Radha Kohli & Ors vs Logical Jewellers Pvt. Ltd
- CitationCompany Appeal (AT) (Insolvency) No. 565 of 2019
Ratio decidendi
The rule this decision rests on
A deposit of money with a corporate debtor does not, without more, make the depositor a financial creditor. Whether a person is a financial creditor under Section 5(7) read with Section 5(8) of the Insolvency and Bankruptcy Code, 2016 depends on whether the amount advanced was a financial debt, and that requires evidence of the disbursement's character, such as a time value of money element; the mere fact that a sum was deposited, or that a loan may have been taken, is not sufficient to bring every claimant within that definition.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
K.K. Kohli & Ors. ...Appellants
Versus
M/s. Trustworthy Gems & Jewellers Pvt. Ltd. ...Respondent
Company Appeal (AT) (Insolvency) No. 566 of 2019
IN THE MATTER OF:
Radha Kohli & Ors. ...Appellants
Versus
M/s. Logical Jewellers Pvt. Ltd. ...Respondent
Present: For Appellant : Mr. Uddyam Mukherjee, Mr. Rajeev Sharma and Mr. T. Rajat Krishna, Advocates
ORDER
24.05.2019 Learned counsel for the Appellants submits that the
Appellant(s) being a shareholder, before the change of the name of the business,
the Appellants have deposited certain amount through cheque on behalf of the
'Corporate Debtor' and, therefore, the Appellants claimed to be a 'Financial
Creditors'.
Learned counsel for the Appellants referred to the 'Memorandum of
Understanding' dated 14th May, 2008 but we find the 'Memorandum of
Understanding' has reached between the 'M/s. SRS I-Tech Private Limited'
(formerly known as M/s. K.K. Kohli & Brothers Private Limited) and 'M/s. SRS -2-
Aviations Private Limited', pursuant to which certain amounts were made.
However, there is nothing on record to suggest that any amount which has been
deposited by the Appellants with 'M/s. Trustworthy Gems & Jewellers Private
Limited' for a time value of money. Whatever amount has been deposited being
the loan, if taken, does not mean that all the 'creditors' claims to be 'Financial
Creditors' within the meaning of Section 5(7) r/w Section 5(8) of the Insolvency
& Bankruptcy Code, 2016.
In view of the aforesaid reasons, while we condone the delay of 9 days, we
are not inclined to interfere with the impugned order dated 2nd January, 2019,
we dismiss both the appeals.
[Justice S.J. Mukhopadhaya] Chairperson
[ Kanthi Narahari ] Member (Technical) /ns/gc
Company Appeal (AT) (Insolvency) Nos. 565 & 566 of 2019
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