Piramal Capital & Housing Finance Limited vs Arpan Maheshkumar Shah

Ashok Bhushan, J.

This Appeal has been filed against the order dated 21.04.2022 passed by the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench, Court No.5 dismissing I.A. No. 182 of 2022 filed by the Appellant praying for admission of its claim and disposing of I.A. No. 308 of 2022 filed by the Resolution Professional for adjudicating of the claim of the Appellant. Aggrieved by the order dated 21.04.2022, this Appeal has been filed. The brief facts of the case necessary to be noted for deciding this Appeal are:

Shri Ramji Srinivasan, learned senior counsel appearing for the Appellant challenging the impugned order contends that the Adjudicating Authority erred in rejecting the claim of the Appellant on a wrong premise that the loan of Rs.32.50 crore was discharged by the sister concern – ‘Rite Developers Pvt. Ltd.’ (RDPL), hence, no amount is due on the Corporate Debtor to be paid to the Appellant. It is submitted that the loan due and payable by the Corporate Debtor to the Appellant was never discharged and the plea taken by the Suspended Director of the Corporate Debtor as well as the Resolution Professional was not based on any cogent material. The Adjudicating Authority relied on the Transaction Audit Report dated 09.03.2022 which Transaction Audit Report had recorded conclusion that it is not possible to comment on the fact as to whether the loan of Appellant has been discharged. The Adjudicating Authority relied on the internal correspondence between the Corporate Debtor and its sister concern ‘RDPL’ which were self-serving letters prepared by same Promoters of both entities i.e. the Corporate Debtor and RDPL, which letters were not even marked to the Appellant. The Adjudicating Authority relied on unaudited draft Book of Accounts of the Corporate Debtor as on 31.03.2021 where the loan of the Appellant was mischievously not shown whereas the said loan was duly reflected in the Balance Sheets of the Corporate Debtor for the year 2018-19 and 2019-20. The conclusion drawn by the Adjudicating Authority that the amount laying in the account of DHFL were adjusted towards the loan to the Corporate Debtor were not based on any material and was perverse finding. The Corporate Debtor failed to prove that the loan given to it was discharged by any means, hence, the rejection of the claim of the Appellant is wholly unjustified and unsustainable. Learned counsel for the Appellant referred to the loan account of RDPL as maintained by the Appellant as well as the ledger account of the Corporate Debtor brought on record alongwith the Reply of the Resolution Professional. Learned counsel for the Appellant submits that the amount of Rs.38,51,98,750/-which is claimed to be adjusted by RDPL towards the loan of Corporate Debtor was in fact payment of EMI by RDPL and then further disbursement by Appellant to RDPL which is clearly apparent from the transaction entries in the loan account of RDPL.

Learned counsel appearing for the Respondent, Ms. Natasha Dhruman Shah refuting the submissions of learned counsel for the Appellant submits that the Resolution Professional has rightly not admitted the claim of the Appellant which from the documents placed by the Ex-Director of the Corporate Debtor was proved to be discharged by the sister concern- ‘RDPL’. Learned counsel for the Respondent has referred to the entry dated 19.11.2018 in the loan account of RDPL maintained by the Appellant. It is further submitted by learned counsel for the Respondent that there was collusion between the Appellant, Corporate Debtor and RDPL in the disbursement of loan. It is submitted that the Appellant has not ensured that the amount which was disbursed to the Corporate Debtor is utilized for the project for which the amount was sanctioned. The Corporate Debtor siphoned the amount and transferred substantial amount to the RDPL of about Rs.23 Crores which could not have been possible if an Escrow Account was insisted. It is submitted that disbursement of amount of Rs.9.50 Crore have been even after date of NPA. The amount of Rs.9.50 Crore which was disbursed in April, 2019 was allowed to be transferred in the account of Sameer Dedia, the Director of the Corporate Debtor and allied group of companies from which the amount was used to settle the claim against RDPL. Learned counsel for the Respondent further submits that the entire transaction was collusive transaction and application filed by the Resolution Professional in the CIRP against the DHFL for avoiding the transaction is still pending consideration. It is submitted that the Corporate Debtor vide letter dated 27.07.2020 requested the RDPL to assist them in repaying DHFL loan of Rs.32.20 Crore. Further reliance has been laid on letter dated 18.02.2021 issued by RDPL to the Corporate Debtor informing that the credit amount of Rs.38,51,98,790/- which is laying in the account of DHFL can be adjusted unconditionally towards the loan amount availed by the Corporate Debtor of Rs.32.50 Crore. By the letter details of the account and transaction dated 19.11.2018 was communicated. Learned counsel for the Resolution Professional submits that the Resolution Professional being unable to verify the claim of the Appellant had filed the I.A. 308 of 2022 before the Adjudicating Authority requesting the Adjudicating Authority to adjudicate the claim of the Appellant. The Adjudicating Authority has considered all the aspects of the matter and come to the conclusion that loan given to the Corporate Debtor was repaid by RDPL, hence, the claim of the Appellant could not be admitted.

