M/s Kaliber Associates Pvt. Ltd. vs M/s Renu Proptech Pvt. Ltd.

PER: SH. ASHOK KUMAR BHARDWAJ, MEMBER (J)

The prayer in the IA is to allow the Applicant therein (the Petitioner in IB-51/ND/2022) to take on record the documents i.e., the Balance Sheet qua the Petitioner for the financial year ending 31.03.2021. For the reasons stated therein the IA is allowed and the Balance Sheet is taken on record.

As could be gathered from the facts espoused by him, the Petitioner herein is presently undergoing the Liquidation process. It was ordered to be liquidated in terms of the order dated 02.01.2020 passed by this Adjudicating Authority in C.P. (IB) No. 228/2018. By filing an application bearing I.A. No. 4559/2020 in C.P. (IB) No. 228/2018 under Section 33(5) read with Section 35(1)(k) of IBC, 2016, the Ld. Liquidator appointed qua the Petitioner sought approval of this Adjudicating Authority for institution of suit or other legal proceedings against various borrowers of the Petitioner including the Respondent herein.

According to the Petitioner, as could be derived from the bank statement of the Petitioner for the period from 14.01.2016 to 20.01.2016, various loans and advances totalling Rs.3,31,00,000/- (Rupees Three Crores and Thirty-One Lakhs Only), had been disbursed to the Corporate Debtor. The details of the amount reads thus: -

It could be pointed out by the Ld. Counsel for the Petitioner, the ‘Audited Financial Statements’ of the Petitioner as on 31.03.2018 and its Provisional Financial Statements as on 31.03.2019 (CIRP commencement date) reflect a total amount of Rs. 3,31,00,000/- (Rupees three Crores and Thirty-One Lakhs Only) as unpaid to the Petitioner by the Respondent.

Audited Financial Statements of the Respondent as on 31.03.2020 also reflects that the Respondent had borrowed money amounting to Rs. 3,31,00,000/- (Rupees Three Crores and Thirty-One Lakhs Only) from the Petitioner, which is due and also payable. Accordingly, the Respondent has acknowledged the amount due to be paid to the Petitioner, (M/s Kaliber Associates Pvt. Ltd., the Applicant/Financial Creditor). The relevant entry could be found under the heading “Business Advances” under “Other Current Liabilities” in the Respondent’s (Corporate Debtor’s) Audited Financial Statement as on 31.03.2020.

In terms of the submissions made by the Petitioner, the aforementioned amount was a short term loan given by the Petitioner to the Respondent, which was payable on demand, thus the first demand notice was given to Respondent by the Interim Resolution Professional of M/s Kaliber Associates Private Limited i.e., the Petitioner herein on 31.01.2019, intimating the Directors of the Respondent that the record (Financial Statements of the Applicant as on 31.03.2017) of the Petitioner reflected that a sum of Rs.3,31,00,000/- was due and payable by the Respondent to the Petitioner. In terms of the notice, Mr. Vinay Talwar, RP also called upon the Respondent to pay the outstanding balance amounting to Rs. 3,31,00,000/- to the Petitioner.

Again, Mr. Ritu Rastogi, the RP, in terms of her missive dated 10.05.2019 called upon the Directors of the Respondent to pay the aforementioned amount of Rs. 3,31,00,000/- to the Petitioner. The Respondent vide its email dated 10.06.2019 gave its response to the letter dated 10.05.2019 written to it by the RP of the Petitioner, espousing therein that one M/s BDR Builders and Developers Private Limited i.e., a sister concern of the Corporate Debtor belonging to BDR Group being run by Mr. Rajesh Gupta (erstwhile Director) and Mr. Dinesh Gupta, had advanced a loan amounting to Rs. 6,00,00,000/- to the Petitioner on the request made by its Ex-Director, Mr. Lalit Modi and a sum of Rs. 3,31,00,000/- was paid by Mr. Lalit Modi, Ex-Director through the Petitioner to the Corporate Debtor as his advance share/contribution to purchase a property at Vasant Vihar, New Delhi. According to Respondent, the proposed purchase could not materialize due to certain reasons beyond the control of the parties.

