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Judgment
Ashok Bhushan, J.
This Appeal by a suspended Director of the Corporate Debtor has been filed challenging the order dated 09.11.2023 passed by NCLT, Division Bench, Court No.II, Kolkata, by which order Section 7 Application filed by Financial Creditor - Emami Reality Ltd. was admitted.
Brief facts of the case giving rise to the Appeal are:
The Corporate Debtor – Fort Projects Private Limited is a Company engaged in development of real estate projects. An Agreement dated 15.02.2016 was entered between the Corporate Debtor and the Financial Creditor and some other Group Companies of Kathotia Group. Under the Agreement Financial Creditor agreed to extend Rs.35 Crores to the Corporate Debtor. Further, under the Loan Agreement, the Financial Creditor had agreed to provide financial assistance of Rs.70 crores, out of which Rs.35 crores was to be given to the Corporate Debtor and Rs.35 Crores to one Gagan Dealcom Private Limited. In pursuance of the Agreement dated 15.02.2016, an amount of Rs.34.55 Crores was disbursed to the Corporate Debtor.
The Financial Creditor sent several communications to the Corporate Debtor for repayment of the amount. On behalf of the Corporate Debtor several letters dated 25.08.2018, 27.08.2018, 12.09.2018 and 23.11.2018 was written confirming and assuring that payment will be made in short period of time.
An Agreement dated 26.02.2020 was again entered into between the Financial Creditor and the Corporate Debtor, where the Corporate Debtor acknowledged that total amount due and payable by Corporate Debtor to the Financial Creditor as on 19.02.2020 is Rs.64,04,90,697/-. In the Agreement, old Loan Agreement dated 15.02.2016 was also referred to. The Agreement contemplated payment of entire amount within six months.
The case of Financial Creditor is that in pursuance of Loan Agreement dated 26.02.2020, no payment was made and on request of the Corporate Debtor, time for payment was extended till 15.12.2021. After expiry of 15.12.2021, when no payment was made, a letter dated 13.01.2022 was issued by the Financial Creditor to the Corporate Debtor stating that time extended for repayment upto 15.12.2021 has expired and no payment has been made by the Corporate Debtor. The Corporate Debtor was called upon to make payment of Rs.82,61,90,657/- along with interest @ 15% per annum from 16.12.2021 within seven days.
No payment having been made, the Financial Creditor filed an Application under Section 7, claiming total amount of Rs.91,74,27,304/-, which included principal and interest. The Application under Section 7 was filed on 30.11.2022. An affidavit of reply was filed on 23.02.2022 by the Corporate Debtor, signed by the Appellant himself. Rejoinder to the reply was also filed by the Financial Creditor.
By the impugned order dated 09.11.2023, the Adjudicating Authority admitted the Section 7 Application. Aggrieved by which order, this Appeal has been filed.
We have heard Shri Krishnendu Datta, learned Senior Counsel for the Appellant and Shri Ratnanko Banerjee, learned Senior Counsel for Respondent.
The learned Senior Counsel for the Appellant submits that as per Agreement dated 26.02.2020 entered between the parties, the amount was to be paid within six months. Amount having not been paid within six months, the date of default in payment was 25.08.2020, which date of default being under 10A period, the Application was barred by Section 10A of the Code and Adjudicating Authority committed error in admitting Section 7 Application. It is submitted that the case of the Financial Creditor that on request of the Corporate Debtor, time for repayment was extended till 15.12.2021, is incorrect. No documents was filed by Financial Creditor to prove that time for repayment was extended till 15.12.2021. It is submitted that arguments on the basis of Section 10A was advanced before the Adjudicating Authority on behalf of the Corporate Debtor.