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

From the pleadings of the parties and material on the record following facts are undisputed:

The Adjudicating Authority in its long order has noted contentions of the parties, date and events, the Balance Sheet for the year 2019-20 of the Corporate Debtor and the correspondence vide letter dated 27.07.2020 and 18.01.2021, as noted above, but the conclusions recorded by the Adjudicating Authority are contained in only three paras i.e. Paras 59, 60 and 61, which are to the following effect:

The Adjudicating Authority in the impugned order has placed reliance on following for coming to the conclusion that claim of the Appellant cannot be admitted.

We may first look into the internal correspondence between the Corporate Debtor and RDPL to find out as to whether from the said internal correspondence it can be concluded that loan disbursed to the Corporate Debtor by the Appellant stood discharged. The Adjudicating Authority has extracted both the letters in its order. By letter dated 27.07.2020, written by the Corporate Debtor to RDPL, request was made to assist the Corporate Debtor in repaying the DHFL loan. The letter makes following prayer:

The above letter was replied by the RDPL by its letter dated 18.02.2021. For completeness, we extract the letter dated 18.02.2021, which is to the following effect:

The letter dated 18.02.2021 which was written by RDPL intimated that their credit amount Rs.38,51,98,790/- is with DHFL which can be adjusted towards the loan amount availed by the Corporate Debtor. The letter refers to transaction dated 19.11.2018 which was NEFT transaction in the beneficiary DHFL account. The above letter dated 18.02.2021 cannot be read in any manner to discharge any loan of the Corporate Debtor which was owed to the Appellant. The letter at best refers to transaction dated 19.11.2018 by the RDPL in the account of DHFL. Any transaction made by the RDPL in account of DHFL on 19.11.2018 cannot ipso facto discharge loan liability of Corporate Debtor owed to the DHFL and there are no material brought on record to show that subsequent to letter dated 18.02.2021, actually the loan was discharged by remitting the amount of Rs.38,51,98,790/- in the loan account of the Corporate Debtor which was received by DHFL. For first time on 18.02.2021, the RDPL is making an offer to adjust the amount laying in the account of DHFL. By mere making an offer, there shall not be any adjustment of loan payable by Corporate Debtor to the Appellant. There has to be any transaction after 18.02.2021 to show that the loan of Corporate Debtor was actually discharged by making payment of Rs.38,51,98,790/-. It is further relevant to notice that apart from the above two letters dated 27.07.2020 and 18.02.2021 no other correspondence is even claimed by Corporate Debtor or RDPL for adjustment of the loan of the Corporate Debtor payable to the Appellant. The letter dated 18.02.2021 is not even forwarded to the Appellant.

We, thus, conclude that the internal correspondence between the Corporate Debtor and the RDPL who’s Promoters are same, does not lend support to their case that the loan payable by Corporate Debtor to the Appellant against disbursal of Rs.32.50 Crore stood discharged. The Adjudicating Authority, thus, erroneously relied on the said correspondence which is wholly irrelevant for proving any discharge of the loan amount.

Now we come to the second reason given by the Adjudicating Authority for accepting the case of the Corporate Debtor i.e. Books of account of the Corporate Debtor for the year 31.03.2021.

The Adjudicating Authority in the impugned order itself has extracted Statement of Account of the Corporate Debtor as on 31.03.2020 where under ‘Long Term Borrowing’, Term-Loan of DHFL of Rs.32.50 Crore is clearly mentioned and reflected. The Adjudicating Authority in Para 53 has referred to Balance Sheet of the year 31.03.2021. Para 53 of the order is as follows:

The above Balance Sheet has itself been referred to as ‘Unaudited Balance Sheet of the year’. When the Balance Sheet has not yet been audited, we fail to see that how importance can be attached to such Balance Sheet. Furthermore, in the Balance Sheet loan of Rs.32.50 Crore which loan was reflected earlier in the Balance Sheet has just been deleted whereas in the same Balance Sheet as on 31.03.2020, the loan of Rs.32.50 Crore has been reflected of DHFL. The Unaudited Balance Sheet as on 31.03.2021 although does not mention the loan to continue as on 31.03.2021 but there are no details in the Balance Sheet as to how the loan stood discharged. Corporate Debtor’s Balance Sheet as on 31.03.2021 which is unaudited and has not even show as to when it was submitted to the ROC, placing reliance by Adjudicating Authority on such Balance Sheet to accept the case of the Resolution Professional that the debt stood discharged is wholly inappropriate and unsustainable. In the Balance Sheet prepared by the Corporate Debtor, mere non-mention of loan as on 31.03.2021 does not prove discharge of the loan in any manner. We, thus, are of the view that both the reasons relied by the Adjudicating Authority for coming to the conclusion that the loan of the Appellant of Rs.32.50 Crore stood discharged does not prove in any manner the discharge of the loan. The Adjudicating Authority fell in error in rejecting the claim of the Appellant relying on the aforesaid reasons.

