IN THE MATTER OF:
D S Kulkarni & Associates Vs Manoj Kumar Aggarwal

NCLAT New Delhi
Mere fact that application for approval of Resolution Plan is pending for consideration by NCLT does not entitle to file an IA for acceptance of claim after more than one and a half year of the approval of Resolution Plan by CoC

Coram: Mr. Justice Ashok Bhushan (Chairperson) and Mr. Arun Baroka (Technical Member)

 

In this case, Resolution Plan was approved by CoC on 13.08.2021 and the Applications were filed by the Appellant(s) in February 2023, i.e., more than one and a half year after approval of the Resolution Plan.

Hon’ble NCLAT holds that:

(i) The MoU, which is the basic document submitted by the Appellant to prove financial debt, does not indicate that transactions are covered by Section 5, sub-section (8) of the Code.

(ii) The mere fact that Application for approval of Resolution Plan is pending for consideration by the Adjudicating Authority does not entitle the Appellant(s) to file an Application for acceptance of their Claim after more than one and a half year of the approval of the Resolution Plan by the CoC.

Relevant Paras:

13. The MoU stated that the Appellant approached the Corporate Debtor for purchasing and or jointly developing the properties. Further, Clause 11 indicates that parties may chose to execute the joint venture and the said consideration amount shall be considered as share/ investment brought by the party of the Second Part. The MoU, which is the basic document submitted by the Appellant to prove financial debt, does not indicate that transactions are covered by Section 5, sub-section (8) of the Code. The consideration according to the MoU was paid either for purchasing the property or for entering into joint venture, where the consideration was to be treated as investment. Joint venture profit has also been captured in Clause 11. The Ledger extract, which has been filed also cannot make the transaction as financial debt.
14. We have looked into the aforesaid MoU and claim of Ledger extract to satisfy ourselves as to whether RP was obliged to admit the claim asfinancial debt on the basis of said documents. We are of the view that RP has rightly communicated to the Appellant that documents submitted are insufficient to accept their claim as financial debt and no error has been committed.

15. Now, we also look into the MoU dated 13.04.2013, which is relied in Company Appeal (AT) (Ins.) No.924 of 2023 by D.S. Kulkarni & Company. In the aforesaid case, claim was also filed in Form-CA, i.e., Claim by Financial Creditor. The Claim Form refers to MoU and the Ledger extract. MoU has been filed as Annexure-A2. MoU was entered between the Corporate Debtor and D.S. Kulkarni & Company. In Clauses D, E and F, following have been stated:
“D. The party of the second Part had came to know that the Party of the First Part is developing and constructing large Township at Fursungi Ie. Property described in Schedule – I written hereunder, therefore Party of the Second Part was desirous to purchase various units/ commercial complex in proposed township to be developed by Party of the First Part.
E. Thus, Party of the Second part approached to party of the First with intention to purchase proposed units in township at Fursungi, to be constructed in DSKDI. i.e. Party of the First Part.
F. The parties after negotiations agreed that, Party of the First Part will allot various Units to be constructed in the township Adm. About 5,00,000/- Sq. ft. built up rate of Rs.6,000/- per sq. ft. thus, the final consideration will be Rs.300,00,00,000/- (Rupees Three Hundred Crores only).”

20. Insofar as documents which have been brought on record by the Appellant(s) before the Adjudicating Authority by filing additional affidavit, suffice it to say that the basic documents relied by the Appellant(s) were MoU and Ledger extract. The MoU, which is a basic document evidencing the transaction does not qualify as a financial debt and the RP has rightly taken the view that the documents filed, i.e. MoU and Ledger statement are insufficient to accept the Claim as financial debt.

21. In view of the foregoing discussions and conclusions, we are of the view that no grounds have been made out to interfere with the order dated 31.03.2023 passed by the Adjudicating Authority, rejecting IA Nos 721 and 722 of 2023. Both the Appeals are dismissed. No order as to costs.

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S Kulkarni & Associate Vs Manoj Kumar Aggarwal NCLAT The Law Literates Judgment

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