Raj Kumar Sahni & Ors vs M/S Dilwara Leasing And Investment Ltd. ...

[Arising out of the Order dated February 22, 2022, passed by the 'Adjudicating Authority' (National Company Law Tribunal, New Delhi, Bench - IV) in Company Petition No. (IB) - 983(ND)/2020]

IN THE MATTER OF: 1. Raj Kumar Sahni Ex-Director of the Corporate Debtor S/o Late Sh. Wishwa Nath Sahni 11/7B, Pusa Road, New Delhi-110060 ...Appellant No.1

2. Pramila Sahni W/o Mr. Raj Kumar Sahni 11/7B, Pusa Road, New Delhi-110060 ...Appellant No.2

3. Raj Kumar Sahni & Sons HUF Through its Karta Mr. Raj Kumar Sahni 11/7B, Pusa Road, New Delhi-110060 ...Appellant No.3

Versus

1. M/s Dilwara Leasing and Investment Ltd. Registered Office at: 4034, Charkhewalan, Chawari Bazar, Delhi-110006 (INDIA) Email: info@laxmitraders.com ...Respondent No.1

2. Vibrant Buidwell Pvt. Ltd. Trhough Ashish Singh Interim Resolution Professional Registered Office: 22, Siri Fort Road, New Delhi Delhi - 110049, INDIA Email: ashishsinghcs@gmail.com ...Respondent No.2

3. Birendra Kumar Pasari Director of Dilwara Leasing and Investment Limited 22, Siri Fort Road, New Delhi Also At:

A-359, 2nd Floor, Defence Colony New Delhi - 110024 Email: info@laxmitraders.com ...Respondent No.3 Present: For Appellant : Mr. Sidhartha Barua, Tushar Thareja and Praful Jindal, Advocates

For Respondent : Mr. Krishnendu Datta, Sr. Advocate with Mr. Anand M. Mishra, Advocate for R-1 Mr. Rishi Sood, Advocate for R-2 Mr. P. Nagesh, Sr. Advocate with Saurabh Kalia, Harshal Kumar, Advocate for R-3

JUDGMENT

(Hybrid Mode)

[Per: Arun Baroka, Member (Technical)]

This present Appeal is being preferred by the shareholders and one of

the Suspended Director of Vibrant Buildwell Private Limited against the

Impugned Order dated 22.02.2022, passed by the National Company Law

Tribunal, New Delhi Bench - IV in Company Petition No. (IB) -983(ND)/2020.

The Impugned order allows Section 7 proceedings against Corporate Debtor

- Vibrant Buidwell Pvt. Ltd. ('VBL') filed by the Shareholder and investor

which is also the Financial Creditor - M/s Dilwara Leasing and Investment

Ltd. ('DLIL').

2. Recapitulating the relevant facts, NCLT had closed the right of

Corporate Debtor to file reply on 17.12.2020 in Company Petition No. (IB) -

983(ND)/2020. The Appellants herein preferred Appeal against the order

dated 17.12.2020 before NCLAT being Company Appeal No. 58/2021. The

said appeal was dismissed by NCLAT on 01.02.2021. Appellants on

16.12.2020 preferred an application u/s 60(5) of Code read with Rule 11 of

NCLT Rules being CA No. 1/2020 seeking intervention before AA. The

Adjudicating Authority dismissed the intervention application on 02.03.2021

Company Appeal (AT) (Insolvency) No. 410 of 2022 3 of 26 Against the said order of NCLAT, Appellants herein preferred a Civil Appeal

No. 638/2021 before Hon'ble Apex Court wherein Appellants had taken

similar and identical grounds as in the present Appeal. Even, Hon'ble Apex

Court vide its order dated 29.06.2021 dismissed the same. The Appellant

herein had filed a Company Appeal No. 3626/2021 under Section 65 of the

IBC Code before the Adjudicating Authority, which was also dismissed along

with the CP against which the present appeal has been filed.

Submissions of the Appellant

3. The Financial Creditor entered into some terms by which "investment"

was done by the Financial Creditor into the project owned by the Corporate

Debtor. The Terms and Conditions of development of the Project were shared

via email on 14.05.2012 and also cc-ed to the son of Mr. Birendra Kumar

Pasari (Respondent No.3), Mr. Devanshu Pasari and the same was approved

by Mr. Birendra Kumar Pasari.

4. While filing the Section 7 Petition, the Financial Creditor has not

enclosed any financial contract. Respondent - Financial Creditor has

suppressed "term sheet", which contains terms and conditions received vide

email dated 14.05.2012, which is the contract between the parties. It

contained reciprocal rights and obligations and from its perusal it cannot be

termed as financial debt.

5. Birendra Kumar Pasari, who is the Director of the Financial Creditor

and also the Corporate Debtor had filed a police complaint under Section

464/420 read with Section 120B of the of the IBC, 1860 before the Delhi

Company Appeal (AT) (Insolvency) No. 410 of 2022 4 of 26 Police, complaining that the term sheet is a forged document. The said

complaint was inquired by the Delhi Police, Defence Colony, in which it was

confirmed that the said Terms and Conditions of Development of the Project

duly exists and the signature of the Respondent No.3 are not forged as alleged.