The transaction dated 19.11.2018 on which much reliance is placed by the RDPL and is claimed as basis for discharge of the loan of the Corporate Debtor also needs to be considered in detail. A copy of the account of the Appellant under which loan was sanctioned to RDPL has been annexed as part of Volume III of the appeal paper book. The aforesaid account is a loan account through which loan sanctioned to the RDPL. Total disbursement of the loan is Rs.758,51,98,790/-. In the column of disbursement, loan is claimed to be disbursed on seven dates. Last date of disbursement as reflected in the account is 19.11.2018 for an amount of Rs.38,51,98,790/-. The account further reflects that the due date of PEMI/EMI is Tenth of every month. Two entries of 19.11.2018 on which much reliance is placed are extracted as follows:

The perusal of the above entry indicate that PEMI was received from RDPL of Rs.38,51,98,790/- on 19.11.2018 (which is date when amount was cleared) and on the same date by another entry on 19.11.2018 loan disbursal is recorded of Rs.38,51,98,790/- to the Corporate Debtor. When we read the above entries, it is clear that the amount of Rs.38,51,98,790/- in the loan account, which was claimed to be laying in the credit which was offered by RDPL by letter dated 18.02.2021 is claimed as discharge of the debt. The amount which was paid by the RDPL is PEMI/EMI which was on the same date disbursed as loan to the Corporate Debtor again. When the amount is disbursed as loan amount to the Corporate Debtor, the transaction has completed and exhausted. The case taken by the Resolution Professional on the basis of said entry that amount discharged the loan of Corporate Debtor payable to the Appellant is baseless and a false plea.

Both the above entries on 19.11.2018 are more fully explained in the copies of Statement of Account of RDPL alongwith ledger filed by the Resolution Professional in Affidavit in Reply as Annexure R-10. When we look into Annexure R-10 filed alongwith the Reply, both the transactions dated 19.11.2018; payment of Rs.38,51,98,790/- paid to DHFL and further received from DHFL is reflected in the account. We extract entry dated 19.11.2018 as contained in Annexure R-10 which is to the following effect:

The above part of the account of RDPL clearly indicate that payment of Rs.38,51,98,790/- was made from the IDBI Bank Account of the RDPL to the DHFL Bank and on the same day another entry indicate that the same amount was received from DHFL Bank. Thus, the payment of PEMI/EMI was made by RDPL to DHFL and on the same day they received the same amount in other account as payment from DHFL Bank, which clearly indicates that the amount of Rs.38,51,98,790/- was received in the Bank Account of RDPL and is not laying in credit with the DHFL which can be adjusted as referred to in the letter dated 18.02.2021. The above Statement of Accounts which Statement is filed by the Respondent themselves prove that the amount of Rs.38,51,98,790/- is the amount paid by the RDPL to DHFL and same amount was received back as loan amount and the transactions was complete and exhausted and said amount cannot be said to be available to the RDPL to discharge the debt of the Corporate Debtor being payable by DHFL to Corporate Debtor.

Learned counsel for the Respondent in support of her submission that entire transaction between the Appellant, Corporate Debtor and RDPL was collusive, hence, the claim was rightly not admitted, has placed reliance on the judgment of Hon’ble Supreme Court in “(2021) 3 SCC 475, Phoenix ARC Private Limited vs. Spade Financial Services Limited & Ors.”. Reliance has been placed on Para 48 of the judgment where following has been laid down:-

The Hon’ble Supreme Court in the above case has elaborated the ‘sham transactions’. It was held that the transaction which is sham or collusive would only create an illusion that money has been disbursed to a borrower with the object of receiving consideration in the form of time value of money, when in fact the parties have entered into the transaction with a different or an ulterior motive. In the present case, the claim of the Appellant has not been admitted on the ground that the loan of the Appellant to the Corporate Debtor stood discharged by RDPL. There is no finding in the impugned order terming the transaction as a collusive transaction. Hence, the contention of the Respondent, in the above view, is rejected. Furthermore, there is no denial by Corporate Debtor of disbursal of loan of Rs.32.50 Crore.

We, thus, are satisfied that there are no material to indicate that the loan which was disbursed by the DHFL to the Corporate Debtor was discharged at any point of time. The Adjudicating Authority committed error in refusing to admit the claim of the Appellant. Resolution Professional also did not correctly and properly look into the materials placed before it by the Appellant as well as the Ex-Director of the Corporate Debtor and erred in not verifying the claim of the Appellant. In view of the foregoing discussion, we are satisfied that order passed by the Adjudicating Authority is unsustainable and deserved to be set aside. We allow the Appeal and set aside the impugned order dated 21.04.2022. Allow the I.A. No. 182 of 2022 filed by the Appellant and direct the Resolution Professional to admit the claim of the Appellant and reconstitute the CoC accordingly. The parties shall bear their own cost.