Bijendra Prasad Mishra Vs HS Mercantile Pvt. Ltd. (NCLAT Delhi)
NCLAT Delhi Held that a written agreement is not a condition precedent to prove the existence of a financial debt. Accordingly, CIRP application u/s. 7 of IBC duly admitted as debt and default proved.
Facts- The instant appeal is preferred against the impugned order dated 13.12.2024 passed by the National Company Law Tribunal, Kolkata Bench (Court-I) whereby application moved by Respondent No. 2 under Section 7 of the IBC has been accepted and CIRP is initiated against Respondent No. 1/Corporate Debtor.
Conclusion- In Jaiprakash Agarwal Managing Director, Bazargaon Paper & Pulp Mills Pvt. Ltd. Vs Alka Prakash Agarwal and Another, Company Appeal (AT) (Insolvency) No. 292 of 2023, decided on 02.07.2024 this Appellate Tribunal held that written financial contract is not a pre-condition or an exclusive requirement for proving existence of debt. It has been further amplified that the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 and CIRP Regulations makes it is clear that financial debt can be proved from other relevant documents and it is not mandatory that written financial contract can be the only basis for proving the financial debt.
Held that a written agreement is not a condition precedent to prove the existence of a financial debt and the same very well be proved by other documentary evidence. Acknowledgment by the Corporate Debtor in balance sheet of date 31.03.2017 coupled with the TDS deduction certificate (26 AS) and other supporting documents e.g. demand notice given by financial creditor, matching of figures of loan amount along with interest as given in the notice and in the balance sheet of CD of dated 31.03.2017, in our considered opinion are sufficient to prove the existence of legally payable debt, default and filing of application within the extended period of limitation having regard to section 18 of the Limitation Act. The disbursement of money is otherwise also admitted to the appellant but he is claiming it as an advance to supply goods, and this fact has not been substantiated by the material made available on record and is not sufficient to negate the existence of a financial debt and default. Therefore, the conclusion of the Adjudicating Authority that there is financial debt, default and the application has been filed within extended period of limitation cannot be said to be not based on the material which was available on record. There is sufficient material on record to establish debt, default, acknowledgement of debt in the Balance Sheet dated 31.03.2017 and filing of application within extended limitation, restraining us not to interfere in the impugned judgement.