On information collected under RTI, it is revealed that the term sheet was

duly exchanged between both the parties on their emails through their

representatives/associates regarding development of the said project. So it is

confirmed that the said terms and conditions of development of the project

duly exists and the signature of the Respondent No.3 - Birendra Kumar

Pasari are not forged and fabricated as alleged.

6. The Corporate Debtor also transferred its operations from earlier place

of 22 Siri Fort Road New Delhi to A-359, Defence Colony, New Delhi. It is

noteworthy that the new corporate office of the Corporate Debtor at A-359,

Defence Colony is a premise owned by Ms. Bela Pasari i.e. wife of Mr. Birender

Kumar Pasari (Respondent No.2) and thus, the complete records details etc.

of the Corporate Debtor were under the control of Mr. Birendra Kumar Pasari.

This was solely on account of cordial relationship and agreed ambit of exercise

and control between Mr. Birendra Kumar Pasari and Appellant herein. The

said access and control over the records of the Corporate Debtor are now

being fraudulently used by the Financial Creditor herein, who is clearly an

alter ego of Mr. Birendra Kumar Pasari.

7. Mr. Birendra Kumar Pasari, as per the said Terms and Conditions of

Development of the Project, started investing through his group companies

Company Appeal (AT) (Insolvency) No. 410 of 2022 5 of 26 namely M/s. Bishwananth Industries Ltd., Financial Creditor and M/s. Bijay

Papers Traders and Investment Ltd. and was appointed as a Director of the

Corporate Debtor w.e.f. 09.07.2012. On 27.08.2012 - an amount of

₹3,00,00,000/- was transferred by the Respondent No.3 from his company

M/s. Bishwananth Industries Ltd and on 26.09.2012, an amount of

₹2,99,00,000/- was transferred by the Financial Creditor. Needless to say

that the Corporate Debtor transferred a huge sum to Financial Creditor,

much prior to the alleged loan and the said transaction was carried out by

Mr. Birendra Kumar Pasari, who was handling the Banking as per the

understanding between the parties. This clearly shows that the investment

was done by Mr. Birendra Kumar Pasari thorough his Companies, whereas

now the Financial Creditor is adding the amount paid by the other group

companies of Mr. Birendra Kumar Pasari into the amount of the Financial

Creditor, whereas the amount invested by Mr. Pasari is less then claimed by

Financial Creditor.

8. Corporate Debtor, at no point of time had agreed to avail loan for

meeting day to day requirements of the Corporate Debtor. The Corporate

Debtor has placed on record a letter dated 24.03.2013 which is a forged and

a fabricated document. The fabrication of the alleged acknowledgment letter

is placed at Page 549-551 of the Appeal. It is evident from the bare reading of

the document that it does not bear the signatures of the Appellant or the

Corporate Debtor. Further, the said letter of the Financial Creditor as

addressed to the Corporate Debtor is signed by none other than Mr. Birendra

Kumar Pasari and not by the other Director of the Corporate Debtor i.e. the

Company Appeal (AT) (Insolvency) No. 410 of 2022 6 of 26 Appellant Mr. Birendra Kumar Pasari is using Financial Creditor and he is

the ultimate master mind of the entire fraud being committed on the

Corporate Debtor. The alleged Loan Document does not have any Board

Resolution and authority in favour of Mr. Birendra Kumar Pasari from the

Corporate Debtor authorising him to enter into such loan transaction and is

thus in contravention of Sec. 166 and Sec. 184 of the Companies Act, 2013,

and Duties of Directors and Disclosure of Interest by Directors. A dispute

between two set of shareholders has been given a colour of Section 7 petition

and the Company/Corporate Debtor is sought to be taken over by

appointment of RP.

9. The Adjudicating Authority got overwhelmed by the fact that the right

to file reply of the Corporate Debtor was closed and such order was confirmed

till the Hon'ble Apex Court. To bring the facts before the Adjudicating

Authority the Appellants filed an I.A. No. 3626/ND/2021 under Section 65 of

the IBC. This application was taken on board but was not appreciated by the

Adjudicating Authority by holding that applicant cannot be allowed to defend

by filing a such application.

10. Respondent No.3 - Birendra Kumar Pasari was dealing on behalf of

Financial Creditor (being Director / Shareholder) and also Corporate Debtor

being Director / Shareholder of both. The signed documents make the

Financial Creditor an investor for bringing ₹16,00,00,000/- into the company

and not a loan. He was acting contrary to the interest of the Corporate Debtor

by making and writing letters. As per the term sheet, Respondent No.3 -

Company Appeal (AT) (Insolvency) No. 410 of 2022 7 of 26 Birendra Kumar Pasari entered into an agreement of taking equity to the

extent of 50% against the money, which is being brought into the company.

Having chosen to take equity into the Corporate Debtor, the same amount

cannot be claimed back as loan. Therefore, there is no debt in the matter.

After the acceptance of shares in terms of the MoU / Terms and Conditions

there is no liability or obligation and Financial Creditor - 'DLIL' cannot be kept

in any of the categories of financial debt under Section 5(8).

