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Judgment
PER SHRI L. N. GUPTA, MEMBER (T)
M/s. Karina Healthcare Private Limited (for brevity, the 'Applicant/Financial Creditor') has filed the present petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 (for brevity, the 'IBC, 2016') read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 with a prayer to initiate the Corporate Insolvency Resolution Process (CIRP) against M/s. HN Reacon Private Limited (the 'Respondent').
The Respondent namely, M/s. HN Reacon Private Limited is a Company incorporated on 13.02.2004 under the provisions of the erstwhile Companies Act, 1956 with CIN U70101DL2004PTC124645 having its registered office at H.N-106, I-Floor (near Giri Raj Hotel) Sarai Kale Khan, New Delhi-110013, which is within the territorial jurisdiction of this Tribunal. The Authorized Share Capital of the Respondent Company is Rs.75,00,000/- and Paid-up Share Capital is Rs.20,24,100/- as per the master data annexed with the Petition.
It is stated by the Applicant that it had provided an unsecured loan to the tune of Rs.15,13,65,000/- to the Respondent. It is further stated that the loan was disbursed during the period from February 2013 to March 2013 and on 27.08.2015. The Applicant has placed the Loan Agreement dated 17.12.2021 on record. It is further stated that the Respondent had deposited Rs. 01,08,430,733/-.
The Applicant has further stated that it has sent the demand notice dated 03.01.2022, demanding an outstanding amount of Rs.4,29,34,267/-. The particulars of the unpaid amount of debt and the date of default are mentioned in Part IV of the application, which is reproduced below, for the sake of convenience:
PART - IV
| PARTICULARS OF FINANCIAL DEBT | ||
|---|---|---|
| 1. | Total amount of debt granted Date(S) of disbursement | Financial Debt Amount: Principal Amount Rs. 4,29,34,267/- (Rupees Four Crore Twenty Nine Lakhs Thirty Four Thousand and Two Hundred Sixty Seven Only) was disbursed into many tranches. Transaction Details: Unsecured Loan amount disbursed into various tranches as per Statement of Account enclosed. |
| 2. | Amount Claimed to be in Default and The Date on Which the Default Occurred (Attach the Workings for Computation of Amount and Dates of Default in Tabular Form) | Total Outstanding Principal Amount is Principal 4,29,34,267/- (Rupees Four Crore Twenty Nine Lakhs Thirty Four Thousand and Two Hundred sixty Seven Only) |
On perusal of the Part IV of the Application, it is observed that the Applicant has claimed an amount of Rs.4,29,34,267/- as an unpaid financial debt. However, there is no 'date of default' mentioned by the Applicant in Part IV of the Application.
Basing on the aforesaid facts and documents, the Applicant has prayed for initiation of CIRP against the Respondent.
This Adjudicating Authority has issued notice to the Respondent on 17.08.2022. On perusal of the order sheet, it is seen that despite valid service of notice, no reply was filed by the Respondent, therefore, its right to file reply was closed on 20.09.2022. Further, due to no representation on behalf of the Respondent, it was proceeded ex-parte vide order dated 19.10.2022.
We have heard the Ld. Counsel for the Applicant and perused the documents placed on record. It is affirmed by the Applicant that it had disbursed the Loan to the respondent in the year 2013, which had made the part-payments till 2015. Since the transaction is old, and there is no specific date of default mentioned by the applicant in the Part IV of the Application, therefore, we would like to examine as to whether the present Application is filed within the period of Limitation?