Shri Ratnanko Banerjee, learned Senior Counsel appearing for the Respondent, refuting the submissions of learned Counsel for the Appellant submits that Corporate Debtor in its reply to Section 7 Application had taken the stand that Agreement dated 26.02.2020 although was signed, but was never implemented. In view of the stand taken by the Corporate Debtor in the reply that Agreement was never implemented, no plea in respect of Section 10A was advanced before the Adjudicating Authority and even during oral submissions, no submission on Section 10A was advanced. It is submitted that Financial Creditor has filed written submissions, which indicates that no submission with regard to Section 10A was adverted to. It is submitted that the Corporate Debtor had taken financial facilities as per Agreement dated 15.02.2016 and an amount of Rs.34.55 Crores was disbursed, which inspite of several commitments and acknowledgement by the Corporate Debtor, was never repaid. An Agreement was entered between the parties on 26.02.2020, where the Corporate Debtor acknowledged its liability of payment of Rs. Rs.64,04,90,697/-. Inspite of Agreement dated 26.02.2020, the Corporate Debtor did not make the payment and on his request, time for repayment was extended till 15.12.2021. After 15.12.2021, when no payment came, letter dated 13.01.2022 was issued by the Financial Creditor, which clearly mentioned about extension of time for repayment till 15.12.2021. The said letter was not replied by the Corporate Debtor. In the Application filed under Section 7, letter dated 13.01.2022 was very much included, but in this Appeal filed by the Suspended Director of the Corporate Debtor, the said letter has been deliberately not brought on the record. It is submitted that Appellant has taken contradictory and false plea before the Adjudicating Authority and the Appellant has not come with clean hands in this Appeal. It is further submitted that there being acknowledgement of debt of Rs.64,04,90,697/- and Agreement dated 26.02.2020 was entered and default having been committed and acknowledged by the Corporate Debtor, it is not open to the Appellant to contend that the Application is barred by Section 10A.
We have considered the submissions of learned Counsel for the parties and have perused the record.
The Agreement dated 15.02.2016, the one filed along with Section 7 Application has been brought on the record, which contemplated payment of Rs.35 crores to the Corporate Debtor. The Agreement refers to Rs.70 Crores as loan amount, out of which Rs.35 Crores was to advance to Corporate Debtor, who was referred as a Borrower No.1. In pursuance of the Agreement dated 15.02.2016, an amount of Rs.34.55 Crores was disbursed to the Corporate Debtor. The Financial Creditor along with Section 7 Application filed Bank statement and the Adjudicating Authority has returned a finding that disbursement of Rs.34.55 Crores was made by the Financial Creditor. Along with Section 7 Application, the Financial Creditor has also filed the correspondence between the parties, which indicate that Corporate Debtor acknowledged the liability and assured to make payment. It is sufficient to notice the email dated 23.11.2018, sent on behalf of the Corporate Debtor by the Appellant to the Financial Creditor, which is as follows:
“From: Vivek Kathotia [mailto:vivekkathotia@gmail.com Sent: 23 November 2018 22:30 To: RS Agarwal <rsagarwal@emamigroup.com> Subject: Loan Respected RS Uncle, Sadar Pranam With reference to the telephonic talk we had in the morning, I reiterate that the Principal Loan Amount of Fort Projects shall be cleared within 15th to 31st December, 2019. I acknowledge the Accommodation provided by you and shall remain ever obliged. By the grace of God please remain hale and hearty.”
No payments were made by the Corporate Debtor inspite of acknowledgement. An agreement dated 26.02.2020 again entered between the parties, which included the Financial Creditor and the Corporate Debtor. In the Agreement there is an acknowledgment of sanction of advance of Rs.35 Crores and payable dues as on 19.02.2020 as Rs.64,04,90,697/-. In paragraphs (G) and (H), following are captured:
“G) For the purpose of its business, the Kathotia Group had approached the Lender to lend and advance an aggregate sum of Rs.35,00,00,000/- (Rupees seventy crores) only and as on 19th February, 2020 a total sum of Rs.64,04,90,697/- (Rupees sixty four crore four lacs ninety thousand six hundred and ninety seven) only is due and payable by the borrower to the Lender (hereinafter referred to as the TOTAL INDEBTEDNES)
H) The Borrower and the Kathotia Group has assured and covenanted with the Lender that the said total indebtedness shall be repaid within a period of six months from the date of execution of this Agreement (hereinafter referred to as the REPAYMENT DATE) and time for repayment is and shall always be treated as the essence of the contract.”