Further stand of the Respondent as captioned by the Petitioner in its Written Synopsis is that Mr. Rajesh Gupta and Mr. Dinesh Gupta Directors of M/s BDR Builders and Developers Private Limited had requested Mr. Lalit Modi to repay the loan amounting to Rs.6,00,00,000/- and Mr. Lalit Modi conveyed his inability to repay the amount and made following proposals: -

ii) Mr. Lalit Modi offered to sell the property bearing no. C-1/215 Lajpat Nagar, New Delhi in favour of M/s BDR Builders and Developers Private Limited for a consideration of Rs. 1.51 Crores.

iii) For the remaining amount he would try to repay the same as early as possible.

The conclusive plea of the Respondent as referred to by the Petitioner itself is that the amount of Rs. 3,31,00,000/- shown in the books of Respondent (M/s Renu Proptech Private Limited) was transferred in favour of M/s BDR Builders and Developers Private Limited and the required adjustment was done in the books of accounts of the CD/Respondent, thus the amount of Rs. 3,31,00,000/- as alleged was not payable by Respondent to Petitioner. Nevertheless, the plea of the Petitioner is that the Respondent could not provide any document or information regarding the alleged adjustment and no entry in Audited Financial Statement of CD/Respondent was found to show that the sum of Rs. 3,31,00,000/- paid by the Petitioner to Respondent was adjusted in favour of M/s BDR Builders and Developers Private Limited.

In any case, after the reply given by the Respondent, the RP of M/s Kaliber Associates Private Limited namely Mr. Mohan Lal Jain (who replaced Ms. Ritu Rastogi) issued further notices/letters dated 18.07.2019 and 20.07.2020 to the CD calling upon it to pay the aforementioned amount of Rs. 3,31,00,000/- to Petitioner with interest, within 7 days. In response to the notice dated 20.07.2020, the Respondent reiterated the stand taken by it in reply dated 10.06.2019. Re-joining the stand taken by the CD, the Petitioner wrote letter dated 30.07.2020 espousing that the Oral Agreement entered between the parties as alleged by the Respondent is of no credibility and has no evidentiary value. It is also the plea raised on behalf of the Petitioner that even the plea of adjustment of the amount of Rs. 3.31 Crores payable by the Respondent to Petitioner is not acceptable as on adjustment of the said amount and the consideration for the property bearing no. C-1/215, Lajpat Nagar, Delhi i.e. Rs. 1,51,00,000/-, the remaining amount payable by the Petitioner to BDR Builders and Developers Pvt. Ltd. was Rs. 1.18 Crores, but while submitting its claim before Liquidator of the Petitioner in Form-D, the BDR Developer did not mention about any such adjustment with CD and filed the claim for an amount of Rs. 4,49,00,000/- after adjusting only the amount of Rs. 1,51,00,000/- i.e. consideration for the aforementioned property viz. C-1/215, Lajpat Nagar, Delhi. As can be seen from para-1 and 2 of Part-IV of the Petition, the amount disbursed by the Petitioner to Respondent was Rs. 3,31,00,000/- and the same was defaulted to be paid on 31.01.2019.

Per contra in the reply filed by it, the Respondent (Corporate Debtor) has espoused that the amount of default viz. Rs. 3.31 Crores was paid by the Financial Creditor to the Corporate Debtor in two tranches i.e. Rs. 2.31 Crores on 14.01.2016 and Rs. 1 Crore on 20.01.2016, thus the present petition being preferred on 17.01.2022, much beyond the prescribed period of limitation is not maintainable. As could be pleaded also by the Petitioner, the Ld. Counsel for the Respondent (CD) contended that M/s BDR Builders and Developers Pvt. Ltd. and the CD are sister concerns, thus the amount of Rs. 3.31 Crores claimed by the Petitioner as an amount defaulted to be repaid by the CD stood adjusted against Rs. 6 Crores payable by the Petitioner to M/s BDR Builders and Developers Pvt. Ltd. To buttress the plea, the Respondent could make reference to particulars of RTGS dated 09.04.2013 and 24.09.2013 to demonstrate the payment of Rs. 2 Crores and 4 Crores respectively by BDR Builders and Developers Pvt. Ltd. to the Petitioner. The Respondent could also make reference to the balance sheet of the Petitioner for the period ending 31.03.2017 as also to the record of Auditor to show the receipt of Rs. 6 Crores by the Petitioner from M/s BDR Builders and Developers Pvt. Ltd. i.e. the sister concern of the Corporate Debtor. According to the CD Mr. Dinesh Gutpa Director of M/s BDR Builders and Developers Pvt. Ltd., his brother Sh. Rajesh Gupta, the then Director of Corporate Debtor (Respondent) and Lalit Modi the then Director of the Petitioner (FC) had longstanding business relationship, thus in November 2015, during the course of a meeting between them an oral agreement was arrived at to purchase a property in Vasant Vihar and reconstruct the same for sale through Respondent (CD). It is the case of the CD that it was pursuant to such Oral Agreement that Shri Lalit Modi, the then Majority Shareholder (90% shares) deposited the amount of Rs. 3.31 Crores in favour of the Respondent (CD) on 14.01.2016 and 20.01.2016. Regarding the purchase of the property, the Respondent could only state that it was on account of the reasons beyond the control of the parties that the purchase could not be materialised. Para 5 and 6 of the reply filed by the CD reads thus: -

