Jagdambey International vs Visa Powertech Pvt Ltd

Jagdambey International ...Appellant

Vs

Visa Powertech Pvt. Ltd. ....Respondent Present: For Appellant: Mr. Manish Verma, Advocate

For Respondent: Mr. Bishwajit Dubey and Ms. Surabhi Khattar, Advocates

ORDER

02.12.2019 Heard learned Counsel for both the sides. This appeal has

been filed by the Appellant- Jagdambey International claiming to be Financial

Creditor who filed Application CP(IB) 4023/I&BP/MB/2018 under Section 7 of

Insolvency and Bankruptcy Code, 2016 (in short 'IBC') against the Visa

Powertech Pvt. Ltd.- Corporate Debtor before the Adjudicating Authority

(National Company Law Tribunal), Mumbai Bench, Mumbai. The application

came to be dismissed on 06.03.2019. Hence the present appeal.

2. It is the case of the Appellant and it has been argued that in

September/October, 2015, the Director of the Corporate Debtor- Mr. S.B.

Agarwal had met Mr. Amit Goel- the partner of the Appellant and requested for

extending financial help. It is stated that accordingly the Appellant, on

20.10.2015 transferred Rs. 28 lakhs through Banking channel and on

23.10.2015 Rs. 17 Lakhs through Banking channel to the Corporate Debtor.

Learned Counsel submits that the amounts transferred were towards Financial

loan. Learned Counsel further states that on 26.11.2015, the Corporate Debtor

Company Appeal(AT)(Insolvency) No. 468 of 2019 Page 1 of 4 had returned Rs. 5 lakhs and Rs. 40 lakhs were still to be recovered. It is

submitted that the Financial Creditor had requested on phone for return of the

money and when the same was not returned, a Demand Notice dated 25.09.2018

(page 96 of the Paper Book) was sent. The argument is that the Respondent has

replied notice vide Exhibit-C dated 23.10.2018 (page 147 of the Paper Book) and

claimed that the amount forwarded was on behalf of R.K. Singh and Sai Ysh

Solar for commissioning of Solar Power Project and that it was not towards loan.

Learned Counsel submits that when the matter was filed before the Adjudicating

Authority, different stand was taken by the Corporate Debtor that the amount

was towards equity contribution for the Solar Project and thus it was stated that

there were contradictory stands.

3. The Adjudicating Authority heard the parties and observed:

...

"12. It is unclear why the Petitioner was keeping quiet for

three years without asking for the principal or interest when

Rs. 40 lacs is advanced to the Corporate Debtor as a

financial debt except the only Demand Notice dated

25.09.2018. No document was produced in support of the

loan showing this amount as a financial debt except saying

that there is an oral agreement.

13. The Petition submitted that the payment made to the

Corporate Debtor was accounted by them under the

heading "other current assets" for the year 2015-16 the

same was accounted under the heading "loans and

advances". It is not even the contention of the Petitioner that

Company Appeal(AT)(Insolvency) No. 468 of 2019 Page 2 of 4 interest has been charged to the Corporate Debtor and the

same was debited to the account of the Corporate Debtor.

The same amount of Rs. 40 lacs was only shown in the

Balance Sheet for both the years which means that no

interest was charged. Hence the Petition cannot say that the

money is given for interest but subsequently also in the

amended Form-1, the claim for interest was given up by the

Petitioner and hence the transaction cannot fit in the

definition of "Financial Debt" as defined under the Code. It

is not the case of the Petitioner that they are the

shareholders/directors/promoters of the Corporate Debtor

and had given interest fee loan to the Corporate Debtor, so

that they will get some indirect benefit by increase in the

earning of the Corporate Debtor or by a saving in interest

expense since there is no outgo on account of interest

payment and ultimately there is some indirect monetary

benefits to the stake holders so that the amount advanced

can be considered as "Financial Debt".

14. Per contra the Corporate Debtor claims that the

amount paid by the Petitioner is towards the equity

contribution for the solar project, on behalf of Sai Ysh Solar

and accordingly the payment made by the Petitioner was

credited to the account of Sai Ysh Solar on 05.12.2015 and

produced the ledger account to that effect. Further, the

Corporate Debtor as early as on 04.08.2015 requested the

Company Appeal(AT)(Insolvency) No. 468 of 2019 Page 3 of 4 partner of the Petitioner to pay a sum of Rs. 67,85,575/- for

commissioning the solar project. Hence, the contentions of

the Corporate Debtor in this regard cannot be ignored totally

considering the relationship between the parties and the

correspondence between the Corporate Debtor and the

partner of the Petitioner."

...

4. Learned Counsel for the Appellant further states that it was an oral

transaction and he is unable to show from the documents that the amount

advanced was by way of a Financial Loan for time value of money. Learned

Counsel submits that he was only relying on ledger entries and balance sheet of

its partnership firm to show that it was Financial debt. There is no document to

show that there was any interest paid or recovered or claimed. Appellant is

unable to show that money transferred created a Financial debt.

5. Going through the reasons recorded by the Adjudicating Authority, we are

unable to accept the appeal that there was Financial Debt and default. We agree

with the Adjudicating Authority.

6. There is no substance in the appeal. The appeal is dismissed. No costs.

[Justice A.I.S. Cheema] Member (Judicial)

(Kanthi Narahari) Member(Technical)

(V P Singh) Member(Technical) Akc/Md.

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