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Priyanka Kumari Jain v/s M/s. Spencer's Travel Services Limited


Company & Directors' Information:- TRAVEL CORPORATION (INDIA) LIMITED [Amalgamated] CIN = U63040MH1961PLC012067

Company & Directors' Information:- I SERVICES INDIA PRIVATE LIMITED [Active] CIN = U72900DL2003PTC118851

Company & Directors' Information:- S T SERVICES LTD [Active] CIN = L74140WB1989PLC047210

Company & Directors' Information:- M G F SERVICES LIMITED [Amalgamated] CIN = U65910DL1987PLC029599

Company & Directors' Information:- PRIYANKA (INDIA) PRIVATE LIMITED [Active] CIN = U74899DL1983PTC015359

Company & Directors' Information:- R S SERVICES PRIVATE LIMITED [Active] CIN = U65100DL1989PTC038061

Company & Directors' Information:- R S SERVICES PRIVATE LIMITED [Active] CIN = U74900DL1989PTC038061

Company & Directors' Information:- S J SERVICES PRIVATE LIMITED [Active] CIN = U74140DL1988PTC034427

Company & Directors' Information:- E M SERVICES (INDIA) PRIVATE LIMITED [Active] CIN = U93090MH2001PTC131924

Company & Directors' Information:- L M J SERVICES LTD [Active] CIN = L51226WB1983PLC035807

Company & Directors' Information:- L M J SERVICES LTD [Active] CIN = L93000WB1983PLC035807

Company & Directors' Information:- G K SERVICES PRIVATE LIMITED [Active] CIN = U65990MH1994PTC078529

Company & Directors' Information:- A K SERVICES PRIVATE LIMITED [Active] CIN = U74899MH1986PTC268851

Company & Directors' Information:- B V SERVICES PVT LTD [Active] CIN = U74140WB1991PTC050946

Company & Directors' Information:- I S A SERVICES PRIVATE LIMITED [Active] CIN = U74140JH1995PTC006387

Company & Directors' Information:- E I C SERVICES PRIVATE LIMITED [Strike Off] CIN = U74899DL1985PTC022426

Company & Directors' Information:- B A JAIN & CO. PRIVATE LIMITED [Active] CIN = U21014WB1997PTC083658

Company & Directors' Information:- A C SERVICES PRIVATE LIMITED [Active] CIN = U74899DL1995PTC070774

Company & Directors' Information:- H S SERVICES PRIVATE LIMITED [Active] CIN = U74900KA2014PTC074321

Company & Directors' Information:- G V INDIA SERVICES PRIVATE LIMITED [Active] CIN = U74900DL2010PTC212026

Company & Directors' Information:- A TO Z SERVICES PRIVATE LIMITED [Active] CIN = U74999MH2007PTC168484

Company & Directors' Information:- N S JAIN AND COMPANY PRIVATE LIMITED [Active] CIN = U31909MH1997PTC112719

Company & Directors' Information:- O P T SERVICES INDIA PRIVATE LIMITED [Active] CIN = U63013DL1996PTC083397

Company & Directors' Information:- P P SERVICES PVT LTD [Active] CIN = U70101WB1991PTC051423

Company & Directors' Information:- A P T SERVICES PRIVATE LIMITED [Amalgamated] CIN = U29219TG1999PTC031903

Company & Directors' Information:- S S SERVICES PVT LTD [Active] CIN = U51109AS1993PTC003956

Company & Directors' Information:- G & G SERVICES PRIVATE LIMITED [Active] CIN = U45201DL2012PTC230905

Company & Directors' Information:- V K JAIN AND CO PRIVATE LIMITED [Active] CIN = U74899DL1993PTC055478

Company & Directors' Information:- H. V. JAIN & CO PRIVATE LIMITED. [Active] CIN = U74140MH2009PTC189774

Company & Directors' Information:- A N Y SERVICES PRIVATE LIMITED [Active] CIN = U74899DL1995PTC071457