The further stand taken by the Respondent in its reply is that in the month of September 2016 S/Shri Rajesh Gupta and Dinesh Gupta requested Shri Lalit Modi the then Director of the Petitioner (FC) to repay the loan amount of Rs. 6 Crores, as advanced by M/s BDR Builders and Developers Pvt. Ltd. to the Petitioner, along with interest, which Mr. Lalit Modi was unable to repay on account of his financial constrain. And it was in this wake that the Petitioner herein represented by Mr. Lalit Modi gave an offer to M/s BDR Builders and Developers Pvt. Ltd. to adjust the sum of Rs. 3.31 Crores paid by the Petitioner to the Respondent against the amount payable by the Petitioner to M/s BDR Builders and Developers Pvt. Ltd. and further sold the property bearing no. C-1/215, Lajpat Nagar, New Delhi-110024, for consideration of part of balance amount payable by Petitioner to M/s BDR Builders and Developers Pvt. Ltd. i.e. an amount of Rs. 1.51 Crores. To buttress the plea regarding transfer of the property bearing no. C-1/215, Lajpat Nagar, New Delhi in favour of M/s BDR Builders and Developers Pvt. Ltd. by the Petitioner, the Respondent made a reference to the Sale Deed dated 28.10.2016 registered vide Registration No. 3942 in Book No. 1, Volume No. 175 at Pages 133 to 141 dated 03.11.2016.

In Rejoinder, filed by it, the Petitioner has pleaded that the sum in issue i.e. Rs. 3.31 Crore disbursed by it to the Respondent (CD) is a short-term loan repayable on demand and the first Demand Notice was issued by the Interim Resolution Professional of the Petitioner on 31.01.2019, whereby the Directors of CD were intimated that as per the financial statement of the Petitioner as on 31.03.2017 a sum of Rs. 3.31 Crore was due against the CD and was payable by it to the Petitioner herein. To rebut the plea of limitation raised on behalf of the Respondent, the Petitioner espoused that the loan advanced by the Petitioner to Respondent (CD) being short term loan was payable on demand and the limitation shall commence with the failure of debtor to respond to notice of demand. In terms of the contention raised on behalf of the Petitioner, the date of notice of demand being 31.01.2019, the present petition, filed under Section 7 of IBC, 2016 is within prescribed period of limitation and is not time barred. To buttress the plea, the Ld. Counsel for the Petitioner relied upon the judgment dated 22.02.2012 passed by High Court of Delhi in IFCI Venture Capital Funds Ltd. Vs. Santosh Khosla and Ors., ILR (2012) II Delhi 646. The relevant excerpt of the judgment reproduced by the Petitioner in its rejoinder reads thus: -

To meet the preliminary objection regarding non-maintainability of the petition, being barred by limitation (ibid), the Ld. Counsel for the Petitioner also relied upon the judgment of Hon’ble High Court of Delhi in Virender Kumar Jain Vs. Alumate (India) Pvt. Ltd., 2012 SCC Online Del 1313. In the said case, Hon’ble Delhi High Court viewed that if the averments in the plaint showed that the loan was given without fixing any date of repayment, the loan would be repayable on demand and the period of limitation would commence on the date of demand. In the wake of the plea, espoused on behalf of the Petitioner, the present Petition being preferred on 17.01.2022 i.e., within 3 years of Demand Notice dated 19.01.2019 cannot be treated as time barred. Besides in the Audited Financial Statement of Respondent, as on 31.03.2020, the amount of Rs.3,31,00,000/- received by it from the Petitioner has been acknowledged. Indubitably, the acknowledgement of receipt of amount defaulted to be paid extend the period of limitation. In such situation the limitation starts from the date of acknowledgement.

