BEFORE
THE HON’BLE NATIONAL COMPANY LAW TRIBUNAL,
KOLKATA
BENCH
TP No. 128 of 2024
IN
THE MATTER OF;
An
application under Section 7 of the Insolvency and Bankruptcy Code, 2016 read
with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating
Authority) Rules, 2016.
A N D
In the matter of;
Abstract
Logistix Pvt. Ltd.
… Financial Creditor
-
Versus -
Nuddea
Plantations Limited
… Corporate Debtor
AFFIDAVIT
– IN REPLY OF CORPORATE DEBTOR
AFFIDAVIT
IN REPLY
(on behalf of the Corporate Debtor)
I, Sri Subrata Bhowmick, Son of Late Sailesh Bhowmick, aged about 45 years,
by faith Hindu, by Occupation Business, residing at Dolaigaon, Police Station –
Bonaigaon, Assam - 783380, being the Director of Nuddea
Plantations Limited, having its Registered Office at Totapara Tea Estate,
Banarhat, Jalpaiguri, West Bengal – 735202, do hereby solemnly affirm and state
as follows;
1. Preliminary Statement;
1.1. I am the duly authorized
representative being Director of the Corporate Debtor – Nuddea Plantations
Limited, and am competent to affirm this affidavit. The statements made
herein are based on records and information available with the Company, which I
believe to be true and correct.
1.2. I most respectfully submit that
the present application filed by Abstract Logistix Pvt. Ltd. under
Section 7 of the Insolvency and Bankruptcy Code, 2016 (“the Code”), is not maintainable, barred by limitation, and devoid of merit, as the alleged
“financial debt” does not qualify as a financial debt under Section 5(8)
of the Code, nor has any legally enforceable liability been established.
1.3. The Applicant has mischaracterized
a commercial transaction / trade
advance as a “financial debt”, which is impermissible under law. The
Application is an abuse of the process of the Tribunal and is liable to be
dismissed at the threshold.
2. Brief Facts of the Case;
2.1. The Corporate Debtor is an
old Tea Company, incorporated in 1918, engaged in plantation, manufacturing,
and sale of tea. It continues to be a going concern with several operating tea
estates and employees dependent upon its operations.
2.2. The Applicant – Abstract
Logistix Pvt. Ltd. had, during 2009–2013, certain business dealings
relating to supply and transportation services for shipment of tea
consignments. Certain communications were exchanged, but there was no loan agreement, disbursement of funds as
debt, or interest-bearing financial facility ever extended to the
Corporate Debtor.
2.3. The so-called “letters” relied
upon by the Applicant (dated 11.09.2009, 05.01.2010, 31.03.2013, etc.) merely
pertain to commercial understanding and reconciliation of accounts
arising out of business transactions, and not a financial debt within
the meaning of Section 5(8) of the Code.
2.4. The alleged cheque dated
25.04.2014 for ₹40,00,000/-
was never issued in discharge of any loan, but was merely issued on
account of settlement discussions in respect of trade invoices which were
still under dispute. The said cheque was returned unencashed, and no further
action was taken by the Applicant thereafter.
2.5. It is significant to note that the
Applicant had earlier filed a winding-up petition being C.P. No. 648 of 2016 before the Hon’ble Calcutta High Court under
Sections 433/434 of the Companies Act, 1956, on the same alleged cause of
action. The said petition was never admitted and stands disposed of / not pursued. Thus, the present application is hit by
the principle of res judicata
and is a re-litigation of the
same alleged claim.