Company & Directors' Information:- N B SERVICES PRIVATE LIMITED [Active] CIN = U74899DL1993PTC056484

Company & Directors' Information:- P C SERVICES PRIVATE LIMITED [Strike Off] CIN = U00894KA1985PTC006606

Company & Directors' Information:- M. V. S SERVICES INDIA PRIVATE LIMITED [Active] CIN = U93000DL2013PTC252172

Company & Directors' Information:- PRIYANKA CORPORATION PRIVATE LIMITED [Active] CIN = U51900KA2013PTC068718

Company & Directors' Information:- JAIN SERVICES PVT LTD [Under Process of Striking Off] CIN = U74140WB1988PTC044558

Company & Directors' Information:- W T S TRAVEL SERVICES PRIVATE LIMITED [Active] CIN = U63040MH1998PTC114052

Company & Directors' Information:- S D SERVICES PVT LTD [Active] CIN = U51109AS1998PTC005293

Company & Directors' Information:- H AND B SERVICES LIMITED [Strike Off] CIN = U72900MH2004PTC145775

Company & Directors' Information:- C & R SERVICES (INDIA) PRIVATE LIMITED [Active] CIN = U74140KA1996PTC019645

Company & Directors' Information:- TRAVEL INDIA PRIVATE LIMITED [Active] CIN = U63090MH2012PTC230882

Company & Directors' Information:- E AND A SERVICES (INDIA) PRIVATE LIMITED [Under Process of Striking Off] CIN = U51900MH1989PTC054373

Company & Directors' Information:- A. H. SERVICES PRIVATE LIMITED [Active] CIN = U74990MH2009PTC193917

Company & Directors' Information:- M E R I T SERVICES PRIVATE LIMITED [Strike Off] CIN = U51900MH1999PTC118445

Company & Directors' Information:- P F P SERVICES PRIVATE LIMITED [Active] CIN = U74900MH2009PTC293633

Company & Directors' Information:- P F P SERVICES PRIVATE LIMITED [Active] CIN = U74900WB2009PTC139742

Company & Directors' Information:- J. S. P. SERVICES PRIVATE LIMITED [Active] CIN = U63040DL1996PTC075731

Company & Directors' Information:- TRAVEL 4 U PRIVATE LIMITED [Strike Off] CIN = U63040KL2002PTC015752

Company & Directors' Information:- INDIA SERVICES LIMITED [Liquidated] CIN = U99999TN1946PLC000976

Company & Directors' Information:- TRAVEL SERVICES (INDIA) PRIVATE LIMITED [Strike Off] CIN = U63040TN1996PTC034259

Company & Directors' Information:- U M S SERVICES LIMITED [Active] CIN = U03210TZ1982PLC001208

Company & Directors' Information:- A T E SERVICES LIMITED [Strike Off] CIN = U74140MH2001PTC132923

Company & Directors' Information:- SERVICES (INDIA) PRIVATE LIMITED [Active] CIN = U74140DL1996PTC078465

Company & Directors' Information:- G I SERVICES INDIA LIMITED [Active] CIN = U74140DL2008PLC184088

Company & Directors' Information:- E AND E SERVICES LIMITED [Strike Off] CIN = U65992KL1988PLC005094

Company & Directors' Information:- S R V N SERVICES PRIVATE LIMITED [Strike Off] CIN = U50200DL2004PTC124035

Company & Directors' Information:- B H SERVICES (INDIA) PRIVATE LIMITED [Active] CIN = U74999MH2012FTC227035

Company & Directors' Information:- J D INDIA TRAVEL PRIVATE LIMITED [Active] CIN = U63040TN2007PTC063061

Company & Directors' Information:- A R SERVICES PRIVATE LIMITED [Active] CIN = U00000DL2001PTC109578

Company & Directors' Information:- J AND J SERVICES PRIVATE LIMITED [Active] CIN = U51900MH1995PTC092554

Company & Directors' Information:- L B D SERVICES PRIVATE LIMITED [Active] CIN = U00359BR1991PTC004694