11. Financial Creditor has failed to make out any case of disbursal of any

financial debt in consideration for the time value of money. Financial

Creditors own ledger fails to provide basis for calculation of the alleged

interest as the ledger account from 2012 to 2014 reflects no interest, even

though the so called loans have been allegedly disbursed in the year 2012.

12. Corporate Debtor is a quasi-partnership firm wherein the appellants in

the Financial Creditor have equal ownership and voting rights of 50%. The

so-called Financial Creditor of the Corporate Creditor is merely a purchaser

of equity who brought in funds on terms and conditions of the MoU for the

development of the project. The Financial Creditor - 'DLIL' and Respondent

No.3 - Birendra Kumar Pasari are entitled to the profits of the projects with

no repayment obligation by the Corporate Debtor to Financial Creditor - 'DLIL'

and Respondent No. 3 - Birendra Kumar Pasari.

13. Against the land parcel which was vested with the Corporate Debtor the

two parties were entitled to become the shareholders in exchange for meeting

the operational and development cost prior to the sale of the project.

Company Appeal (AT) (Insolvency) No. 410 of 2022 8 of 26

14. Both the Financial Creditor - 'DLIL' and Corporate Debtor had a

common Chartered Accountant, who in breach of the MoU acted on the

dictates of Respondent No.3 - Birendra Kumar Pasari and made certain

entries in the balance sheet of the Corporate Debtor, which do not depict the

true understanding. Therefore, it is forged and fraudulent, done at the

instance of Mr. Birendra Kumar Pasari and cannot be looked into.

15. The letter dated 24.03.2013 is a forged document. It is 'me to me'

document i.e. Made by 'me-to-me' document, i.e. made by Birendra Kumar

Pasari to serve the interest of Birendra Kumar Pasari. It is also noteworthy

that the TDS in the instant case was never deposited by the Corporate Debtor

and was actually paid by the Respondent No.1 - 'DLIL' itself. It demonstrates

fraud being played by Respondent No.1 and Respondent No.3.

16. The Financial Creditor issued a Demand Notice dated 16.03.2020 to

the Financial Creditor recalling the alleged loan. On a bare perusal of the said

Notice, it is evident that the Financial Creditor did not mention/ refer about

the false loan documents in the said Notice, which according to it were created

in 2012. This clearly depicts that the false documents were created after

sending the Demand Notice to the Financial Creditor with ulterior motives in

order to mislead this Tribunal. The Financial Creditor has stated that the

alleged loan was on need basis and has been given over a period of seven

years from 2012-2019. Despite such a long period, the Financial Creditor has

failed to annex a single request letter/communication from the Corporate

Debtor in which the Corporate Debtor is requesting for disbursal of any

Company Appeal (AT) (Insolvency) No. 410 of 2022 9 of 26 alleged loan amount addressed to the Financial Creditor. It is pertinent to

mention here that Mr. Birendra Kumar Pasari, who was in total control of the

Corporate Debtor and the Financial Creditor was aware about the daily

financial requirements of the Corporate Debtor and he used to transfer money

as per the Terms and Conditions of Development of the Project out of the

agreed investment amount of ₹15 Crores upto ₹ 20 Crores.

17. Adjudicating Authority has placed undue reliance on the closure of the

right of the Corporate Debtor to file its reply to the Section 7 petition and

rejected Section 65 application without considering the said application on

merits. Since only two Directors of the Corporate Debtor remained and

Corporate Debtor was not even allowed to defend the Section 7 proceedings

initiated malafidely by Respondent No. 1, the ownership and control was with

Mr. Birendra Kumar Pasari, who is also 50% shareholder. In view of the terms

and conditions - with the development of the project, the Corporate Debtors

right to file a reply was closed vide order dated 17.12.2020. Corporate Debtor

appealed before this Tribunal against the right to file a reply by the Corporate

Debtor, which was dismissed by this Tribunal on 01.02.2021 and by Hon'ble

Apex Court vide order dated 29.06.2021. In order to bring the aforesaid facts

to light, the appellant had filed an application bearing I.A. No. 3626/2021

under Section 65 of the IBC seeking rejection of the Application under Section

7 against the Corporate Debtor - 'VBL'.

18. Section 65 application was required to be heard and adjudicated on

merit which was not in this case. From a bare perusal of the Ledger Account

Company Appeal (AT) (Insolvency) No. 410 of 2022 10 of 26 annexed by the Financial Creditor, it can be seen that the Financial Creditor

has alleged to have transferred odd figures like ₹ 309/- on 26.04.2013, ₹300/-

on 06.05.2013, ₹ 723/- on 05.04.2014 and ₹ 1035/- on 06.05.2014, which is

not a usual practice undertaken by a NBFC like the Financial Creditor, which

clearly shows that the amount transferred was not a loan and was in

furtherance of the Terms and Conditions of Development of the Project.

