Gokul Sai Udyog LLP vs Katyayni Contractors Private Limited
Company Petition (IB) No. 350/KB/2022 And I.A. (IB) No. 970/KB/2024
Facts:
1. Applicant claims to be a financial creditor relying on a resolution passed in the partner’s meeting of the LLP held on 11.5.2017 wherein, it has been resolved that the applicant will provide loans and advances to the corporate debtor to the tune of Rs. 6 crores with interest at the rate 12% per annum
2. The corporate debtor has paid an amount of Rs. 2 crores back by way of RTGS to the financial creditor and the balance remains unpaid claims the Applicant. On 14.04.2022, the financial creditor issued a legal notice to the corporate debtor and on 05.05.2022, the same was replied by the corporate debtor. The financial creditor issued another legal notice in Form-3 on 18.06.2022 and the same was replied by the corporate debtor on 01.08.2022 denying the due and default and hence this application has been filed in December 2022 under Section 7 of IBC.
Issue: Whether the application can be admitted?
Arguments:
Applicant:
1. Counsel for the applicant relying on the bank statements evidencing disbursement of such amount to the corporate debtor and the resolution passed by the financial creditor on 11-5-2017 authorising disbursement of loan submits that the said disbursement is towards loan and it was agreed and understood that the corporate debtor would be liable to re-pay the said loan together with interest at the rate of 12% per annum within six months.
2. It was submitted that the financial creditor claims that they were compelled to issue a legal notice dated 14.04.2022, to the corporate debtor demanding repayment of the outstanding principal of Rs. 4 crores along with 12% interest thereon till the payment of the amount
3. The corporate debtor contended that the Rs. 6 crores amount was received towards supply of construction material such as sand, beach stone etc. As per the reply filed by the corporate debtor, he has already supplied Rs. 4 crores worth of sand and beach stone and the balance Rs. 2 crores were repaid on 23-10-2017. To this, the Ld. Counsel for the Applicant submits that this is a factually baseless counter without producing any GST invoices for the supply of materials claimed to have been made.
Respondent:
1. Counsel for the respondent submits that there is no agreement between the parties on any loan. The so-called resolution passed by the financial creditor on 11.05.2017, is an internal document created to extract money from the corporate debtor. Counsel further submits that the alleged loan is not actually a loan but an advance for the supply of goods. Therefore, the said advance will not fall under the ambit of financial debt.
Decision: NCLT dismissed the application.
Rationale:
1. NCLT noted that a total sum of Rs. 6 Cr has been paid to the Respondent. On 23.10.2017, the bank statements evidence that a sum of Rs. 2 crores have been returned by the respondent herein to the applicant.
2. It noted that since the purported resolution document dated 11.05.2017, contains a GSTIN number when GST was not in force, we cannot place reliance on this document. This is because the GST Acts came into effect only from 01.07.2017. Even otherwise, this being an internal document and not an MoU or agreement executed between the parties, no inference can be made favour of the Applicant.
3. It held that in the absence of any formal written agreement or any other evidence, we are unable to decide whether the debt owed by the Corporate Debtor is an operational debt or a financial debt particularly when the books of the corporate debtor deals with the debt in question as “other payable” and not as “borrowings.
Order Copy:
