Arham Jewellery vs Golden Wealth Advisory Private Limited

NATIONAL COMPANY LAW APPELLATE TRIBUNALPRINCIPAL BENCH, NEW DELHI Comp. App. (AT) (Ins) No. 1514 of 2023 & I.A. No. 5451 of 2023 IN THE MATTER OF: Arham Jewellery ...Appellant Versus Golden Wealth Advisory Pvt. Ltd. ...Respondent Present: For Appellants : Mr. Y. Batatawala, Ms. Meghna Rao, Adv. For Respondent : None

ORDER

Per: Justice Rakesh Kumar Jain (Oral) 21.03.2024: This appeal is directed against the order dated 06.10.2023

passed by the Adjudicating Authority (National Company Law Tribunal,

Mumbai Bench) by which CP (IB) No. 521/MB/2023 filed by the Appellant

(Financial Creditor) under Section 7 of the Insolvency and Bankruptcy Code,

2016 (in short 'Code') against Golden Wealth Advisory Pvt. Ltd. (Corporate

Debtor) for the resolution of an amount of Rs. 39,73,79,600/- has been

dismissed after perusal of the MOU dated 31.01.2013 in which it has been

mentioned that "The BENEFICIARY has approached the INVESTOR to INVEST

a sum of Rupees (397379600.00) as an Unsecured Borrowing for a period of

12 months on simple interest which can be extended at the will of both

parties...., holding that it was an investment on the part of the appellant and

was not a debt to attract Section 7 of the Code.

2. Notice in the appeal was issued on 07.12.2023. Though the Respondent

has been served through speed post but no one has appeared in this case on

any of the dates. Today also the Respondent is not present. Therefore, they

are proceeded against ex-parte.

3. Be that as it may, Counsel for the Appellant has submitted that there

is a patent error in appreciating the facts by the Adjudicating Authority while

dismissing the application filed under Section 7 of the Code. In this regard,

he has referred to the reply/affidavit filed by the Respondent before the

Adjudicating Authority in response to the application filed under Section 7 by

the Appellant. Para 5 to 13 of the said affidavit needs to be mentioned which

are reproduced as under:-

"5. That the Corporate Debtor had approached the Financial Creditor to invest a sum of Rs. 39,73,79,600/- (Rupees Thirty-Nine Crores Seventy-Three Lakhs Seventy-Nine Thousand Six Hundred only) as an Unsecured Borrowing for a period of l2 months on simple interest.

6.The Financial Creditor accordingly, disbursed an amount of Rs.

39,73,79,600/- (Rupees Thirty Nine Crores Seventy Three Lakhs Seventy Nine Thousand Six Hundred only) to the Corporate Debtor as unsecured loans in following tranches, details of which are mentioned below:

Date Amount (Rs.) 29.01.2013 9,50,04,595 29.01.2013 9,50,05,375 29.01.2013 9,50,02,870 30.01.2013 9,50,01,970 30.0l.2013 1,73,64,790 TOTAL 39,73,79,600

7. The transaction in respect to said unsecured loan was duly recorded in the Memorandum of Understanding ("MOU") dated 31/01/2013 which is annexed as Annexure D to the Captioned Company Petition.

8. I say and submit that till date Corporate Debtor has failed to make repayment of any amount of the Unsecured Borrowing availed from the Financial Creditor and hence, an amount of Rs. 39,73,79,600/- (Rupees Thirty-Nine Crore Seventy-Three Lakh Seventy-Nine Thousand and Six Hundred) is still due and payable.

9. I say and submit that Financial Creditor on several occasions have communicated and recall the outstanding unsecured borrowing. However, the Corporate Debtor sought time on several occasions to make payment as the Corporate Debtor is facing financial difficulties.

10. I say and submit that the Corporate Debtor had somewhere in the month of November, 2022 had sought a last opportunity to make payment and had agreed to provide with the chart of repayment schedule. However, due to financial instability, the Corporate Debtor could not submit any repayment schedule.

11. I say and submit that the Corporate Debtor is in receipt of Recall notice dated 05 .12.2022 sent by the Financial Creditor to the Corporate Debtor thereby calling upon the Corporate Debtor to pay of the outstanding amount.

12. I say and submit that at this juncture the Corporate Debtor is unable to conduct business effectively and hence the non-payment of financial debt is not intentional but are a result of unfo1iunate circumstances beyond the control of Corporate Debtor which has resulted in financial crisis within the Corporate Debtor.

13. I say and submit that the claim of Financial Creditor of Rs. 39,73,79,600/- is a debt which is due and payable. However, after making several rigorous efforts to make repayment of the same, the Corporate Debtor has defaulted in making payment of the same."

4. He has further referred to the balance sheet of the Corporate Debtor as

on 31.03.2022 in which the amount being claimed by the Appellant is shown

as unsecured borrowing which has been repeated in the subsequent balance

sheet for the year 2022-23 as well. It is further submitted that the amount in

question was paid by the Appellant in five tranches starting from 29.01.2013

to 30.01.2013 and MOU was entered into between the parties on 31.01.2013

after the amount was paid. It is submitted that in para 13 of the affidavit filed

by the Corporate Debtor it has been admitted that "I say and submit that the

claim of Financial Creditor of Rs. 39,73,79,600/- is a debt which is due and

payable"

5. We have heard Counsel for the Appellant and perused the record with

his able assistance.

6. From the evidence which has been brought on record much less the

balance sheets of the Corporate Debtor, already referred to hereinabove, and

also the admission of the Respondent in the reply filed to the application under Section 7, there is no doubt that it was a loan and not investment on

the part of the appellant, therefore, the amount paid by the Appellant falls

within the definition of debt and the application filed under Section 7 is fully

maintainable.

8. Consequently, the appeal succeeds. The impugned order is set aside.

The application bearing CP (IB) No. 521/MB/2023 is hereby resorted and the

matter is sent back to the Adjudicating Authority to proceed further in the

application filed under Section 7 in accordance with law. The parties are

directed to appear before the Adjudicating Authority on 22nd April, 2024.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Mr. Naresh Salecha] Member (Technical)

[Mr. Indevar Pandey] Member (Technical) Sheetal/Ravi