19. The Financial Creditor has stated that the Corporate Debtor never paid

the interest and only deposited the TDS. It is pertinent to mention here that

no TDS was paid till the financial year 2015-2016, although the first amount

was transferred on 27.08.2012. It is pertinent to mention here that even the

TDS amount was deposited by the Financial Creditor itself which is evident

from as an amount of ₹ 5,54,122/- has been deposited towards the TDS

allegedly by the Corporate Debtor, whereas as per the account's statements

of the Financial Creditor the amount of ₹ 5,54,122/- has been deposited to

the Indian Bank TDS account by the Financial Creditor, which clearly depicts

that even the TDS was deposited by the Financial Creditor. It is evident from

where an amount of ₹ 5,69,442/- dated 30.04.2016 was transferred to the

Corporate Debtor whereas as per the account's statements of the Financial

Creditor no such amount is mentioned. This clearly shows that the said

amount relates to the TDS paid by the Financial Creditor itself.

20. Both the Financial Creditor and Mr. Birendra Kumar Pasari in their

submissions have mentioned that Corporate Debtor and its Director Mr. Raj

Kumar Sahni have delayed the sale of the project. On the contrary on

Company Appeal (AT) (Insolvency) No. 410 of 2022 11 of 26 13.09.2018, which is much before the Demand Notice dated 16.03.2020, Mr.

Raj Kumar Sahni who was always working in the interest of company wrote

an e-mail addressed to Mr. Birendra Kumar Pasari, informing about the

favourable market conditions and calling upon him about right time to sell

the project and have better profits, whereas Mr. Birendra Kumar Pasari with

ulterior motives never initiated the process of sale of the said project of the

Corporate Debtor.

21. From the written submissions as filed by Mr. Birendra Kumar Pasari,

it is evident that his primary objective is initiation of CIRP of the Corporate

Debtor and not to provide a tenable defence on behalf of the Corporate Debtor

against the vexatious petition file by the Financial Creditor. This is further

strengthened by the fact that Mr. Birendra Kumar Pasari chose not to file any

reply to the petition u/s 65 filed by Mr Raj Kumar Sahni. (Order dated

05.10.2021 passed by NCLT).

22. The instant case is clearly not a case falling within the ambit of Section

5(8) of the IBC and thus no petition under Section 7 of the IBC can be filed

against the Corporate Debtor herein.

23. The Financial Creditor herein has failed to make out any case of

disbursal of any financial debt. It is clear that even as per the Financial

Creditor, there is no date of repayment of the alleged loan. The calculation

sheet as provided by the Financial Creditor's has no basis and there is no

clarity as regards the interest paid, interest charged, adjustment made etc.

by the Financial Creditor. It is noteworthy that the Financial Creditor's, own

Company Appeal (AT) (Insolvency) No. 410 of 2022 12 of 26 ledger fails to provide for any basis of calculation of the alleged interest as

claimed by the Financial Creditor. The ledger account for the year 2012 to

2014 reflects no interest, even though the loans have been allegedly disbursed

to the Corporate Debtor in the year 2012.

24. The calculation sheet of the Financial Creditor reflects inflow and

outflow of small amounts indicating the nature of relationship between the

Corporate Debtor and the Financial Creditor. The mere reading of the entries

establishes beyond doubt the fact that there was no consideration of the time

value and money and the transaction was not in the nature having

commercial effect of borrowing and thus clearly not a financial debt. The

present case is not the case of any default by the Corporate Debtor towards

repayment of dues of Financial Creditor herein. The present case is a case

wherein as per common practice in the Real Estate sectors, investors fund

projects and the realization with profits against the investments only takes

place at the stage wherein the project is sold. Thus, the alleged claim of the

Sh. Birendra Kumar Pasari through the Financial Creditor herein is

premature as the milestone for seeking return of investment with profit has

not been reached as yet. Thus, there is no default and in absence of default

proceedings under Section 7 of IBC even otherwise not legally tenable.

25. The above-mentioned facts and circumstances clearly demonstrate the

fraud as being played on Sh. Birendra Kumar Pasari thorough the Financial

Creditor herein in their attempt to misuse the provisions of IBC to seek unjust

enrichment.

Company Appeal (AT) (Insolvency) No. 410 of 2022 13 of 26 Submissions of the Respondent No.1/ Financial creditor

26. The petition u/s 7 of IBC, 2016 had been filed by Respondent No.1

against Corporate Debtor for default in payment of its financial debts, which

fell due on 16.03.2020 when Corporate Debtor despite demand failed to repay

the loan amount along with interest accrued therein.

27. During F.Y. 2012-2013 Corporate Debtor approached Respondent No.1

and sought financial needs from time to time as per its requirement to develop

its real-estate project at Bahadurgarh, Haryana. The Respondent No.1/

Financial Creditor agreed to provide loan which was repayable on demand -

letter cum agreement dated 24.03.2013 at Pg. Nos. 461, 462 is acknowledged

by Corporate Debtor. Accordingly, Corporate Debtor over a period of time had

availed principal loan amounting to ₹ 14,55,36,849/- from Respondent No.1

during financial year 2012-2013 till 2018-2019. The Corporate Debtor also

requested Respondent No.1 to provide margin money as and when required,

to the bank, with a view to enable the Corporate Debtor to furnish a bank

guarantee in favour of DTCP in order to renew license of Corporate Debtor

whereupon Respondent No.1 vide its letter dated 24.09.2012, agreed to

provide the same to the bank for the purpose of issuance of BG in favour of

DTCP. Accordingly, Respondent No.1 provided margin money [₹2,44,47,000/-

and ₹4,25,00,000/- on 27.09.2012 & 21.05.2013 respectively] to enable

Corporate Debtor to furnish the BG in favour of DTCP, Haryana to get the

license to develop the colony. The Corporate Debtor in the year 2016 applied

for migration of its license from group housing colony to affordable plotted

colony under Deen Dayal Jan Awas Yojna [in short 'DDJAY'], wherein

Company Appeal (AT) (Insolvency) No. 410 of 2022 14 of 26 Corporate Debtor is allowed to sell plots after demarcation. Despite receipt of