Company & Directors' Information:- A 2 Z E SERVICES PRIVATE LIMITED [Strike Off] CIN = U72200KA2006PTC039105

Company & Directors' Information:- M P SERVICES INDIA PRIVATE LIMITED [Strike Off] CIN = U74999PN1999PTC013531

Company & Directors' Information:- B I N A R Y SERVICES (INDIA) PRIVATE LIMITED [Strike Off] CIN = U72900DL2000PTC103072

Company & Directors' Information:- M C SERVICES (INDIA) PRIVATE LIMITED [Strike Off] CIN = U74999PN1999PTC013532

Company & Directors' Information:- D & D SERVICES INDIA PRIVATE LIMITED [Strike Off] CIN = U51909DL1998PTC093967

Company & Directors' Information:- S C L SERVICES PRIVATE LIMITED [Active] CIN = U63012TN2001PTC046650

Company & Directors' Information:- A B SERVICES PRIVATE LIMITED [Strike Off] CIN = U74140DL1998PTC093545

Company & Directors' Information:- G P SERVICES PRIVATE LIMITED [Strike Off] CIN = U74899DL1989PTC037683

Company & Directors' Information:- JAIN AND CO PVT LTD [Strike Off] CIN = U65921UP1925PTC000288

Company & Directors' Information:- T S SERVICES PRIVATE LIMITED [Strike Off] CIN = U85320WB2003PTC095712

Company & Directors' Information:- A. S. V. P. SERVICES PRIVATE LIMITED [Strike Off] CIN = U74999HR2014PTC052304

Company & Directors' Information:- R AND T SERVICES PRIVATE LTD. [Strike Off] CIN = U72501DL1998PTC096640

Company & Directors' Information:- S S SERVICES PVT LTD [Strike Off] CIN = U74140WB1988PTC044009

Company & Directors' Information:- S S D SERVICES PRIVATE LIMITED [Active] CIN = U74910RJ1996PTC012694

Company & Directors' Information:- V & V SERVICES PRIVATE LIMITED [Strike Off] CIN = U74990MH2010PTC206211

Company & Directors' Information:- D S SERVICES PRIVATE LIMITED [Strike Off] CIN = U65923MH2012PTC226482

Company & Directors' Information:- P AND I SERVICES PRIVATE LIMITED [Active] CIN = U63090MH1981PTC024997

Company & Directors' Information:- V T TRAVEL PRIVATE LIMITED [Active] CIN = U63090PN2012PTC145185

Company & Directors' Information:- F F C SERVICES PRIVATE LIMITED [Active] CIN = U74900PN2014PTC153348

Company & Directors' Information:- R. B. SERVICES PRIVATE LIMITED [Active] CIN = U74999MH2017PTC302692

Company & Directors' Information:- Q C SERVICES PRIVATE LIMITED [Active] CIN = U74999PN2013PTC148110

Company & Directors' Information:- 4 U TRAVEL SERVICES PRIVATE LIMITED [Active] CIN = U63090TN2012PTC088943

Company & Directors' Information:- U & I TRAVEL (INDIA) PRIVATE LIMITED [Strike Off] CIN = U63030TG2012PTC085010

Company & Directors' Information:- S N SERVICES PRIVATE LIMITED [Strike Off] CIN = U74900JK2014PTC004110

Company & Directors' Information:- R N SERVICES PRIVATE LIMITED [Strike Off] CIN = U74900CH2013PTC034757

Company & Directors' Information:- R M E-SERVICES PRIVATE LIMITED [Active] CIN = U72300DL2007PTC166470

Company & Directors' Information:- A Y SERVICES PRIVATE LIMITED [Active] CIN = U74140DL2012PTC239759

Company & Directors' Information:- V. S. SERVICES PRIVATE LIMITED [Strike Off] CIN = U74999DL2012PTC233958

Company & Directors' Information:- S & V SERVICES PRIVATE LIMITED [Active] CIN = U74999DL2015PTC287145

Company & Directors' Information:- A R J SERVICES PRIVATE LIMITED [Active] CIN = U72200DL2015PTC286948