The Applicant has annexed its Ledger Account depicting part payments received by it. From perusal of the same, it is observed that the Respondent made the last part-payment of Rs. 02,00,000/- on 27.08.2015. The copy of Ledger Account is reproduced below:
88 KARINA HEALTHCARE PVT. LTD. 688,TF,Basti Hazrat Nizamuddin, New Delhi-110014 Ashram New Delhi H N Reacon Pvt Ltd Ledger Account 1-Apr-2015 to 31-Mar-2021
| Date | Particulars | Vch Type | Vch No. | Debit | Page 1 Credit |
|---|---|---|---|---|---|
| 1-4-2015 | Cr Opening Balance | 4,31,44,267.00 | |||
| 24-8-2015 | Dr Bank Of Baroda (06640200000814) | Receipt | 7 | 4,10,000.00 | |
| 27-8-2015 | Cr Bank Of Baroda (06640200000814) | Payment | 9 | 2,00,000.00 | |
| Dr Closing Balance | 4,33,44,267.00 | 4,10,000.00 | |||
| 4,29,34,267.00 | |||||
| 4,33,44,267.00 | 4,33,44,267.00 |
On perusal of the aforesaid Ledger Account, we observe that the last Payment received by the Applicant was of Rs. 04,10,000/- on 24.08.2015 and the alleged loan was last disbursed on 27.08.2015 by paying Rs. 02,00,000/-. However, when we peruse the Bank Statement of the Applicant as annexed, to verify the receipt of the payment, we observe that the Payment of Rs. 04,10,000/- was received from one Harvansh Chawla and not from the Respondent Company. The scanned copy of the Bank Statement is reproduced below:
Statement of account for the period of 01-11-2014 to 01-11-2015
| DATE | PARTICULARS | CHG.NO. | WITHDRAWALS | DEPOSITS | BALANCE |
|---|---|---|---|---|---|
| Cheque Book Charges | |||||
| 15-07-15 | SERDEL-NEW | 210945 | 2,00,000.00 | 2,25,051.04 | |
| BY INST 210945 : MICR CLG (OTH BANK) | |||||
| 16-07-15 | HARVANSH | 30 | 2,00,000.00 | 25,051.04 | |
| HARVANSH CHAWLA | |||||
| 13-08-15 | SERDEL-NEW | 211029 | 95,000.00 | 1,20,051.04 | |
| BY INST 211029 : MICR CLG (OTH BANK) | |||||
| 14-08-15 | HARVANSH | 31 | 1,00,000.00 | 20,051.04 | |
| HARVANSH CHAWLA | |||||
| 24-08-15 | BY TRANSFER | 4,10,000.00 | 4,30,051.04 | ||
| BY TRANSFER | |||||
| 24-08-15 | HARVANSH | 32 | 4,10,000.00 | 20,051.04 | |
| HARVANSH CHAWLA | |||||
| 27-08-15 | BY CASH | 2,00,000.00 | 2,20,051.04 | ||
| BY CASH | |||||
| Page Total: | 34,05,342.00 | 28,05,000.00 | 2,20,051.04Cr | ||
In view of the above, we do not find the Ledger Account placed by the Applicant to be genuine and reliable.
We further observe that though the alleged loan is stated to have been granted by the applicant between 2013 to 2015, however the loan agreement placed on record is of 17.12.2021 i.e., of a date much after the date of disbursement. Accordingly, we would like to examine the Loan Agreement annexed by the Applicant.