License. i.e. License No. 41/2018. under DDJAY on 16.06.2018, the

Corporate Debtor deliberately not sold its Plots/Project. The validity of licence

expires on 15.06.2023.

28. Respondent No.1 had earlier filed the Insolvency Petition being Co. Pet.

(IBC) No. 983/ND/2020 u/s 7 of the Code before AA. The AA issued notice of

the said petition to Corporate Debtor on 19.10.2020 and due to non-filing of

reply within stipulated time, Tribunal closed the right of Corporate Debtor to

file reply on 17.12.2020. The Appellants herein preferred Appeal against the

order dated 17.12.2020 before NCLAT being Company Appeal No. 58/2021.

The said appeal was dismissed by NCLAT on 01.02.2021. Appellants [herein]

on 16.12.2020 preferred an application u/s 60(5) of Code read with Rule 11

of NCLT Rules being CA No. 1/2020 seeking intervention before Ld. AA. The

Adjudicating Authority was pleased to dismiss the intervention application on

02.03.2021 [the said fact is being concealed by Appellants from this Tribunal].

Against the said order of NCLAT, Appellants herein preferred a Civil Appeal

No. 638/2021 before Hon'ble Apex Court. Apart from taking similar and

identical grounds before Hon'ble Apex Court the Appellants, had also taken

the grounds as mentioned herein below:

o Hon'ble National Company Law Appellate Tribunal failed to appreciate that the transaction between the Appellant and the Respondent was not a financial debt as per Sec. 5(8) of the IBC, 2016 as there was no consideration for the time value of money.

Company Appeal (AT) (Insolvency) No. 410 of 2022 15 of 26 o Hon'ble National Company Law Appellate Tribunal failed to appreciate that the purpose of the transaction between the Appellant and the Respondent was not loan but investment.

The petition u/s 7 of IBC, 2016 had been filed by Respondent No.1 against

Corporate Debtor for default in payment of its financial debts, which fell due

on 16.03.2020 when Corporate Debtor despite demand failed to repay the

loan amount along with interest accrued therein. Even Hon'ble Apex Court

after considering the grounds taken before it [including the grounds

mentioned herein above] vide its order dated 29.06.2021 dismissed the said

Appeal. The Appellants, to abuse the process of law, again filed Application

u/s 65 of Code being CA No. 3626/2021 before Ld. AA on same grounds

which were already taken earlier in their Application/Appeals and was

dismissed by Learned Adjudicating Authority/Tribunal/Supreme Court.

Appellants were barred from raising same objections by way of different

application when the same were already been dealt with.

29. Respondent No.1 further submits that Audited Financials Statement of

the Corporate Debtor duly signed by all its directors including Appellants for

the financial year commencing from 2012-2013 up till 2016-2017 clearly

reflects the loan amount given by R-1 into the account of Corporate Debtor.

The Audited Financial Statement of Corporate Debtor clearly indicates the

Finance Cost in notes No. 9 of its Audited Financial Statements which was

also confirmed in notes to accounts of AS-18 Statement of Corporate Debtor.

The audited financial statement of Corporate Debtor reflects interest amount

on loan given by respondent No.1 / Financial Creditor in their audited

Company Appeal (AT) (Insolvency) No. 410 of 2022 16 of 26 balance sheet. The Audited Financial Statement of Corporate Debtor duly

signed by all its director commencing from 2012-13 up till 2016-17 clearly

indicates the loan amount disbursed by Respondent No.1 as well as interest

accrued therein along with the Bank Guarantee provided by Financial

Creditor on behalf of Corporate Debtor. The audited Balance Sheets of

Corporate Debtor duly signed by all its directors including Appellant No. 1

clearly indicates the interest component [Finance Cost] on the loan advanced

by Financial Creditor. Respondent places its reliance in the Case of Asset

Reconstruction Company (India) Ltd. v. Bishal Jaiswal & Anr. (Civil

Appeal No. 323 of 2021).

30. The Appellants in its earlier appeal, i.e Company Appeal No. 58/2021,

[Appeal against the closure of right to file reply to the Insolvency Petition] filed

before Hon'ble NCLAT had admitted that an amount disbursed by Respondent

No.1 shall be treated as 'loan' and the same shall be paid out of the sale

proceeds of the project. The Appellants also in its pleadings filed before Apex

Court admits that the amount disbursed by Respondent No.1 to Corporate

Debtor shall be treated as 'loan'.

