Bankey Bihari Goyal vs Ambrane India Private Limited & Anr

Bankey Bihari Goyal ....Appellant Vs. Ambrane India Pvt. Ltd. & Anr. ...Respondents For Appellant: Mr. Abhishek Anand and Mr. Sahil Bhatia, Advocate. For Respondents: Mr. Ashok Juneja, Advocate for R-1.

ORDER

(Through Virtual Mode)

29.03.2022: Heard Learned Counsel for the Appellant.

2. This Appeal has been filed against the order and judgment dated

12.01.2022 of the Adjudicating Authority (National Company Law Tribunal),

New Delhi, Court-VI by which the Application filed by the Respondent-

Financial Creditor has been admitted. The Appellant aggrieved by the said

order has come up in the Appeal. Few facts are necessary to be noted for

deciding this Appeal:-

An amount of Rs. 1,25,00,000/- was disbursed to the Appellant after

the Board Resolution dated 10.01.2018. The case of the Financial Creditor

was that amount of Rs. 1,25,00,000/- was unsecured loan disbursed to the

Corporate Debtor against interest @ 9% per annum to be compounded on

31.03.2018 and to be repaid on or before 31.12.2018. The said amount was

disbursed through NEFT made by the name of BJ Infotech on 30.01.2018. A 2

legal notice was given by the Financial Creditor on 06.08.2019 on account of

non-payment of the loan to the Corporate Debtor and thereafter the

Financial Creditor filed an Application under Section 7 claiming for an

amount of Rs. 1,25,00,000/- with interest. The Application was opposed by

the Corporate Debtor and Corporate Debtor submitted that no loan has been

taken by the Corporate Debtor from the Financial Creditor and no written

agreement has been produced by the Financial Creditor between the

Financial Creditor and the Corporate Debtor with regard to grant of

unsecured loan. However, it was not denied that amount was disbursed by

BJ Infotech. The Adjudicating Authority after hearing the parties, being

satisfied that BJ Infotech was only trade name of the Financial Creditor and

disbursement of the amount has not been disputed, admitted the Section 7

Application. Aggrieved by the order admitting the Application under Section

7, the Appellant has come up in this Appeal.

3. Shri Abhishek Anand, learned Counsel for the Appellant submits that

there was no written contract for disbursement of the loan. He submits that

as per the Insolvency and Bankruptcy (Application to Adjudicating Authority)

Rules 2016, the 'financial contract' as defined in Rule 3(1)(d) includes the

tenure of the debt, interest payable and date of repayment which having not

been proved herein, there was no financial contract and the Adjudicating

Authority committed error in admitting the Application under Section 7.

4. We have considered the submissions of the learned counsel for the

Appellant and perused the record.

Comp. App. (AT) (Ins.) No. 192 of 2022 3

5. In the present case, there is no dispute regarding disbursement of

amount of Rs.1,25,00,000/-. In this context, we have looked into the balance

sheet ending 31.03.2018 which has been brought on the record in the

Appeal itself at Page 383 under the heading 'Note No. 4 Short-term

borrowings', it was mentioned "loans repayable on demands from others" in

which against 'B J Infra unsecured' amount of Rs.1,25,00,000/- was clearly

mentioned. The balance sheet of the Corporate Debtor at Page 383 as noted

above is clear admission of unsecured loan taken from B J Infra which was

repayable on demands. The submission of the learned counsel for the

Appellant that there was no contract with regard to tenure of the loan is

belied by the balance sheet of the Corporate Debtor itself. When the loan is

payable on demand, the tenure is clearly provided therein.

6. Now, coming to the Rule 3(d) which has been relied by learned counsel

for the Appellant. Rule 3(d) of the Adjudicating Authority Rules, 2016

provides as follow:-

"(d) "financial contract" means a contract between a corporate debtor and a financial creditor setting out the terms of the financial debt, including the tenure of the debt, interest payable and date of repayment;"

7. There cannot be any dispute with the definition of 'financial contract'

and the ingredients which are required to the fulfilled for contract to be

treated as financial contract but the Rule 3(d) or any of the provisions in the

Code does not indicate that a formal written contract is necessary for

treating a contract to be a financial contract. It is well settled that contract

Comp. App. (AT) (Ins.) No. 192 of 2022 4

can be entered both orally as well as by written contract and all ingredients

of financial contract can be very well proved even if there is an oral contract.

8. In the facts of the present case and the materials which were placed

before the Adjudicating Authority, the Adjudicating Authority was satisfied

that there was financial contract which was entered between the parties and

the amount was advanced to the Corporate Debtor with regard to which

there is no dispute. We do not find any error in the impugned order of the

Adjudicating Authority admitting the Application under Section 7. There is

no merit in the Appeal. The Appeal is dismissed.

[Justice Ashok Bhushan] Chairperson

[Dr. Alok Srivastava] Member (Technical)

[Shreesha Merla] Member (Technical)

Anjali/nn

Comp. App. (AT) (Ins.) No. 192 of 2022