LOAN AGREEMENT
This Loan Agreement (this "Agreement") is entered into as of 17.12.2021 by and between: M/s KARINA HEALTHCARE PRIVATE LIMITED a company duly registered under the Companies Act, 1956/2013 having its registered office at 688 TF, Basti Hazrat Nizamuddin, New Delhi-110014 having CIN- U85110DL2008PTC174229 through its director Mr. Shish Ram (hereinafter referred to as the "Lender" which expression shall unless repugnant to the context or meaning hereof, include its successors and permitted assigns)
AND
M/s H N REACON PRIVATE LIMITED, a company duly registered under the Companies Act, 1956/2013 having its registered office at H.N-106, Hloor (Near Giri Raj Hotel) Sarai Kale Khan, New Delhi-110013 having CIN-U70107DL2004PTC124645 through its director Mr. Saif Ali, (hereinafter referred to as the "Borrower" which expression shall, unless repugnant to the context or meaning hereof, include its successors and permitted assigns);
Borrower and Lender are individually referred to as a "Party" and collectively as the "Parties"
WHEREAS, the Borrower is engaged in the business of trading of medical equipment's and the Lender is engaged in the business of leasing of service apartments;
WHEREAS, Lender has given the Borrower interest free loan of Rs. 4,29,34,267/- in a periodic manner over a number of years on account of commercial expediency. The details of the same are mentioned in Annexure-I to this agreement;
WHEREAS, in the past the Lender has requested the Borrower to repay the loan, but the Borrower could not pay the same due to its financial incapacity and has further requested the Lender to reduce the said amount;
WHEREAS the Lender in view of the commercial principles after discussing and giving a deep thought to the aforesaid proposal has accepted the said proposal and have requested the Lender to repay the final negotiated amount in one-go;
WHEREAS the amount negotiated between the Lender and the Borrower is at the Rs. 3,00,00,000/- (Rupees Three Crores Only) as the full and final payment to be made by the Lender to the Borrower;
NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants hereinafter set forth, the parties hereto hereby agree as follows:
Article 1: PRINCIPAL AMOUNT OF THE LOAN
Subject to the terms and conditions hereof, the Lender, by its acceptance hereof, agrees to make the loan to the Borrower in the Principal Amount of Indian Rupees Three Crores Only only (INR 3,00,00,000/-).
Article 2 INTEREST
2.1The Borrower shall not pay any interest on amount to be repaid but states that the said amount shall be paid in one tranche only within one month of signing of the present agreement.
Article 3 REPAYMENT OF FULL AMOUNT
The Borrower shall repay the Loan in one go or on before 3.1.2022
Article 4 PAYMENTS
4.1All payments to the Lender hereunder shall be made in Indian Rupees on the due date for payment thereof to the Lender's account at such bank as the Lender may designate from time to time.
Article 5 EVENTS OF DEFAULT
When the Borrower fails to make any payment as per the scheduled timelines accepted by both of the parties the same shall constitute an Event of Default. In the event of such default, the Lender shall be at liberty to avail any or all the legal recourse available to it.
Article 6 EXPENSES
6.1The Borrower shall pay all stamp duty, registration and other taxes to which this Agreement or any judgment given in connection with this Agreement is or at any time may be subject and shall indemnify the Lender against any liabilities, costs, claims and expenses resulting from any failure to pay or any delay in paying any such duty or tax. The responsibility to register this Agreement shall be on the Borrower.
Article 7 GOVERNING LAW
On perusal of the terms and conditions of the aforesaid Loan Agreement, it is observed that the amount was never disbursed qua the said Agreement, rather only the allegedly disbursed amount was reduced and terms negotiated. In our view, the said Agreement is misconceived and cannot be construed as a Loan agreement.
The Applicant has also annexed the Balance Sheet for the Financial Year 2019-20 and 2020-21 of the Respondent, to establish that the Petition is filed within limitation. While perusing the Balance Sheet, we came across the disclosure made by the Respondent in its Balance Sheet for the year 2019-20 regarding the "Related Party relationships/transactions", which is reproduced below:
15.Related Party relationships / transactions warranting disclosures under Accounting Standard – 18 prescribed under section 133 of Companies Act, 2013 are as under: List of related parties with whom transactions have taken place during the year (excluding reimbursement):
Sl. No. Name of Related Party Nature of Relationship Nature of Transaction Volume of Transaction Closing Balance 1 Karina Healthcare Private Limited Company in which KMP/Relatives of KMP can exercise significant influence Unsecured Loan Received NIL (NIL) 4,29,34,267 /-(4,29,34,267/) 2 Mr.Rabinder Singh Key Management Personnel Reimbursement of Expenses 39,979/- (39,979) (No transaction during the Year) 39,979/- (NIL/-) Related party relations are identified by the management and relied upon by the auditors. Figures in bracket represents previous year's amount.