31. As per Section 5(8) of the Code, financial debt means a debt along with

interest, if any, which is disbursed against the consideration for the time

value of money. In the present case, the loan was disbursed by Financial

Creditor against the consideration for the time value of money and

additionally, interest component is also there. The letters cum agreement

dated 24.09.2012 and 24.03.2013, which constitute the contract, under

Company Appeal (AT) (Insolvency) No. 410 of 2022 17 of 26 which loan was advanced. In any event, the loan, its receipt and the

consideration for time value is reflected and admitted in the balance sheets

and in 26AS form of the Corporate Debtor. It is an admitted position that

Respondent No.1 has advanced loan to Corporate Debtor and the same is

repayable on demand. It is an admitted position of Appellants herein before

NCLAT in Company Appeal (AT) No. 58/2021 that amount disbursed by

Respondent No.1 shall be treated as 'loan'. It is also admitted by Appellants

herein before the Apex Court that amount disbursed by Respondent No.1

shall be treated as 'loan'. It is further submitted that there is time value of

money. Also the outstanding amounts owed by Corporate Debtor to

Respondent No.1 are covered under the definition of 'Financial Debt' under

Section 5(7) of the Code, and the Financial Creditor is covered under the

definition of 'Financial Creditor' under Section 5(8) of the Code.

32. The Corporate Debtor had even deposited the tax deducted at source at

the rate applicable in respect of the interest amount for the relevant financial

years up till the financial year 2017-18 and the same is reflected in 26AS.

That even the audited Balance Sheets of Corporate Debtor duly signed by all

its directors including Appellants herein also reflect the TDS payable on the

interest amount.

33. It is also contended that despite receipt of License under DDJAY

[License No. 41/2018] on 16.06.2018 for affordable Plotted Colony and after

getting all necessary approvals including sanction plans, Corporate Debtor

wilfully not sold its Plots to evade the payment towards its debts.

Company Appeal (AT) (Insolvency) No. 410 of 2022 18 of 26

34. Respondent No.1 contends that the reliance placed by Appellants on

the alleged Terms & Conditions is unwarranted as the same is self-serving,

false and fabricated document. The same is based on concocted stories which

never existed in the eyes of law.

35. Parties are not allowed to bring any new documents in an Appeal.

Appellants are bound by the pleadings earlier filed by them before Ld.

AA/NCLAT/SC. Both the documents at Page No. 94-96 of Appeal & Page No.

12-16 of IA No. 1102/2022 are materially different from each other.

Respondent No.1 was not a party to the said document. The grounds taken

in present Appeal is nothing but a carbon copy of earlier Appeals which were

dismissed. At every stage the Appellants had tried to deny Respondent No.1

its rightful dues.

36. The Appellant herein Mr. Raj Kumar Sahni, before the Adjudicating

Authority while raising objection to the Resolution Plan had taken a

categorical stand that Corporate Debtor defaulted in making the repayment

of loan to the Financial Creditor / Respondent No. 1 herein, as a result of

which Corporate Debtor committed default on 16.03.2020 and the account of

Corporate Debtor was declared as NPA on 14.06.2020.

37. The Appellant in present Appeal has failed to point out any instance of

fraudulent or malicious stance of initiating the Insolvency Proceedings by the

Financial Creditor. In fact, the material placed, i.e. disbursement details,

bank account statement indicating disbursement, ledger statement, audited

Company Appeal (AT) (Insolvency) No. 410 of 2022 19 of 26 balance sheet since the financial year 2012-2013 to 2016-2017 and 26AS, on

record confirms that Financial Creditor had provided Loan to the Corporate

Debtor and the Corporate Debtor acknowledged the same as financial debt

and committed default in repayment of the financial debt.

38. Thus, the Financial Creditor /Respondent No.1 is well within its right

of the financial creditor to recall its financial debt from the Corporate Debtor.

39. Therefore, in the light of the facts and circumstances no grounds has

been made out by the Appellants to set aside the order dated 22.02.2022

passed by Learned Adjudicating Authority. Thus, it prays to dismiss the

present Appeal filed by Appellants.

Appraisal

40. In this case Section 7 petition under the Code was filed by the

Respondent no1 / Financial Creditor - 'DLIL' against the Corporate Debtor -

'VBL' on 19.10.2020 before the Adjudicating Authority. The Corporate Debtor

did not file any reply. The right to file the reply was, therefore, closed by the

Adjudicating Authority on 17.12.2020.

41. Against this order of the Adjudicating Authority, the Appellant namely

Mr. Raj Kumar Sahni had filed an Appeal before this Appellate Tribunal vide

Company Appeal (Ins) No. 58/2021, which was dismissed on 01.02.2021. The

order of this Appellate Tribunal was further challenged by Mr. Raj Kumar

Sahni before Hon'ble Apex Court in Civil Appeal No. 638/2021, which was

also dismissed by Hon'ble Apex Court on 29.06.2021. It is to be noted that

the Appellant had also filed Intervention Application before the Adjudicating

Company Appeal (AT) (Insolvency) No. 410 of 2022 20 of 26 Authority - Company Appeal No. 1 of 2020 under Section 60(5) read with Rule

11 of NCLT Rules, 2016, which was also dismissed by the Adjudicating

Authority on 02.03.2021.