Company & Directors' Information:- M K R SERVICES PRIVATE LIMITED [Strike Off] CIN = U93000DL2012PTC242159

Company & Directors' Information:- C & C TRAVEL SERVICES PRIVATE LIMITED [Active] CIN = U74120DL2007PTC163792

Company & Directors' Information:- H T TRAVEL SERVICES PRIVATE LIMITED [Strike Off] CIN = U63000DL2011PTC214045

Company & Directors' Information:- G W SERVICES PVT LTD [Strike Off] CIN = U79140DL2001PTC111194

Company & Directors' Information:- B 2 B SERVICES PRIVATE LIMITED [Strike Off] CIN = U74140HR2013PTC049213

Company & Directors' Information:- R K SERVICES PRIVATE LIMITED [Active] CIN = U45200HR2007PTC041783

Company & Directors' Information:- A. R. T. SERVICES PRIVATE LIMITED [Active] CIN = U51900GJ2009PTC056248

Company & Directors' Information:- B 9 N SERVICES PRIVATE LIMITED [Active] CIN = U74900KL2012PTC032087

Company & Directors' Information:- V J SERVICES PRIVATE LIMITED [Strike Off] CIN = U29242GJ2013PTC074510

Company & Directors' Information:- N I SERVICES PRIVATE LIMITED [Strike Off] CIN = U64202KL2000PTC014355

Company & Directors' Information:- 7-A SERVICES PRIVATE LIMITED [Active] CIN = U74999DL2019PTC359011

Company & Directors' Information:- F I SERVICES PRIVATE LIMITED [Strike Off] CIN = U74999DL2001PTC113001

Company & Directors' Information:- C R D SERVICES PVT LTD [Active] CIN = U72300AS1988PTC003097

Company & Directors' Information:- B I M SERVICES PRIVATE LIMITED [Strike Off] CIN = U74140KA1974PTC002694

Company & Directors' Information:- T Q M SERVICES PVT. LTD. [Strike Off] CIN = U74140DL1999PTC101341

Company & Directors' Information:- D AND D TRAVEL SERVICES PRIVATE LIMITED [Strike Off] CIN = U60220PB2007PTC031194

Company & Directors' Information:- B AND M SERVICES PRIVATE LIMITED [Strike Off] CIN = U74140MH1977PTC019880

Company & Directors' Information:- M J B E-SERVICES PRIVATE LIMITED. [Strike Off] CIN = U72400DL2006PTC150832

    IBA/203/IB of 2019

    Decided On, 10 March 2020

    At, National Company Law Tribunal Chennai

    By, THE HONOURABLE MR. R. VARADHARAJAN
    By, JUDICIAL MEMBER & THE HONOURABLE MR. B. ANIL KUMAR
    By, TECHNICAL MEMBER

    For the Financial Creditor: M/s. Vikram U. Jain, Advocate. For the Corporate Debtor: Avdhesh Bairwa, Advocate.



