpose other than- (a) for adjustment against allotment of securities; or (b) for the repayment of monies where the company is unable to allot securities xxx xxx xxx (10) If a company makes an offer or accepts monies in contravention of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notified by the Central Government in this behalf in consultation with the Reserve Bank of India or any regional financial institutions or Insurance Companies or Scheduled Banks as defined in the Reserve Bank of India Act. 1934 (2 of 1934): (v) any amount received against issue of commercial paper or any other instruments issued in accordance with the guidelines or notification issued by the Reserve Bank of India; (vi) any amount received by a company from any other company; (vii) any amount received and held pursuant to an offer made in accordance with the provisions of the Act towards subscription to any securities, including share application money or advance towards allotment of securities pending allotment, so long as such amount is appropriated only against the amount due on allotment of the securities applied for. Explanation.- For the purposes of this subclause, it is hereby clarified that - (a) Without prejudice to any other liability or action, if the securities for which application money or advance for such securities was received cannot be allotted within sixty days from the date of receipt of the application money or advance for such securities and such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Acceptance of Deposit) Rules 2014 and its explanation are not attracted. Rule 2(vii) contemplates any amount received and held pursuant to an offer made in accordance with the provisions of the Companies Act, 2013. No proof of any offer made in accordance with the provisions of the Companies Act, 2013 by the Company having brought on record Rules itself cannot be held applicable. 15. Learned Counsel for the Appellant has placed reliance on the judgments as noted above to support his submission that the Share Application Money should be considered as disbursement against consideration for time value of money and be treated as financial debt within the meaning of Section 5(8). The above judgment cannot come to any aid of the Appellant since Appellant has failed to prove that an amount of Rs.2.6 Crores advanced by him to the Corporate Debtor was against any offer made by the company for private placement of shares. Counsel for the Appellant has also submitted that the judgment of this Tribunal in "Pramod Kumar Sharma" (supra) is not applicable. We need not enter into the above submission since we have already held that an amount of Rs.2.6 Crores was not towards any offer for private ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of summit units. Adjudicating Authority further made observations that this is a completely different arrangement which has been suppressed by the Financial Creditor. Any email that amount shall be adjusted subsequently can in no manner effect the debt so long as it remains due. We are of the view that the observations made against the Appellant by the Adjudicating Authority in paragraph 27 are not correct. 19. Counsel for the Appellant is right in his submission that in reply filed by the Corporate Debtor in this Appeal now they are stating that the amount of Rs.2.6 Crores has been adjusted of all accounts between the parties and its group companies and entities. In paragraph 15 of the reply of the Corporate Debtor, following has been stated:- "15) I say that the Appellant suppressed the fact of adjustment of the entire sum of Rs. 2,60,00,000/- (Rupees Two Crore and Sixty Lakh only) by virtue of various financial adjustments entered into between the parties herein and also to the associate and group companies of the Appellant and his family members. I say that the Appellant has suppressed the material facts and events with respect to the various verbal discussions held betwee ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