To meet the plea regarding payment of Rs. 3.31 Crores by it to the Respondent (CD) as its contribution/share to buy property in Vasant Vihar, the Petitioner pleaded in the rejoinder that in the absence of there being any written agreement in this regard, the plea cannot be relied upon. According to the Petitioner, no credence can be attached to the stand taken by the Respondent that only on oral understanding between Dinesh Gupta, Rajesh Gupta and Lalit Gupta, the Petitioner could contribute the aforementioned amount. The Petitioner also denied the plea of the Respondent (CD) that the Petitioner had transferred the property bearing no. C-1/215, Lajpat Nagar, New Delhi in the name of M/s BDR Builders and Developers Pvt. Ltd. to satisfy the part of the amount of loan of Rs. 6 Crores taken by it from the said company. According to the Petitioner, there was not even a whisper in the Sale Deed dated 28.10.2016, in terms of which the property was transferred/sold to M/s BDR Builders and Developers Pvt. Ltd. that the sale was for partial satisfaction of the debt of Rs. 6 Crores payable by the Petitioner to M/s BDR Builders and Developers Pvt. Ltd. In the rejoinder filed by it, the Petitioner espoused that the property bearing no. C-1/215 Lajpat Nagar, New Delhi-110024 is still reflected in the balance sheet of the Petitioner as on 31.03.2018. Nevertheless, in para 19 of the rejoinder, the Petitioner admitted that after the issuance of notice by this Adjudicating Authority in the present proceedings on 27.01.2022, M/s BDR Builders and Developers Pvt. Ltd. sought to withdraw its claim staked before the Liquidator of the Petitioner and amended the same to enable the Corporate Debtor to evade its liability. According to the Petitioner, in view of the provisions of Section 38(5) the revised claim filed by M/s BDR Builders and Developers Pvt. Ltd. could not be allowed to be withdrawn.

We have heard the Counsels for the parties and perused the record. The factual position admitted by the parties is: - (i) the Petitioner herein paid Rs. 3.31 Crore to CD i.e. partially on 14.01.2016 (2.31 Crore) and balance on 20.01.2016 (1 Crore); (ii) the Petitioner is liable to pay Rs. 6 Crores to M/s BDR Builders and Developers Pvt. Ltd. The issue of controversy between the Respondents is whether Rs. 3.31 Crore paid by the Petitioner to the Respondent is financial debt or advance given by the Petitioner to the Respondent. In the wake of the rival submissions and pleadings espoused by the counsels for the parties, the following issues arise to be determined by us: - (i) whether the amount of Rs. 3.31 Crore admittedly given by Petitioner to Respondent is financial debt or business advance; (ii) whether entry in balance sheet is sufficient proof to establish that the transaction between the parties referred to therein is financial debt only; (iii) whether the amount (ibid) admittedly paid by the Petitioner to Respondent being business advance cannot be financial debt; (iv) whether the present petition is barred by limitation.

To determine the first proposition, we need to analyse the definition of financial debt, given in Section 5(8) of IBC, 2016. The definition reads thus: -