In the Definitions Clause of the Agreement, Loan Agreement dated 15.02.2016 has also been referred in part (vii) and indebtedness is also captured in part (viii), which are as follows:
“vii) EMAMI LOAN AGREEMENT shall mean the Agreement dated 15th February 2016 whereby the Lender had agreed to lend and advance various amounts to the Borrower in terms of the said Emami Loan Agreement.
viii) TOTAL INDEBTEDNESS shall mean a sum of Rs.64,04,90,697/- (Rupees sixty four crores four lacs ninety thousand six hundred and ninety seven only) payable by the Borrower to the Lender calculated upto 19th February 2020 and shall include any further interest which may become payable until such time the said total indebtedness is fully paid.”
Further, under paragraph-3 with the heading ‘Acknowledgement by the Borrower and Kathotia Group’, in paragraphs 3.1 and 3.2, following has been noted:
“3.1At or before the execution of this Agreement the accounts in respect of the said Loan have been gone into and settled and consequent to such settlement the total amount due and payable by the Borrower to the Lender as on 19th day of February 2020 (hereinafter referred to as the EFFECTIVE DATE) is Rs.64,04,90,697/- (Rupees sixty four crores four lacs ninety thousand six hundred and ninety seven only) (hereinafter referred to as the TOTAL INDEBTEDNESS)
3.2The Borrower, Guarantor and the Kathotia Group and each one of them hereby assure and covenant not to challenge or dispute the said total indebtedness and hereby further agree and acknowledge that they are liable to make payment of the said total indebtedness together with interest and other amounts which may become payable to the Lender”
Paragraph 5.1 mentions about the liability to pay interest on the Total Indebtedness @ 15% per annum. After the aforesaid Agreement dated 26.02.2020, when no repayment was made, a letter dated 13.01.2022 was sent by the Financial Creditor stating that time for payment was extended till 15.12.2021, but when no payment has been made, a demand was made for payment of Rs.82,61,90,657/-. In Section 7 Application, date of default mentioned by the Financial Creditor is 15.12.2021. In Part-IV , due amount claimed to be in default and date on which default occurred has been mentioned. In Part-IV, Item No.2, following has been mentioned:
| “2 | Amount claimed to be in default and the date on | Total amount of debt due is Rs.91,74,27,304,00/- (Rupees Ninety One |
| which the default occurred. (Attached the working for computation of amount and days of default in tabular Form) | Crores Seventy Four Lacs Twenty Seven Thousand Three Hundred Four only). [Principal Rs.82,61,90,657.00 as on 15th December, 2021 + interest Rs.9,12,36,647.00 @ 15% p.a. calculated from 16th December, 2021 to 31st August, 2022] is in default and is due and payable. Financial Creditor is also entitled to a further interest @ 15% per annum till the date of repayment. A copy of Statement of Accounts of the financial creditor is annexed hereto and marked as Annexure "G" The date of default is 15th December, 2021.” |
In Part-IV, after referring to the Agreement dated 15.02.2016 between the parties, the Agreement dated 26.02.2020 was mentioned and the acknowledgement of Rs.64,04,90,697/- also finds place as well as details of letter dated 13.01.2022. It is useful to extract relevant statement in Part-V Item-2, which is as follows:
“2 Under the said agreement dated 26th February, 2020 the Corporate Debtor had agreed to re-pay the sum of Rs.64,04,90,697/- (Rupees Sixty four Crores Four Lacs Ninety Thousand Six Hundred Ninety Seven only) along withinterest @15% p.a. to the Financial Creditor within a period of 6 months. It is stated that after the expiry of the period of 6 months, the Corporate Debtor had sought time till 15th December, 2021 to repay the said loan. The Financial Creditor upon such request agreed to extend the time to repay the loan till 15th December, 2021. However, despite the assurances and promises to repay the loan, no payment was made by the Corporate Debtor to the Financial Creditor. The course of conduct between the parties and as evident from the letter dated 13th January, 2022, that the aforesaid loan in terms of the agreement dated 26th February, 2020 became repayable on demand by the Financial Creditor on and from 15th December, 2021. Therefore, in terms of the agreement dated 26th February, 2020, a sum of Rs.82,61,90,657/- (Rupees Eighty Two Crores Sixty One Lacs Ninety Thousand