Subhash Chander Chauhan Vs Kaliber Associates Private Limited (NCLAT Delhi)
NCLAT Delhi held that balance sheet entries are reliable evidence of existence of financial debt. Accordingly, since debt and default against Corporate Debtor established, admission of application u/s. 7 of IBC justified.
Facts- This Appeal is being filed under Section 61 of the Insolvency and Bankruptcy Code, 2016 against the Impugned Order dated 14.02.2025 by National Company Law Tribunal. The Appellant is Suspended Director of Corporate Debtor (CD) (West Star Constructions Pvt. Ltd.) and was admitted into insolvency on 06.03.2024 u/s.7 of the Code. This was an ex-parte order and against that an Appeal was filed before this Tribunal and vide order dated 23.09.2024 this Tribunal remanded the matter back to NCLT to determine and construe the real nature of the transaction and set aside the initiation of the CIRP order. Thereafter, the Adjudicating Authority came to a conclusion on 14.02.2025 through the Impugned Order admitting Section 7 Application against the CD thereby initiating CIRP against the CD.
Conclusion- Held that the balance sheets of the Corporate Debtor for multiple financial years continuously record the said sum as “other longterm liabilities” against the name of the Financial Creditor. As held in G.S. Buildtech, such entries are reliable indicators of existence of financial debt. The disbursal, coupled with its classification as a liability, satisfies the requirement of “time value of money” as explained by the Hon’ble Supreme Court in Pioneer Urban. Accordingly, the transaction qualifies as a financial debt under Section 5(8) IBC.