As can be seen from the aforementioned definition of the financial debt, it includes money borrowed against the payment of interest; any amount raised by acceptance under any acceptance credit facility or its dematerialized equivalent; the amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan, stock or any similar instruments; the amount of any liability in respect of any lease or hire purchase contract which is deemed as a financial lease or a capital lease; receivables sold or discounted other than any receivable sold on non-recourse basis; any amount raised under any other transaction, including any forward sale or purchase agreement, having the commercial effect of a borrowing; any derivative transaction entered into in connection with protection against or benefit form fluctuation in any rate or price; the amount of any liability in respect of guarantee or indemnity for any of the items referred to in sub-clause a-h of sub-section 8 of 5 of IBC, 2016. As far as the question of amount being raised by acceptance under any acceptance credit facility or its dematerialized equivalent is concerned, the acceptance credit is a type of letter of credit i.e. paid by a time draft authorising payment on or after a specific date, if the terms of the letter of credit have been complied with. The bank accepts Bills of Exchange drawn on the bank by the debtor discounts them and agree to pay them when they mature. There are two types of acceptance of credit, confirmed and unconfirmed. Unconfirmed credit means that the buyer takes the risk that payment will not be made due to any number of contingencies such as shipment, non-delivery, confiscation by Custom Authorities or any other problems. Confirmed acceptance credit means the bank upon which the credit has been issued essentially guarantees payment as long as the terms of LOC are complied with. Certainly, in the present case there being no letter of credit, no such proposition arises. Apparently, the present case does not involve any issue regarding amount raised pursuant to any note purchase facility or issue of bonds, notes, debentures, loan stock, or any similar instrument. The transaction alleged in the captioned petition is also not covered under Clause c, d, e, f, g, h and i of sub-section 8 of Section 5 of IBC, 2016.

The salient proposition arises in the present petition, as far as the first and third issues are concerned, is whether in the absence of any financial contract required to be in existence in terms of provisions of Regulation 8(2)(b)(i) of IBBI (Insolvency Resolution Process for Corporate Persons) Regulations 2016, the amount of Rs. 3.31 Crore can be treated as financial debt, only because the same is reflected in financial statement of the Petitioner. To decipher the proposition, a reference can be made to the judgment of Hon’ble NCLAT in Earth Gracia Buildcon Pvt. Ltd. vs. Earth Infrastructure Ltd. (2021 SCC Online NCLAT 502), in which relying upon the judgment of Hon’ble Supreme Court in Phoenix Arc Pvt. Ltd. vs. Spade Financial Services Ltd. (Civil Appeal No. 2842 of 2020), the Appellate Tribunal viewed that the essential ingredient of a financial debt is disbursal against consideration for the time value of money. In Anuj Jain IRP for Jaypee Infratech Ltd. vs. Axis Bank Ltd. 2020 SCC Online Supreme Court page 237, relied upon by the Hon’ble NCLAT in Earth Gracia Buildcon Pvt. Ltd. (ibid), Hon’ble Supreme Court ruled that the requirement of existence of a debt which is disbursed against the consideration for the time value of money remains is an essential part even in respect of any of the transactions/dealing mentioned in Clauses a-i of Section 5(8) of the Code, even if it is not necessarily stated therein. In the said judgment, Hon’ble Supreme Court categorically viewed that any of the transactions stated in sub-clauses (a) to (i) of Section 5(8) would be falling within the ambit of ‘financial debt’ only if it carries the essential elements stated in the principal clause or at least has the features which could be traced to such essential elements in the principal clause. In terms of the view taken by the Hon’ble Supreme Court in the said judgment (Anuj Jain IRP for Jaypee Infratech Ltd.) (supra) the essential element of disbursal and that too against the consideration for the time value of money need to be found in the genesis of any debt before it may be treated as financial debt within the meaning of Section 5(8) of the Code. The debt may be of any nature but a part of it is always required to be carrying or corresponding to or at least having some traces of disbursal against consideration for the time value of money. The time value of money need not necessarily be the ‘interest’. Enhancement of assets, increase in production and the growth in profits, share value or equity ensures to the benefit of such stake holders are time value of money (IB)-51/(ND)/2022 constituting the consideration for disbursement of such amount raised as debt with obligation on the part of the company to discharge the same. Relying upon its earlier judgment in Shailesh Sangani, in Earth Gracia Buildcon Pvt. Ltd. (ibid), Hon’ble NCLAT further viewed thus: -