Judgment Text

R. Varadharajan, Judicial Member.1. This Application has been filed under Section 7 of the Insolvency & Bankruptcy Code, 2016 (“hereinafter referred to as IBC, 2016”) by Priyanka Kumari Jain (hereinafter called as “Financial Creditor”) for the purpose of initiating the Corporate Insolvency Resolution Process (CIRP) against M/s. Spencer’s Travel Services Limited (hereinafter calls as “Corporate Debtor”).2. Part – I of the Application discloses the fact that the Applicant is an individual. Part-II of the Application gives all the particulars of the Corporate Debtor from which it is evident that the Corporate Debtor is a Limited Company with CIN:U63040TN2001PLC047809 which was incorporated on 26.09.2001 and that its Nominal Share Capital and Paid up Capital is Rs.526,00,00,000/- and Rs.65,06,10,940/- respectively. The Registered Office of the Corporate Debtor as per the Application is stated to be situated at Sudarshan Building, 6th Floor, No.27, Whites Road, Royapettah, Chennai – 600 014.3. Part –III of the Application discloses the fact that the Financial Creditor had proposed one Mr. Tharuvai Ramachandran Ravichandran as the Interim Resolution Professional, who has also filed his consent in Form 2. Form Part-IV of the Application, it is seen that a total sum of Rs. 21,58,719/- is being claimed by the Financial Creditor from the Corporate Debtor. The transactions given as to the amount claimed by the Financial Creditor as against the Corporate Debtor is stated to have arisen consequent upon a loan being given by the Financial Creditor to the Corporate Debtor.4. Part V of the Application describes the particulars of the documents, records and evidence of default of the Financial Debt which inter alia includes the following;a) Copy of Promissory Note acknowledging the existence of debt issued by the Corporate Debtor,b) Copy of Bank Statement of Financial Creditor showing transfer of monies from the Financial Creditor to the Corporate Debtor,c) Copy of Ledger Accounts of Corporate Debtor dated 01.04.2015 to 31.03.2016 and 01.04.2016 to 31.03.2017.d) Copy of Pay-in Slip dated 23.10.2018 received by the Financial Creditor while attempting to encash the cheque issued by Corporate Debtor.e) Copy of Cheque dated 23.10.2018 issued by the Corporate Debtor in the name of the Financial Creditor andf) Copy of inward return memo denoting the stoppage of payment by the Corporate Debtor dated 24.10.2018.5. The Ld. Counsel for the Financial Creditor submitted that the Corporate Debtor approached the Financial Creditor in the year 2015 seeking financial assistance for the running of its business. Pursuant to the same, the Financial Creditor provided amounts to a tune of Rs.25,00,000/- on 08.12.2015 to the Corporate Debtor with the understanding that the same was to be repaid in equal monthly instalment of Rs.2,50,000/-. In the said arrangement, a sum of Rs.20,00,000/- was advanced to the Corporate Debtor after deducting Rs.5,00,000/- as interest, as agreed between the parties.6. The Ld. Counsel for the Financial Creditor submitted that as a security for repayment, the Corporate Debtor issued a Cheque for a sum of Rs.25,00,000/- and a Promissory Note, on the date of disbursement of the loan amount thereby acknowledging the existence of a debt due and payable to the Financial Creditor.7. It is submitted by the Learned Counsel for the Financial Creditor that as per the understanding between the parties, the amounts were partly repaid by the Corporate Debtor in equal monthly instalments of Rs. 2,50,000/- for a period from 5 months from March to July, 2016. However, no further payments were forthcoming from the Corporate Debtor from August, 2016, onwards. Under the said circumstance, it is stated that since even after repeated requests, the Corporate Debtor failed to pay the remaining instalments, the Financial Creditor was constrained to encash the Cheque issued by the Corporate Debtor which got bounced as “Payment stopped by drawer” when presented to the Bank. In spite of repeated requests made by the Financial Creditor, the Corporate Debtor failed to repay the amounts due to the Financial Creditor. Hence, this Application.8. The Corporate Debtor has filed a detailed counter along with documents and submitted that the Corporate Debtor is in the business of travel related service and in the course of business, they got acquainted with one Pramod Chardia of M/s. Jineshwar Capital. The said Pramod Chardia had agreed to finance the Corporate Debtor a sum of Rs. 6,05,00,000/- through his consortium of financiers and money lenders, and towards the same, the Corporate Debtor executed several signed blank cheques, blank signed promissory notes and signed blank stamp papers as security in favour of M/s. Jineswar Infraventures Pvt. Ltd. Copy of sanction of unsecured loan dated 14.08.2015 is placed at page 1 of the typed set filed with the Counter.9. It is further submitted by the Learned Counsel for the Corporate Debtor that the Corporate Debtor had duly repaid the above said loan amount of Rs. 6,05,00,000/- along with interest by way of bank transfers on various dates and the same has been reflected in the statement of accounts maintained by Corporate Debtor, copy of which is enclosed at pages 3 to 6 of the typed set filed with the Counter Affidavit. Thus, there is no amount due and payable towards the above borrowing.10. While things resting so, the Corporate Debtor had approached M/s. Jineswar Infraventures Pvt. Ltd. and requested them to return the documents given as a security after the repayment of entire loan amount. However, the said security documents were not returned to the Corporate Debtor and due to which the dispute arose. It is further submitted by the Learned Counsel for the Corporate Debtor that all the blank Cheques, Promissory Notes and other securities provided by the Corporate Debtor has been misused by the Financial Creditor.11. Thereafter, the Corporate Debtor filed a Civil Suit in OS No.4759/2016 before VI Assistant Judge, City Civil Court, Chennai against M/s. Jineshwar Capital and Group praying for a direction to Mr. Pramod Chordia of M/s. Jineswar Infraventures Pvt. Ltd. to return the loan documents and negotiable instrument including the Cheques given as security and to restrain the Defendants therein from misusing the said security documents of the Corporate Debtor. In the said Suit, the Financial Creditor has been arrayed as 32nd Defendant in the said Suit. Copy of OS is placed at pages 48 to 66 of the typed set filed with the