Bankey Bihari Goyal vs Ambrane India Pvt. Ltd. & Anr.

Heard Learned Counsel for the Appellant.

This Appeal has been filed against the order and judgment dated 12.01.2022 of the Adjudicating Authority (National Company Law Tribunal), New Delhi, Court-VI by which the Application filed by the Respondent-Financial Creditor has been admitted. The Appellant aggrieved by the said order has come up in the Appeal. Few facts are necessary to be noted for deciding this Appeal:-

An amount of Rs. 1,25,00,000/- was disbursed to the Appellant after the Board Resolution dated 10.01.2018. The case of the Financial Creditor was that amount of Rs. 1,25,00,000/- was unsecured loan disbursed to the Corporate Debtor against interest @ 9% per annum to be compounded on 31.03.2018 and to be repaid on or before 31.12.2018. The said amount was disbursed through NEFT made by the name of BJ Infotech on 30.01.2018. A legal notice was given by the Financial Creditor on 06.08.2019 on account of non-payment of the loan to the Corporate Debtor and thereafter the Financial Creditor filed an Application under Section 7 claiming for an amount of Rs. 1,25,00,000/- with interest. The Application was opposed by the Corporate Debtor and Corporate Debtor submitted that no loan has been taken by the Corporate Debtor from the Financial Creditor and no written agreement has been produced by the Financial Creditor between the Financial Creditor and the Corporate Debtor with regard to grant of unsecured loan. However, it was not denied that amount was disbursed by BJ Infotech. The Adjudicating Authority after hearing the parties, being satisfied that BJ Infotech was only trade name of the Financial Creditor and disbursement of the amount has not been disputed, admitted the Section 7 Application. Aggrieved by the order admitting the Application under Section 7, the Appellant has come up in this Appeal.

Shri Abhishek Anand, learned Counsel for the Appellant submits that there was no written contract for disbursement of the loan. He submits that as per the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules 2016, the ‘financial contract’ as defined in Rule 3(1)(d) includes the tenure of the debt, interest payable and date of repayment which having not been proved herein, there was no financial contract and the Adjudicating Authority committed error in admitting the Application under Section 7.

We have considered the submissions of the learned counsel for the Appellant and perused the record.

In the present case, there is no dispute regarding disbursement of amount of Rs.1,25,00,000/-. In this context, we have looked into the balance sheet ending 31.03.2018 which has been brought on the record in the Appeal itself at Page 383 under the heading ‘Note No. 4 Short-term borrowings’, it was mentioned “loans repayable on demands from others” in which against ‘B J Infra unsecured’ amount of Rs.1,25,00,000/- was clearly mentioned. The balance sheet of the Corporate Debtor at Page 383 as noted above is clear admission of unsecured loan taken from B J Infra which was repayable on demands. The submission of the learned counsel for the Appellant that there was no contract with regard to tenure of the loan is belied by the balance sheet of the Corporate Debtor itself. When the loan is payable on demand, the tenure is clearly provided therein.

Now, coming to the Rule 3(d) which has been relied by learned counsel for the Appellant. Rule 3(d) of the Adjudicating Authority Rules, 2016 provides as follow:-

There cannot be any dispute with the definition of ‘financial contract’ and the ingredients which are required to the fulfilled for contract to be treated as financial contract but the Rule 3(d) or any of the provisions in the Code does not indicate that a formal written contract is necessary for treating a contract to be a financial contract. It is well settled that contract can be entered both orally as well as by written contract and all ingredients of financial contract can be very well proved even if there is an oral contract.

In the facts of the present case and the materials which were placed before the Adjudicating Authority, the Adjudicating Authority was satisfied that there was financial contract which was entered between the parties and the amount was advanced to the Corporate Debtor with regard to which there is no dispute. We do not find any error in the impugned order of the Adjudicating Authority admitting the Application under Section 7. There is no merit in the Appeal. The Appeal is dismissed.