Six Hundred Fifty Seven only) had become due and payable by the Corporate Debtor to the Financial Creditor as on 15th December, 2021 towards principal. The Financial Creditor issued a letter dated 13th January, 2022 to the Corporate Debtor, calling upon the Corporate Debtor to make payment of a sum of Rs.82,61,90,657/-(Rupees Eighty Two Crores Sixty One Lacs Ninety Thousand Six Hundred Fifty Seven only) @15% p.a. together with interest on and from 16th December, 2021, within a period of 7 days from the date of receipt of the notice. The said letter dated 13th January, 2022 was at first sent through post, however the same was returned with the comment "Deposit for verification". Thereafter, the said letter dated 13th January, 2022 was forwarded by an email dated 21st February, 2022 by the Financial Creditor to the Corporate Debtor. A copy of the letter dated 13th January, 2022 along with the email dated 21st February, 2022 is annexed hereto and marked as ANNEXURE "0". Despite receipt of the aforementioned letter dated 13th January, 2022, neither any reply nor any payments have been made by the Corporate Debtor to the Financial Creditor. In such circumstances total amount of debt due is Rs.91,74,27,304.00/- (Rupees Ninety One Crores Seventy Four Lacs Twenty Seven Thousand Three Hundred Four only). [Principal Rs.82,61,90,675.00 as on 15th December, 2021 + Interest Rs.9,12,36,647.00 @ 15% p.a. calculated from 16th December, 2021 to 31st August, 2022] is in default and is due and payable. Financial Creditor is also entitled to a further interest @ 15% per annum till the date of repayment.”
On behalf of Corporate Debtor, a detailed affidavit in reply, signed by the Appellant himself was filed before the Adjudicating Authority. It is useful to notice the pleadings in the said reply. Execution of the Agreement dated 26.02.2020 was not denied. However, it was pleaded that Agreement, although entered, but was never implemented between the parties. It is useful to notice pleadings of Corporate Debtor in paragraph 14, 19, 20 and 23, which are as follows:
“14.It is denied and disputed that the agreement dated 26th February, 2020 was entered into in furtherance of the agreement dated 26th February, 2020 as wrongfully alleged or at all. The agreement dated 26th February, 2020 was never acted upon and was not be acted upon and implemented between the parties.
19.It is respectfully submitted that the agreement 20th February, 2020 though signed was never acted upon between the parties. Inasmuch as further discussions and draft agreements continued to be prepared between the parties. It is denied and disputed that after expiry of period of six months, the Corporate Debtor sought time till 15th December, 2021 to repay the said loan, as alleged or at all.
20.There is no such document wherefrom it would be evident that the Corporate Debtor had acknowledged its liability in terms of the agreement dated 26th February, 2020 or that the time to repay the period of loan was extended till 15th December, 2021. The statement as given in annexure “G” is contradictory to the list of dates as given at page 4 and it contradictory to the amount claimed in Column II of Part-I as specified in particulars of financial debt. The statement of account is absolutely false and bogus and was never accepted by the corporate debtor. It is emphatically denied and disputed that the date of default is 15th December, 2021.
23.The agreement dated 26th February, 2020 was entered into at the request of Radheshyam Agarwal of Emami Group who had cordial relationship with Vivek Kathotia was never acted upon and was not final and binding documents between the parties. The terms and conditions of the said agreement dated 26th February, 2020 were never acted upon and not to be acted upon between the parties. In fact, the said document was merely an eye wash and to meet the Reserve Bank of India compliances and the entire transaction between the parties was for development of properties. The entire claim of the financial creditor is bogus, false and incorrect and question of the corporate debtor being liable to pay a sum of Rs.91,74,27,304/-comprising of Rs.82,61,90,657/- as principal and interest of Rs.9,12,56,647/- calculated from 16th December, 2021 to 31st August, 2022 is wrongful, baseless and the corporate debtor cannot be made liable to pay the same and never be treated to be in default. Save as aforesaid all allegations made therein are denied and disputed.”
In support of submission under Section 10A, it is contended by the Appellant that as per Agreement dated 26.02.2020, the amount was to be repaid within six months, i.e. upto 25.08.2020, hence, the default occurred on 25.08.2020, which is covered by Section 10A period, the Application under Section 7 was not maintainable. The learned Senior Counsel for the Appellant has relied on judgment of the Hon’ble Supreme Court in Ramesh Kymal vs. Siemens Gamesa Renewable Power Pvt. Ltd. – (2021) 3 SCC 224. The Hon’ble Supreme Court in the said judgment has held that in view of Section 10A, no Application shall ever be filed when default has occurred after 25th March, 2020. In paragraph 27 of the judgment, following has been held:
“27.Adopting the construction which has been suggested by the appellant would defeat the object and intent underlying the insertion of Section 10-A. The onset of the Covid-19 Pandemic is a cataclysmic event which has serious repercussions on the financial health of corporate enterprises. The Ordinance and the Amending Act enacted by Parliament, adopt 25-3-2020 as the cut-off date. The proviso to Section 10-A stipulates that “no application shall ever be filed” for the initiation of the CIRP “for the said default occurring during the said period”. The expression “shall ever be filed” is a clear indicator that the intent of the legislature is to bar the institution of any application for the commencement of the CIRP in respect of a default which has occurred on or after 25-3-2020 for a period of six months, extendable up to one year as notified. The Explanation which has been introduced to remove doubts places the matter beyond doubt by clarifying that the statutory provision shall not apply to any default before 25-3-2020.”
There can be no dispute to the proposition laid down by the Hon’ble Supreme Court that no Application can be filed for default committed during 10A period. To counter the submission of the Appellant on 10A, the learned Senior Counsel for the Respondent has advanced two submissions. Firstly, it is submitted that the Corporate Debtor having pleaded in the reply that Agreement dated 26.02.2020 was never implemented although signed between the parties, hence, it is not open for the Appellant now to contend that default under the Agreement dated 26.02.2020 occurred on 25.08.2020. It is submitted that due to the above pleading in the reply by the Corporate Debtor, no submission was advanced on 10A since the submission on 10A would have been contradictory to the pleadings of the Corporate Debtor itself. Secondly, it is submitted that on the request of Corporate Debtor, the time for repayment was extended till 15.12.2021, which is a date of default as has been pleaded in Section 7 Application. Further, the letter dated 13.01.2022 sent by Financial Creditor to the Corporate Debtor has stated about the extension of time till 15.12.2021 and the said letter was neither replied by the Corporate Debtor nor even filed along with the Appeal. The Corporate Debtor intended to conceal the letter dated 13.01.2022 from the Court, which had captured the extension of repayment till 15.12.2021.
We have already noticed the pleadings made by the Corporate Debtor in its reply as extracted above. The Corporate Debtor has come up with a case that although Agreement dated 26.02.2020 was signed, but it was never acted upon. When the case of the Corporate Debtor is that the Agreement dated 26.02.2020 was never implemented, we fail to see that how the Corporate Debtor is now contending that default as per Agreement dated 26.02.2020 occurred on 25.08.2020. The Corporate Debtor on the one hand pleads that Agreement dated 26.02.2020 was only a paper transaction and though was signed, but never acted upon, he cannot rely on the date of default in the Agreement for the purpose of Section 10A.
Apart from above, there are two reasons due to which we are not persuaded to accept the submission of the Appellant that Application was barred by 10A. Firstly, the Agreement dated 15.02.2016 was executed between the parties, which is not disputed. Under the Agreement dated 15.02.2016 an amount of Rs.34.55 Crores was disbursed. The Adjudicating Authority has returned a finding, referring to the Bank statement that the said amount was disbursed. In paragraph 10.1, following finding has been returned by the Adjudicating Authority:
“10.1On perusal of documents submitted by the applicant and after hearing the Ld. Counsel for the applicant as well the respondents we find that pursuant to the Agreement made on 15/02/2016 a sum of Rs.34.55 Crore has been advanced and there can be no dispute on the fact of payment as otherwise there is no reason for agreement dated 26/02/2020. The Bank Statements attached to the application also demonstrate payment to the Corporate Debtor by the Financial though the respondents made an attempt to brush it aside as mere entries entered between Emami Realty Limited and Emami Capital Market Limited through Fort Projects Private Limited, the Corporate Debtor.”
Along with Section 7 Application, the Financial Creditor has filed correspondence between the parties, which clearly finds mention in Annexure-J, which correspondence includes various acknowledgement given by the Corporate Debtor accepting the liability to make the payment. Furthermore, in the Agreement, which was entered between the parties on 26.02.2020, there is clear acknowledgement on behalf of the Corporate Debtor that an amount of Rs.64,04,90,697/- is due as on 19.02.2020. the amount of Rs.64,04,90,697/- was due in pursuance of sanction and disbursement of loan amount of Rs.34.55 Crores by the Financial Creditor to the Corporate Debtor. The Loan Agreement also finds mention in the Agreement dated 26.02.2020 in Clause-1 (vii) as extracted above. There is clear acknowledgement by the Corporate Debtor that Rs.64,04,90,697/- is amount due as on 19.02.2020, i.e., the prior to commencement of 10A period. Section 10A period begun on 25.03.2020 and when default has been committed by the Corporate Debtor prior to 10A period, the submission of the Appellant that Application is barred by 10A period cannot be accepted. There being clear acknowledgement of default of Rs.64,04,90,697/-, which is prior to commencement of 10A period, as accepted in the Agreement dated 26.02.2020, it is not open for the Appellant to contend that default occurred only on 25.08.2020, hence, the Application is barred by Section 10A. It is well settled that when default by Corporate Debtor has occurred prior to 10A period, Application shall not be barred.
Coming to the second submission, the Financial Creditor has contended that date of default is 15.12.2021, since on the request made by the Corporate Debtor, the time for repayment was extended till 15.12.2021. The learned Counsel for the Financial Creditor has relied on the letter dated 13.01.2022, which letter was filed along with Section 7 Application as Annexure-O, but the said letter has not been brough on record by the Appellant in the Appeal. The said letter has been placed on record by the Financial Creditor along with the affidavit as permitted by our order dated 08.12.2023. The letter dated 13.01.2022, which was written by the Financial Creditor to the Corporate Debtor is as follows:
“As you are aware, on or about 15th February, 2016, a Loan Agreement was inter alia entered into between yourselves and ourselves and others, whereby and where under, we had lent and advanced from time to time an aggregate sum of Rs.34,55,00,000/- to you. The said loan was repayable within nine months with interest to be agreed upon.
However you failed and neglected to repay the said sum lent and advanced to you and/ or part thereof and/or any interest thereon. In view of such default in repayment on your part, you by various correspondences requested for some time and acknowledged your liability to repay the said sum of Rs.34.55 crores with interest accrued thereon. It was also agreed that from the dated 17th February, 2016 to 31st March, 2018 interest would be charged @ 18% and from 1st April, 2018 until payment interest would be charged @15%.
Since payment of our dues could not made by you, in or around early 2020 you agreed and acknowledged that the unpaid interest and unpaid principal sum aggregating to Rs.64,04,90,697/- shall be treated as the principal and to be considered as financial accommodation to finance the company. This is duly evidenced by the agreement dated 26th February, 2020 entered into between yourselves and ourselves and Sri Vivek Kathotia and Sri Varun kathotia as guarantors as well as several other companies who all stood as guarantors and gave their certain properties towards security against such loan. It was recorded in the said Agreement that a sum of Rs.64,04,90,697/- as on 19th February, 2020 was due and payable by you to us which would be repaid by you within a period of six months thereby acknowledging such liability with promise to pay.
By the said Agreement it has been inter alia further agreed and acknowledged by you that the said sum of Rs.64,04,90,697/- would carry interest @15% per annum and that the said interest would be payable on a quarterly basis and that in case of default of payment of interest the unpaid interest amount would be added to the principal and shall form part of the principal sum.