Counter.12. It is contended in the Counter that the Corporate Debtor had never approached the Financial Creditor and only M/s. Jineswar Infraventures Pvt. Ltd. approached the Corporate Debtor and agreed to finance the Corporate Debtor through consortium of financiers. It is further contended that the Financial Creditor was one of the financers under the consortium of financiers of M/s. Jineswar Infraventures Pvt. Ltd. from whom the Corporate Debtor availed the loan of Rs. 6,05,00,000/- and repaid the same. The Corporate Debtor denied any loan arrangement with Financial Creditor and submission of Cheque or Promissory Note acknowledging the debt in favour of the Financial Creditor.13. It is averred that the Corporate Debtor gave several blank Cheques, Promissory Notes and blank papers to M/s. Jineswar Infraventures Pvt. Ltd., who in turn colluded with the present Financial Creditor and misu sed the documents of the Corporate Debtor given to the other consortium of financer as security. In this regard, the Corporate Debtor has already filed a Civil Suit in OS No.4759/2016 to return the loan documents including the Cheques given as security and to restrain the Defendants therein (including the Financial Creditor) from misusing the said security documents of the Corporate Debtor. It is stated that the Financial Creditor who is arrayed as 32nd Defendant in the said OS was set ex parte along with other Defendant. The Corporate Debtor has also filed O.P.No.44/2019 before IX Assistant City Civil Court, against M/s. Jineswar Infraventures Pvt. Ltd. and the other consortium of financiers and money lenders including the Financial Creditor under the Tamilnadu Prohibition of Charging Exorbitant Interest Act, 2003, praying for the repayment of the exorbitant interest amount collected by M/s. Jineswar Infraventures Pvt. Ltd. and other financiers, which is pending.14. It is further contended that if the debt so fell due in 2016, the Financial Creditor has not brought the same to the notice of the Corporate Debtor until the filing of the present Application. Furthermore, the Financial Creditor has not produced a proper statement of accounts to the alleged claim of Rs.25,00,000/- made from the Corporate Debtor. Therefore, the Financial Creditor has come before this Tribunal with unclean hands with intent to use this forum as an arm twisting mechanism to cause irreparable loss to the Corporate Debtor. Hence, the Corporate Debtor has prayed to dismiss the Application with exemplary costs.15. Heard Ld. Counsel for both the sides and perused the records including the documents placed on file. The instant Application has been filed under Section 7 of the I&B Code, 2016 r/w Rule 4 of the IBBI (Application to Adjudicating Authority) Rules, 2016 (in short, AAA Rules). The Rule 4 of the said AAA Rules is extracted hereunder.4. Application by financial creditor.- (1) A financial creditor, either by itself or jointly, shall make an application for initiating the corporate insolvency resolution process against a corporate debtor under Section 7 of the Code in Form 1, accompanied with documents and records required therein and as specified in the Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016.In this context it is relevant to refer to attendant Regulation 8 of the IBBI (Insolvency Resolution Process for Corporate Persons) Regulations, 2016, which is extracted below:-8. Claims by financial creditors. (1) A person claiming to be a financial creditor, other than a financial creditor belonging to a class of creditors, shall submit claim with proof to the interim resolution professional in electronic form in Form C of the Schedule:Provided that such person may submit supplementary documents or clarifications in support of the claim before the constitution of the committee.(2) The existence of debt due to the financial creditor may be proved on the basis of –(a) the records available with an information utility, if any; or(b) other relevant documents, including-(i) a financial contract supported by financial statements as evidence of the debt;(ii) a record evidencing that the amounts committed by the financial creditor to the corporate debtor under a facility has been drawn by the corporate debtor;(iii) financial statements showing that the debt has not been paid; or(iv) an order of a count of tribunal that has adjudicated upon the non-payment of a debt, if any.The term ‘Financial Contract’ is defined in clause (d) of Sub-section 1 of AAA Rules, 2016;(d) “financial contract” means a contract between a corporate debtor and a financial creditor setting out the terms of the financial debt, including the tenure of the debt, interest payable and date of repayment;16. Referring to the aforementioned Rule, it becomes clear that it is incumbent upon the Financial Creditor while filing this Application to place on record before this Authority, the ‘Financial Contract’ and demonstrate without any ambiguity from the financial contract, the amount disbursed as per the loan/debt, the tenure of the loan/debt, the interest payable and the conditions of repayment. In the present case, it is evident that the Financial Creditor has not placed on record any Financial Contract or any Financial Agreement, in pursuance of which the loan was disbursed to the Corporate Debtor.17. By looking at the Application filed by the Financial Creditor, it has been alleged that the Corporate Debtor approached the Financial Creditor in the year 2015 for a loan period of 10 months with the condition that the Corporate Debtor was to repay the said loan amount including interest thereon at the rate of 2% per month. However, as stated supra, the Financial Creditor has not produced any Agreement or Financial Contract to substantiate such statement and it appears if at all to be only an oral agreement contested which is alleged to have been entered into between the parties, of which this Tribunal has no means to ascertain, as being a proceeding of summary nature, unlike a Civil Court cannot indulge in the luxury of taking evidence, oral or otherwise as to its existence.18. As to the aspect of whether any default being committed by the Corporate Debtor, the Financial Creditor contended that in view of the amount being disbursed which is reflected in the books of the Corporate Debtor, the same becomes repayable on demand with interest and the said amount not being paid by the Corporate Debtor, a default has arisen as contemplated under Section 3(12) of the I&B Code, 2016. However, we are not able to accept the