42. The Appellant herein had filed a Company Appeal No. 3626/2021

under Section 65 of the IBC Code before the Adjudicating Authority. The

Adjudicating Authority, after going into the details of the various appeals of

the Appellant, found no merit in the I.A. No.3626/ND/2021. In the impugned

order the Adjudicating Authority has noted various appeals filed by the

Appellant as follows:

"....

8. Heard. The records have been thoroughly perused. Apparently, the right to file reply of the respondent corporate debtor was closed by this Tribunal vide order dated 17.12.2020. The said order was challenged by the applicants before Hon'ble NCLAT and Hon'ble Supreme Court, but the order dated 17.12.2020 was upheld in both the Appeals.

9. The applicants also filed CA No. 1 of 2020 for impleadment/intervention with similar grounds, but the same application was also dismissed vide order dated 02.03.2021. The applicants have tried twice to raise similar grounds before this Tribunal. Reasonable opportunity was given to corporate debtor for contesting the main IB petition but failed to do so. Now, the present application has been filed by the applicants raising similar objections against the main IB petition and claim of the Financial Creditor. The applicants even raised similar objections before Hon'ble NCLAT and Hon'ble Supreme Court, but both the Hon'ble Courts dismissed the grounds of the applicants.

Thus, the applicants cannot be allowed to raise same objections by way of different applications, when the same has already been dealt. The respondent herein by virtue of the applications wasn't to defence the case, wherein the right to defend has already stand closed. Hence, the applicant cannot be permitted to do (defend) indirectly what he cannot do directly by virtue of filing such like applications. Moreover, merely that one of members of company is partner in the partnership (one of group) and entered into collaboration with the respondent does not establish that there was collusion. Further, there is contention that meagre accounts are added in the balance sheet, but that does not prove fraud, because of the reason that when the project is developed and then whatever amount is spend whether is meagre one, the same is required to be accounted for. On the basis of the same, the interference could not drawn that entries

Company Appeal (AT) (Insolvency) No. 410 of 2022 21 of 26 were absolutely wrongly made in Balance Sheet and those amounts were actually not spend. Hence there is nothing on the record to establish that there was fraud and malicious initiation of section 9 on behalf of the petitioner hearing. Secondly, the applicants in their application have themselves submitted that the Financial Creditor was earlier invested in the project which was then converted into different project under Deen Dayal Jan Awas Yojna, therefore the financial creditor has reasonable cause to recall its loan given to the applicant for a different project. Further, the corporate debtor even failed to get renew the license for completion of the earlier project.

10. In view of the above discussion, we find no merits in the application of the applicants, resultantly, IA 3626/ND/2021 is dismissed with no order as to costs."

[emphasis supplied]

43. Thereafter, the Adjudicating Authority has come to a conclusion that

there is a clear case of debt and default and admitted the Corporate Debtor

into insolvency, which is noted as follows:

"....

11. In respect of the Main IB petition filed under Section 7 of the Code, the Financial Creditor has placed Balance Sheets of the Corporate Debtor reflecting debt given by the Financial Creditor acknowledged. The Financial Statements for the F.Y. ending 2012- 2013 to 2016-2017 was duly signed by the director of Corporate Debtor namely, Mr. Raj Kumar Sahani i.e. the other director. It is reiterated that the corporate debtor failed to raise any objection within stipulated time provided by this Tribunal.

12. The Financial Creditor has invested its money for a project and the corporate debtor has failed to complete the project and infact changed the entire project into another type of project. Therefore, it is well within the rights of the financial creditor to recall its financial debt as the project is not the same. In view of the documents placed on record, the financial creditor proved that financial debt was given to the corporate debtor and the corporate debtor has defaulted in repayment of said financial debt.

13. Needless to say, that an application under Section 7 of the Code is acceptable so long as the debt is proved to be due and there has been occurrence or existence of default. What is material is that the default is for at least Rs.1 Lakh. In view of Section 4 of the Code, the moment default is of Rupees one lakh or more, the application to trigger Corporate Insolvency Resolution Process under the Code is maintainable. The corporate debtor has failed to show that there is no debt or default in existence so as to avoid the provisions of the Code. The applicant has also placed copies of Form- 26AS showing deposit of TDS on interest over financial debt deposited by the corporate debtor.

Company Appeal (AT) (Insolvency) No. 410 of 2022 22 of 26

14. In the facts it is seen that the applicant clearly comes within the definition of Financial Creditor. The material placed on record further confirms that applicant financial creditor had provided financial facility to the respondent corporate debtor and the respondent acknowledged the same debt in its Balance Sheets and committed default in repayment of the outstanding financial debt. On a bare perusal of Form - I filed under Section 7 of the Code read with Rule 4 of the Rules shows that the form is complete and there is no infirmity in the same.

15. We are satisfied that the present application is complete in all respect and the applicant financial creditor is entitled to claim its outstanding financial debt from the corporate debtor and that there has been default in payment of the financial debt.

16. As a sequel to the above discussion and in terms of Section 7 (5)

(a) of the Code, the present application is here admitted."

[emphasis supplied]

44. The Adjudicating Authority, while passing the admission order dated

22.02.2022 as above against the Corporate Debtor, had also dismissed IA No.