The view taken by Hon’ble Supreme Court in Japyee Infratech Ltd. (Supra) was reiterated in Orator Marketing Pvt. Ltd. vs. Samtex Desinz Pvt. Ltd. (Civil Appeal No. 2231 of 2021). In the said case, Hon’ble Supreme Court (IB)-51/(ND)/2022 also analysed the connotation of Corporate Debtor and Creditor. Referring to Section 3(8) of IBC, 2016, Hon’ble Supreme Court viewed that a ‘Corporate Debtor’ means a corporate person who owes a debt to any person as per the definition of the expression in Section 3(8) of IBC, 2016. In terms of the view taken by the Hon’ble Supreme Court in the said judgment, financial creditor is a person who has direct engagement in the functioning of a Corporate Debtor; who is involved right from the beginning while assessing the viability of Corporate Debtor; who would engage in restructuring of the loan as well as in reorganisation of the Corporate Debtor’s business when there is financial stress. In other words, the financial creditor, by its own direct involvement in a functional existence of corporate debtor, acquires unique position, who could be entrusted with the task of ensuring the sustenance and growth of the corporate debtor, akin to that of a guardian. In the context of insolvency resolution process, this class of stakeholders, namely, financial creditors, is entrusted by the legislature with such a role that it would look forward to ensure that the corporate debtor is rejuvenated and gets back to its wheels with reasonable capacity of repaying its debts and to attend on its other obligations. Protection of the rights of all other stakeholders, including other creditors, would obviously be concomitant of such resurgence of the corporate debtor.

As far as the present case is concerned, when the plea of the Petitioner is that it gave short-term loan to Respondent, the stand espoused by the Respondent is that the amount of Rs. 3.31 Crore was given by the ex-director of FC/Petitioner, namely, Lalit Modi to the CD as its share/contribution (IB)-51/(ND)/2022 towards the amount which both the Petitioner and CD were to utilise to buy some property in Vasant Vihar. According to the CD, the amount claimed by the Petitioner as short-term loan was, in fact, an advance given by the Petitioner to Respondent as contribution to buy some property and cannot be treated as short-term loan, as there was no time value of money involved. To buttress the plea, he relied upon the judgment of Hon’ble NCLAT in PEC Limited Phulchand Exports Pvt. Ltd. (Company Appeal) (AT) (Insolvency No. 1071/2021). In the said case, the amount of Rs. 63.57 Crores given by PEC Limited to Phulchand Exports Pvt. Ltd. as advance, as both of them had entered into contract for procurement, shipping and export of iron ore. The Hon’ble NCLAT refused to accept the said amount as financial debt.

Apparently, in the present case, there is no contract between the FC and CD like the one entered into between PEC Limited and Phulchand Exports Pvt. Ltd., for buying the property, as alleged by the CD. Thus, the aforementioned judgment of Hon’ble NCLAT in Company Appeal (AT) Insolvency No. 1071/2021 is in distinct facts. Even otherwise also, the CD is unable to give any details/particulars of the property which according to it was sought to be purchased by the Petitioner and CD jointly. Further, indubitably the amount of Rs.3.31 Crores given by the Petitioner to CD, is reflected in the Financial Statement of the CD. Even if we accept the plea of the CD that the money was given to it, in advance to buy property, apparently the same was given to increase the asset of CD is for consideration of time value of money and cannot be treated as an amount involving no time value of money. It is not the case of the CD that the amount was not received by it. Once the receipt of amount (IB)-51/(ND)/2022 by CD is not in dispute and the amount is not returned/repaid on demand, there is apparently a default committed by the CD.

Placing reliance on the judgment dated 02.12.2019 in Company Appeal (AT) (Insolvency No. 468/2019) viz. Jagdambey International vs. Visa Powertech Pvt. Ltd. (2019 SCC Online NCLAT 1356), Ld. Counsel for the Respondent submitted that in the absence of there being any document to show that the amount reflected in the ledger was disbursed as financial debt or a debt for time value of money, it cannot be held that the entry reflected in ledger and balance sheet of the Petitioner is sufficient proof to arrive at the conclusion that the Petitioner had given the money shown in the balance sheet as short-term loan which should be treated as financial debt. Para 4 and 5 of the judgment reads thus: -

We cannot be oblivious of the fact that the Ex-Director of the Petitioner paid an amount of Rs. 3.31 Crore to the Respondent herein. The transaction is admitted both by the Petitioner and the Respondent. Both of them have tried to give their own version regarding the transaction but none of them could denied the transaction.