16.The Company has reclassified, regrouped and rearranged previous year figures, wherever considered necessary to conform to this year's classification.
17. EARNINGS PER SHARES
Pursuant to the Accounting Standard – 20, "Earning per Share", issued by the Institute of Chartered Accountants of India, the value of EPS is calculated as below:
Earnings Per Share Year Ended 31.03.2020 Year Ended 31.03.2019 Net Loss attributable to equity shareholders (₹) (12,200) (39,000) No. of Equity Shares Outstanding 21,600 21,600 Basic EPS (0.50) (1.81) In terms of our audit report of even date annexed
That on perusal of the aforesaid disclosure regarding the "Related Party relationships/transactions" at Sl. No.1 of the in the Balance Sheet of the Respondent, the Applicant Company i.e., Karina Healthcare Pvt. Ltd. is depicted as a "Related Party" to the Respondent i.e., HN Reacon Pvt. Ltd., with "Nature of Relationship" being described as "the KMP/relatives of KMP of the Applicant can exercise significant influence" on the Respondent Company. However, the applicant has not disclosed the said material fact either in its pleadings or during the hearing before this Adjudicating Authority.
Since the balance sheet under reference has been signed by the Directors of the Respondent namely, Mr. Rabinder Singh (DIN 06520376) and Saif Ali (DIN 07519715), we would like to examine whether, these Directors hold Directorship in any other Company from the information available in public domain at the MCA portal.
11/15/22, 4:25 PM Ministry Of Corporate Affairs - MCA Services Print
Ministry of Corporate Affairs User ID : YASH18LAW
View Director / Designated Partner Details DIN/DPIN : 06520376
Date: 15/11/2022 04:17:22 PM Name : RABINDER SINGH
DIN/LLPIN Name of the Company/ LLP Current designation of the Director/ Designated Partner Date of appointment at current designation Original date of appointment Date of cessation Company/ LLP Status Defaulting status U45201DLJ00APTC121125 OULIS MEDICARE PRIVATE LIMITED Director 29/10/2012 29/10/2012 - Active - U45201DLJ00APTC144831 OULIS FIDELITY HEALTHCARE PRIVATE LIMITED Director 08/02/2013 08/02/2013 - Under Liquidation - U6272001J00PPC156678 KARINA AIRLINES INTERNATIONAL LIMITED Director 30/09/2015 16/07/2015 - Active - U7010101J00APTC124645 HN REACON PRIVATE LIMITED Director 30/09/2015 05/05/2015 24/03/2022 Active - U7010101H2002PFC059865 HN PROPERTIES PRIVATE LIMITED Director 29/10/2012 29/10/2012 26/07/2015 Active - U7220001J00APTC190060 HP IT SOLUTIONS PRIVATE LIMITED Additional Director 10/01/2013 10/01/2013 - Strike Off - U7414104J2002PTC095964 K R CHAWLA CONSULTING PRIVATE LIMITED Director 15/01/2013 15/01/2013 26/07/2015 Active - U7419101J2000PLC106485 GOODWILL HOSPITAL AND RESEARCH CENTRE LIMITED Director 12/02/2013 12/02/2013 - Under Liquidation - U8511001J00APTC117616 M AND D HOSPITALS PRIVATE LIMITED Director 30/09/2015 03/05/2015 04/10/2017 Strike Off - U8511001J00APTC174229 KARINA HEALTHCARE PRIVATE LIMITED Director 30/09/2014 02/07/2014 12/09/2017 Active - 11/15/22, 4:27 PM Ministry Of Corporate Affairs - MCA Services Print Ministry of Corporate Affairs User ID : YASH18LAW
View Director / Designated Partner Details DIN/DPIN : 07519715
Date: 15/11/2022 04:19:56 PM Name : SAIF ALI
| CIN/LLFIN | Name of the Company/ LLP | Current designation of the Director/ Designated Partner | Date of appointment at current designation | Original date of appointment | Date of cessation | Company/ LLP Status | Defaulting status |