3. Preliminary Objections;
I beg to say that the FORM I has not been placed in
proper form by the alleged Financial Creditor in the followings;
(a) That the Part II Column 6, wherein the alleged
Financial Creditor states as “Income not known” against ASSETS AND INCOME,
“Financial Creditor, amount of debt Rs. 55,58,356.16,” against CLASS OF
CREDITORS OR AMOUNT OF DEBT and nothing stated against CATEGORY OF CORPORATE
PERSON;
(b) That the Part III being Particulars of the proposed
Interim Resolution Professional, has been left blank without furnishing any
particulars, so far therein;
(c) That the Part IV being Particulars of Financial Debt
in Column 1, shows as Rs. 35,211.66 (Rupees Thirty Five Thousand and Two
Hundred Eleven paise sixty six) only, as on 31.03.2013, pursuant to letter of
confirmation, which are not the correct statements in respect of the Total
amount of debt granted and the date of disbursement;
(d) That the Part IV being Particulars of Financial Debt
in Column 2, shows as Rs. 40,00,000/- as on 25-04-2014, thereafter interest
earned on recurring basis which is calculated @ 18% P.A. on Principal till
25-06-2016, therefore the total sum of Rs. 55,58,356.16, as on 25.06.2016,
working for computation of Amount of Dues as in Annexure –“A” Page – 7, and at
page 7 under Heading Computation of Amount of Dues stated as “A cheque was
issued for payment of the confirned outstanding dues along with subsequent interest
on settlement agreed on the Round figure of 40,00,000/- but returned”, and
thereafter as on 25.01.2020, Calculation of Further interest as “Since the
cheque is not encashed and the outstanding dues is earned monthly interest on
recurring basis and calculation of interest on the charge value @ 18% P.A.
comes to the sum of Rs. 15,58,356.16, and therefore the total sum stands as Rs.
55,58,356.16”. Thus the alleged Financial Creditor did not provide the Amount
Claimed to be in default and the date on which the default occurred and did not
attach the workings for computati8on of amount and days of default in Tabular
Form. The self statements whatever stated by the alleged Financial Creditor in
Part IV and the attached working are contradictory and not able to accept even
on its face value.
(e) That the Part V Colum 3 which needs Records of
Default with the Information Utility, if any has been left out without any
particulars thereof given by the alleged Financial Creditor, however, it has
been engraved as “NOT APPLICABLE”, the reasons has not ever been assigned.
(f)
That the Part
V Colum 5 which asked for the Latest and complete copy of the Financial Contract
Reflecting all amendments and waivers to date, wherein the alleged Financial
Creditor attached the followings;
(i)
Letter dt.
September 11, 2009;
(ii)
Letter dt.
September 11, 2009;
(iii)
Letter dt.
November 14, 2009;
(iv)
Letter dt.
January 5, 2010;
(v)
Letter dt.
March 31, 2013;
(vi)
Letter dated
11th September 2003;
(vii) Cheque dt. April 25, 2014 but returned;
(viii) Letter dt. March 09, 2016;
(ix)
Email dt.
October 13, 2014;
While dealing with the Letter dt. September 11,
2009, it is contended about the ICD (Inter Corporate Deposit) being subject of
the said letter, thereafter the Letter dt. November 14, 2009, contended as Loan
being subject of the said letter, the Letter dt. January 5, 2010, contended
about the ICD (Inter Corporate Deposit) being subject of the said letter, does
not qualify for Section 5 of the Code.
(g) That the Part V Column 7 asked for Copies of Entries
in a Bankers Book in accordance with the Bankers Book Evidence Act 1891 (18 OF
1891), wherein the alleged Financial Creditor did not attach any Bank Statement
to show any entry of the alleged loan, and left blank being unanswerable to
that affect.
(h) That the Part V Column 8, seeks the List of other
documents attached to the application in order to prove the existence of
Financial debt, the amount and date of default, wherein the alleged Financial
Creditor attached the copy of the petition with annexures along with the
statutory notice dated 16-05-2016, and others; But failed to states about the
“date of default” and the “Amount”, so far, therefore an “Omnibus” approach of
the alleged Financial Creditors does not qualify under Section 5 of the Code,
in any manner, whatsoever.
(i)
That the
Petition under Sections 433, 434, and 439 of the Companies Act 1956, of the
alleged Financial Creditor, found the following while consider ;
(a) Paragraph no. 8, stated as “That the Directors of
the Company are business friends of the Directors of the petitioner Company and
the Company was running a Tea Estate named Totapara Tea Estate situated at
Banerhat, Post Office Banarhat, District Jalpaiguri.”
(b) Paragraph no. 9, stated as “ That the Directors of
the company came to the office of the petitioner in the month of September,
2009 and requested to extend some financial help by way of Short Term Loan with
oral commitment if they could not make payment they will sale some property
from New Jalpaiguri Town or from Bongaigaon Assam for their Real Estates
business. With that assurance and upon anticipation of acquiring some
properties from the Company the petitioner accepted that proposal and agreed to
give some Short Term Loan with a nominal rate of interest with understanding if
they could not pay the dues, some of their property to be transferred in their
name in the market rates.”
