Hiren Meghji Bharani vs Shankheshwar Properties Pvt. Ltd. & Ors.
Company Appeal (AT) (Insolvency) No.446 of 2023
Facts:
1.Application under Section 7 of the IBC, 2016 was filed by Rupa Infotech & Infrastructure Pvt. Ltd. (Financial Creditor (hereinafter referred as “FC”)/ (Respondent No.2) under “IBC” before the Adjudicating Authority seeking CIRP against Shankeshwar Properties Pvt. Ltd. FC had provided inter corporate loan of Rs. 7 crores @ 12% per annum interest for which a document with the title of “confirmation and undertaking” @ interest of 1% per month is on record. The Corporate Debtor had undertaken to make repayment of Rs.7 crores on demand after a period of 90 days. The Corporate Debtor made payment of interest until 31.03.2016 and the last payment was made on 04.07.2017 for an amount of Rs.1 crore.
2.Application was admitted by the NCLT vide order dated 03.02.2023.
Issue: Whether the appeal is liable to be admitted?
Arguments:
Appellant:
1.Counsel submitted that Adjudicating Authority has incorrectly relied upon unstamped document with the title of “confirmation and undertaking” in deciding for CIRP.
2.It was further submitted that it is claimed that confirmation and undertaking dated 24.09.2015, being an inter corporate deposit agreement, is mandatorily required to be stamped. It is claimed by the Appellant that such confirmation and undertaking cannot be relied upon as evidence under Section 34 and Article 5(h)(A)(iv) of the Maharashtra Stamp Act. And since this document could not have been relied upon by Adjudicating authority.
Decision: NCLAT dismissed the ppeal
Rationale:
1.NCLAT noted that in the present case Appellant himself has admitted in affidavit in Reply dated 17.01.2022, that Financial Creditor has invested a sum of Rs.7,00,00,000/- (Rupees seven crore only) in the project developed by the Corporate Debtor. And the Corporate Debtor has paid interest on the debt and deducted tax at source also. The Corporate Debtor has himself filed the Audited Financial Statement for the year ended 31.03.2020 vide Additional Affidavit dated 16.11.2022 and the Financial Creditor in that statement has been shown as unsecured loan with the outstanding sum of Rs.3,00,00,000/.
2.It held that the admission of liability in the balance sheet of Respondent No.1, the part payments made by Respondent No.1 to Financial Creditor from time to time and NeSL sufficiently demonstrates the admission of liability by Respondent No.1, even without relying upon “confirmation and undertaking” dated 24.09.2015.
3.NCLAT held that The plea of the Appellant, to claim that the unstamped agreement/instrument in question cannot be admitted into evidence under the provisions of the Maharashtra Stamp Act, as a defense, cannot render the corporate insolvency resolution process (“CIRP”) nonmaintainable, when there exists other material on record to prove existence of default in payment of debt. On this count, we therefore, cannot find any fault in the orders of the Adjudicating Authority.
Order:
