Advantagesai Projects Private Ltd Vs Akshay Techforge Pvt Ltd (NCLAT Delhi)
The National Company Law Appellate Tribunal (NCLAT) heard an appeal against the order of the National Company Law Tribunal (NCLT), Mumbai, dated 9 February 2023, which had dismissed an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC). The NCLT had held that the transaction between the parties was one of sale and purchase of immovable property and did not constitute a financial debt.
According to the appellant, the respondent had defaulted on a loan obtained from the State Bank of India and required funds to settle the One Time Settlement (OTS) amount. The appellant had already advanced ₹48,36,540 to the respondent up to 12 November 2018. Thereafter, the parties executed an Agreement to Sale dated 9 April 2019, under which the respondent acknowledged the earlier disbursement and the appellant agreed to provide an additional ₹1 crore. The appellant directly remitted the amount to the respondent’s SBI OTS account on 12 April 2019. The respondent was required to repay the amount by 31 March 2020, failing which it agreed to execute a sale deed in favour of the appellant in respect of specified plots of land. The agreement also permitted the respondent to mortgage the property to a financial institution for the purpose of repaying the appellant. After the respondent failed to repay the dues, another agreement dated 1 April 2020 extended the repayment period up to 31 March 2021 while retaining similar terms. On 9 April 2020, the parties executed a Memorandum of Understanding (MoU) under which the respondent agreed to pay interest at 18% per annum on a monthly compounding basis or 30% of profit, whichever was higher. The appellant claimed that the respondent ultimately defaulted, resulting in an outstanding amount of ₹2,39,17,469.66, and consequently filed an application under Section 7 of the IBC.