On your requests for extension of time to repay the said loan, we had agreed to extend the time from repayment of such loan till 15th December, 2021. We state that inspite of your promise and assurance to repay the said loan, you have failed to pay the same.
We state that you have failed and neglected to pay the said sum of Rs.64,04,90,697/- and/or any interest thereon. In the circumstances a sum of Rs.82,61,90,657/- has become due and payable by you to us on 15th December, 2021, towards principal in terms of the loan agreement particulars whereof are given in a chart enclosed herewith.
We therefore hereby call upon you to make payments of the said sum of Rs.82,61,90,657/- together with further interest on the said sum at the rate of 15% per annum on and from 16th December, 2021, within 7 days from the date of receipt of this notice failing which we shall take appropriate legal action against you including proceeding against the securities held by us holding you liable for all costs and consequences arising therefrom.
We are sending this notice to all the guarantors also for their information and action.
This is without prejudice to our rights and contentions.”
It is relevant to notice that in the letter dated 13.01.2022, there was clear statement that request made for extension of time to repay the loan was agreed and extended till 15.12.2021. The receipt of letter dated 13.01.2022 has not been denied by the Corporate Debtor. The Application under Section 7 was filed in November 2022 by the Financial Creditor. If the time was not extended upto 15.12.2021 by the Financial Creditor, it was but natural that Corporate Debtor would object to the letter dated 13.01.2022 stating that time has never been extended. The letter dated 13.01.2022 reflects the course of event as happened at the relevant time, when there was no proceedings between the parties. There has to be very strong circumstance to refute the course of event as noticed in the letter dated 13.01.2022. The fact that letter dated 13.01.2022 has not been brought on the record in the Appeal by the Corporate Debtor also supports the submission of the Financial Creditor that letter dated 13.01.2022, records the state of affairs as it existed at the relevant time. We, thus, are of the view that Adjudicating Authority did not commit any error in accepting the date of default as 15.12.2021 as pleaded in Section 7 Application.
We have also noticed that in the reply, which was filed by the Corporate Debtor in Section 7 Application, the Corporate Debtor even sought to contend that Agreement dated 15.02.2016 was not to be acted upon. It was further pleaded that Agreement dated 15.02.2016 was a joint venture Agreement. In this regard, we may notice averments made in the reply affidavit filed by the Appellant in Section 7 Application, where the Corporate Debtor has pleaded that Agreement dated 15.02.2016 was a joint venture Agreement and further it was the paper transaction. In paragraph 7, (p) and (q), following have been pleaded:
“(p)Thus, the said agreement dated 15.02.2016 was not acted upon and/or implemented at the behest of the financial creditor. In this context, the corporate debtor craves leave to refer and rely upon various emails exchanged between the parties, copies whereof are collectively annexed hereto and marked with letter “R2”.
(q)From the tenor and nature of the said agreement, it would be crystal clear that the said agreement dated 15th February, 2016 is a joint venture agreement for development of said land but because of non-co-operation on the part of the financial creditor that the property could not be developed.”
The Adjudicating Authority has returned a finding that Agreement dated 15.02.2016 was not a joint venture Agreement and further the amount of Rs.34.55 Crores was disbursed. The Corporate Debtor as noted above, on one hand is pleading that Agreement dated 15.02.2016 was entered and on other hand submits that the said Agreement was not to be implemented or acted upon. As noted above, it was further pleaded by the Appellant that Agreement dated 26.02.2020 was also not to be acted upon and it was only a paper document. In that situation, there was no occasion for the Appellant to advance a submission that default was committed on 25.08.2020 and the Application is barred by 10A. The endeavour of the Corporate Debtor is to somehow relieve itself from the liabilities, which could not be discharged in pursuance of the Loan Agreement dated 15.02.2016.
We, thus, are fully satisfied that the Application filed by the Financial Creditor, cannot be thrown on the ground of Section 10A. The Adjudicating Authority has rightly admitted Section 7 Application. There is no merit in the Appeal. The Appeal is dismissed.