3626 of 2021 filed by Appellant herein u/s 65 of the Code seeking rejection

of the Insolvency Petition being CP (IB) No. 983 of 2020 filed by Respondent

No.1.

45. While this matter was being heard by this Appellant Bench, for the

same Corporate Debtor, the coordinate bench of this Appellate Tribunal was

hearing Company Appeal (AT) (Insolvency) Nos. 253-254 of 2024, 256 & 257

of 2024 and 242 & 243 of 2024, which involved the appeals against the orders

passed by the Adjudicating Authority in CP No. 983 of 2023, in which the

Adjudicating Authority had passed orders for the liquidation of the Corporate

Debtor and had rejected the Resolution plan as proposed by the CoC/RP.

These Appeals were filed by Resolution Professional ("RP") of M/s Vibrant

Buildwell Pvt. Ltd.; the Committee of Creditors ("CoC") of Vibrant Buildwell

Company Appeal (AT) (Insolvency) Nos. 253-254, 256-257 & 442-443 of 2024

Company Appeal (AT) (Insolvency) No. 410 of 2022 23 of 26 Pvt. Ltd. and Successful Resolution Applicant ("SRA") of the Corporate Debtor

("CD") against the same order dated 24.01.2024 in I.A. No.4173 of 2023 filed

by Raj Kumar Sahni, Suspended Director and Shareholder of the Corporate

Debtor and IA No.5458 of 2022 filed by RP for approval of Resolution Plan.

The Adjudicating Authority, had allowed I.A. No.4173 of 2023 accepting the

objection raised by Raj Kumar Sahni, Suspended Director and shareholder of

the Corporate Debtor and consequently rejected IA No.5458 of 2022 filed by

the RP for approval of Resolution Plan. The coordinate Appellate Bench had

heard on the impugned order of the Adjudicating Authority for liquidation and

it was set aside and resolution plan as proposed/approved by the RP and CoC

was approved. The relevant extract of this order are as follows:

"....

31. In result, all the Appeal(s) are allowed. The order dated 24.01.2024 impugned in these Appeal(s) are set aside. IA No.4173 of 2023 is dismissed and IA No.5458 of 2022 is allowed, approving the Resolution Plan. Consequential order with respect to approval of Resolution Plan may be passed by the Adjudicating Authority within a period of 60 days from the date of copy of the order is produced before the Adjudicating Authority. Pending IAs, if any, are also disposed of. Parties shall bear their own costs."

[emphasis supplied]

46. From the material on record, it is evident that no party raised the issue

of the pendency of this Section 7 Appeal in the other case before the

coordinate Bench.

47. In the above conspectus, when the matter was agitated before

Adjudicating Authority, and thereafter in appeal before this Appellate

Tribunal and thereafter before Hon'ble Supreme Court and also when the

Company Appeal (AT) (Insolvency) No. 410 of 2022 24 of 26 resolution plan has been approved by the coordinate Bench of this Tribunal,

this appeal under Section 61 against the impugned order under Section 7

before this Appellate Tribunal becomes infructuous. We can dismiss the

Appeal straightaway, but to put to rest all ongoing litigations, we will briefly

look into the merits of the case also.

48. The petition u/s 7 of IBC, 2016 had been filed by Respondent No.1

against Corporate Debtor for default in payment of its financial debts, which

fell due on 16.03.2020, when Corporate Debtor despite demand, failed to

repay the loan amount along with interest accrued therein. Audited Financial

Statement of the Corporate Debtor, duly signed by all its directors including

Appellants for the financial year commencing from 2012-2013 up till 2016-

2017 are on record, which clearly reflects the loan amount given by

Respondent No.1 into the account of Corporate Debtor. In the present case,

Financial Creditor had placed material i.e disbursement details, bank

account statement indicating disbursement, ledger statement, audited

balance sheet of the Corporate Debtor since the Financial Year 2012-2013 to

2016-2017 and 26AS, which confirms that Financial Creditor had provided

Loan to the Corporate Debtor and the Corporate Debtor acknowledged the

same financial debt and committed default in repayment of the financial debt.

49. Further Financial Creditor / Respondent No.1 gets support from the

case of Asset Reconstruction Company (India) Ltd. v. Bishal Jaiswal &

Anr (Civil Appeal No. 323 of 2021), wherein the Hon'ble Apex Court has

held that entries in balance sheets will amount to acknowledgement of debt

Company Appeal (AT) (Insolvency) No. 410 of 2022 25 of 26 under Section 18 of the Limitation Act, 1963 for the purposes of filing of an

Application under Section 7 of the Insolvency and Bankruptcy Code, 2016.

50. Thus, we find that even on merits, that the debt and default has been

established, therefore, there is no merit in the Appeal.

Order

51. Accordingly, we do not find any infirmity in the orders of the Adjudicating

Authority in the CP(I.B.) -983(ND)/2020 and the Appeal is held to be infructuous

and also lacks in merit and is therefore dismissed.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Arun Baroka] Member (Technical) New Delhi.

January 06, 2025.

pawan

Company Appeal (AT) (Insolvency) No. 410 of 2022 26 of 26