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said submissions made by the Ld. Counsel for the Financial Creditor, in view of the fact that there is no ‘Financial Contract’ entered into between the parties reflecting the tenure nor to substantiate the claim of interest, the transaction being a long transaction, unequivocally.19. In the matter of Prayag Polytech Private Limited – Vs – M/s. Good Marketing and Sales Private Limited, in IB-219(ND)/2019, one of us while sitting in the New Delhi Bench has dealt with the issue of ‘Financial Contract’ and has held that the primary onus about the details of the ‘Financial Contract’ and default is required to be demonstrated by the Applicant and in the instant case, the Financial Creditor, who is not able to place on record any ‘Financial Contract’, to demonstrate on its own the existence of ‘default’. The said view is also upheld by the Hon’ble NCLAT in Prayag Polytech Pvt. Ltd. –Vs- M/s. Good Marketing and Sales Private Limited, in Company Appeal (AT) (Insolvency) No.1307 of 2019 dated 25.11.2019, wherein the Hon’ble NCLAT has concurred with the view taken by NCLT, New Delhi, that the default as alleged cannot be determined in absence of any requisite document.20. Thus, in view of the facts mentioned supra, and in the absence of any ‘Financial Contract’ between the parties, this Authority is not able to ascertain the default on the part of the Corporate Debtor and hence we are constrained to dismiss this Application, however without any costs.
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