|---|---|---|---|---|---|---|---|
| 1J3479TDL2009PTC143564 | EDEN BIORECHNOLOGIK PVT LTD | Director | 30/09/2016 | 23/05/2016 | 21/12/2016 | Active | |
| 1J4528TDL2004PTC125325 | OJUS MEDICARE PRIVATE LIMITED | Director | 30/09/2016 | 24/05/2016 | Active | ||
| 2J4528TDL2006PTC144601 | OJUS FIDELITY HEALTHCARE PRIVATE LIMITED | Director | 30/09/2016 | 26/05/2016 | Under Liquidation | ||
| 1J4230TDL2007PLC166678 | KARINA AIRLINES INTERNATIONAL LIMITED | Director | 30/09/2016 | 30/05/2016 | Active | ||
| 1J7078TDL2004PTC124645 | HN REACON PRIVATE LIMITED | Director | 30/09/2016 | 28/05/2016 | 21/05/2022 | Active | |
| 1J7489TDL2009PLC106466 | GOODWILL HOSPITAL AND RESEARCH CENTRE LIMITED | Director | 30/09/2016 | 25/05/2016 | Under Liquidation | ||
| 1J4511DDL2003PTC117678 | M AND D HOSPITALS PRIVATE LIMITED | Director | 30/09/2016 | 20/05/2016 | 06/10/2017 | Strike Off | |
| 1J4511DDL2008PTC174229 | KARINA HEALTHCARE PRIVATE LIMITED | Director | 30/09/2016 | 27/05/2016 | 12/09/2017 | Active |
That from the DIN details available on the MCA portal as reproduced above, it is clear that Sh. Rabinder Singh (DIN: 06520376) was Director in the Applicant Company i.e., Karina Healthcare Private Limited from 02.07.2014 to 12.09.2017 besides being Director in the Respondent company from 05.08.2015 to 21.03.2022. Furthermore, Mr. Saif Ali (DIN: 07519715) was also Director in the Applicant Company i.e., Karina Healthcare Private Limited from 27.05.2016 to 12.09.2017, besides being Director in the Respondent company from 28.05.2016 to 21.03.2022.
We have already noted above in para 3 above that the unsecured loan was disbursed by the Applicant to the Respondent during the period from February 2013 to March 2013 and on 27.08.2015. Thus, it is observed that when the part of the loan was disbursed on 27.08.2015, Sh. Rabinder Singh was Director in both the Applicant as well as in the Respondent Company.
From the above, it can be inferred that Sh. Rabinder Singh (DIN: 06520376) was Director in and thus, having control over both the Applicant and the Respondent Company, when the alleged loan was disbursed and payments were being made. In our view, the Applicant has not approached this Tribunal with clean hands as the said fact should have been brought to the knowledge of this Bench.
Accordingly, this Bench conclude that:
The Bank Statement produced and relied by the Applicant is inconsistent with its Ledger Account;
The alleged debt was not disbursed qua the loan agreement dated 17.12.2021 annexed by the Applicant;
There is nothing on record pertaining to the disbursement period that the amount was disbursed as Loan;
Also, there is nothing on record to depict that the Applicant was eligible to grant loan to the Respondent in terms of Section 186 of Companies Act, 2013; and
The Applicant has concealed that Sh. Sh. Rabinder Singh (DIN: 06520376) was having control over both the Applicant and the Respondent Company during the period of transaction.
In view of the above, the Applicant has not been able to establish the existence of the debt beyond doubt. Hence, the Application is dismissed with a cost of Rs.3 Lakh to be deposited by the Applicant with the Prime Minister Relief's Fund, receipt of which shall be duly filed with this Tribunal within a period of 15 days.
A copy of this order be sent by the Court Officer to IBBI for their record.