Even otherwise also, M/s BDR Builders and Developers Pvt. Ltd. could also file Intervention Petition 39/2022 categorically stating therein that the Respondent herein had paid a sum of Rs. 3.31 Crore to BDR Builders and Developers Pvt. Ltd. vide cheque no. 000717 dated 12.08.2020 drawn on Axis Bank Limited and the amount payable by Respondent to Petitioner herein may be adjusted against the claim of M/s BDR Builders and Developers Pvt. Ltd. against the Petitioner, in liquidation proceedings. Para 13-19 of the Petition reads thus: -

Thus, apparently, there is evidence on record that the CD is liable to return an amount of Rs.3.31 Crores to Petitioner and has defaulted in repaying the same. While, taking a decision regarding admission of an application under Section 7 (5) of IBC, 2016, the Adjudicating Authority need to be satisfied that a default has occurred, the application is complete and there is no disciplinary proceedings pending against the proposed RP. Apparently, the CD committed default in payment of the amount of loan against the aforementioned loan accounts. The application is complete and the RP suggested by the Petitioner has declared that he is not facing any disciplinary proceedings. The present petition could be preferred within 3 years from the date of demand as also Financial Statement in which the amount is shown due and payable by CD to FC. Being left with no other option, we admit the present Petition.

In the wake, moratorium as provided under Section 14 of IBC, 2016 is declared qua the CD and as a necessary consequence thereof the following prohibitions are imposed qua the CD, which must be followed by all and sundry:

As proposed by the Petitioner, Mr. Gagan Gulati, having Registration No. IBBI/IPA-002/IP-N00893/2019-2020/12832 (Email: [email protected]) is appointed as IRP, subject to the condition that no disciplinary proceeding is pending against him and disclosures as required under IBBI Regulations, 2016 are made by him within a period of one week from this Order. It is further ordered that:

The Petitioner is directed to deposit Rs. 2,00,000/- only with the IRP to meet the immediate expenses. The amount, however, will be subject to adjustment by the Committee of Creditors as accounted for by Interim Resolution Professional and shall be paid back to the Financial Creditor.

A copy of this Order shall immediately be communicated by the Registry/Court Officer of this Tribunal to the Petitioner /Financial Creditor, the Respondent/Corporate Debtor and the IRP mentioned above.

In addition, a copy of this Order shall also be forwarded by the Registry/Court Officer of this Tribunal to the IBBI for their records.

By way of the captioned IA, the Applicant i.e., the CD in Company Petition (IB) No. 51/ND/2022 has tried to espouse that as by moving IA No. 4101/2022 dated 23.08.2022 in its liquidation process, initiated in terms of the order passed in (IB)-228(PB)/2018, the Petitioner herein as sought to assign its unsold asset viz. the amount of Rs. 3.31 Crores defaulted to be paid by the CD, to M/s Builders and Developers Pvt. Ltd. i.e., the sister concern of the CD for Rs.16,51,000/-, the IB No. 51/ND/2022 should be heard after disposal of IA No.4101/2022(ibid). The plea raised in the IA is weird. Nevertheless, we have already passed the order in Company Petition (IB) No. 51/ND/2022 (Supra), thus the captioned IA has become infructuous and is dismissed accordingly.

The salient plea espoused by the Applicant in the Intervention Petition namely Builder and Developers Pvt. Ltd. is that Mr. Lalit Modi Ex-Director of the Petitioner was liable to pay Rs.6 Crores to the Applicant and the Applicant being a sister concern, there was understanding between Mr. Lalit Modi, the Applicant in Intervention Petition and CD that Rs.3,31,00,000/- payable by CD to Petitioner would be adjusted against the aforementioned amount of Rs. 6 Crores payable by Petitioner to M/s Builders and Developers Pvt. Ltd. i.e., the Applicant. It is also the plea espoused by the Applicant that for another amount of Rs.1.51 Crores, Mr. Lalit Modi had transferred a property viz. C-1/215, Lajpat Nagar to the Applicant herein. The factual plea espoused by the Applicant is falsified from the very fact that the Applicant in the Intervention Petition had staked a claim for Rs.4.49 Cr. (in Form D), before the IRP/RP/Liquidator of the Petitioner. Thus, it had taken into account the price of the aforementioned property i.e. Rs.1.51 Crores only and not the defaulted amount i.e. Rs. 3.31 Crores. Even otherwise also, the Applicant is an independent entity and has no locus to intervene in the present proceedings. The Intervention Petition is not maintainable ergo the same is rejected.