(c) Paragraph no. 10, stated as “That thereafter the
Company made some part payment along with interest on a continuous account but
could not repay the entire amount within time stipulated in the said letter,
and it was intimated to them that they are also unable to transfer any property
of clear title with them and they will settled and pay it by one short or two.”
The entire episode given by the alleged Financial
Creditor is un believable, at first all are the friends and the Director of the
Corporate Debtors visited the Office of the alleged Financial Creditor in the
month of September, 2009 and requested to extend some financial help by way of
Short Term Loan with oral commitment, and thereafter the alleged Financial
Creditor given at first only on 11th September, 2011, 14th
November, 2009, 5th January, 2010, being total alleged sum of Rs.
46,00,000/- and consequently the Corporate Debtor made some part payment on a
continuous account but could not repay the entire amount within time stipulated
in the said letter. While dealing with the Letter dt. September 11, 2009, it is
contended about the ICD (Inter Corporate Deposit) being subject of the said
letter, thereafter the Letter dt. November 14, 2009, contended as Loan being
subject of the said letter, the Letter dt. January 5, 2010, contended about the
ICD (Inter Corporate Deposit) being subject of the said letter, does not
qualify for Section 5 of the Code. It is pertinent to say that there is no
Agreement or any Commercial Contract specifying any terms whatsoever. The
alleged Financial Creditor is not able to produce any Agreement whatsoever.
(j)
That I beg to
say that Section 7 of the Insolvency and Bankruptcy Code casts an obligation on
the alleged Financial Creditor to furnish the record of default being record
with the information utility or such other record or evidence of default as may
be specified;
That NESL has
been notified as the information utility portal as required under the
provisions of the Insolvency and Bankruptcy Code 2016.
In the present case, there is no record of
information with the information utility. In fact, in column 3 of Part V of the
Form I, the Financial Creditor has stated that the record of default is not
applicable.
(k) That the perusal of Part V of the Form I filed would
show that the alleged Financial Creditor has no documentary proof to establish
that any amount was ever due from the Corporate Debtor. The list of documents
and the contents of such documents, are tabulated as follows;
|
Sl. No. |
Document |
Description |
Response |
|
1 |
(i) Letter dt. September 11, 2009; (ii) Letter dt. September 11, 2009; (iii) Letter dt. November 14, 2009; (iv) Letter dt. January 5, 2010; (v) Letter dt. March 31, 2013; (vi) Letter dated 11th September 2003; (vii) Cheque dt. April 25, 2014 but returned; (viii) Letter dt. March 09, 2016; (ix) Email dt. October 13, 2014; |
The document shows about the ICD (Inter Corporate
Deposit); |
The document is no proof of the alleged Financial
Debt |
|
2 |
The Petition under Sections 433, 434, and 439 of
the Companies Act 1956; |
The documents shows about friendly loan; |
The document is no proof of the alleged Financial
Debt |
|
3 |
Computation of Amount of Dues; |
The documents shows self calculation without any
basis, so far; |
The document is no proof of the alleged Financial
Debt |
(l)
That I beg to say that in order
to establish a financial debt there must be time value of money, i.e., the
money alleged to be pumped by the Financial Creditor into the company should
carry interest. Mere claim of interest by the Financial Creditor is not
sufficient. There must be an agreement or a board resolution accepting the loan
from the Financial Creditor. In the present case, there is no resolution
accepting payment of interest to the Financial Creditor much less any
resolution accepting any loan from the Financial Creditor.
(m)
That I beg to say that Section 5
of the Insolvency and Bankruptcy code clearly states that to constitute a
“Financial Debt” the debt is disbursed against the consideration for time value
of money. “Time value of money’ would mean compensation or the price paid for
the length of time for which the money has been disbursed. In fact the
transaction would not have the effect of ‘commercial effect of borrowing’.
(n) That
I beg to say that at the outset, it may be stated that the application under
consideration, being one under Section 7 of the I&B Code, 2016, it is
imperative for the applicant to establish existence of a financial debt of a
sum of over Rupees one crore due and payable by the Corporate Debtor and that
the Corporate Debtor has defaulted in repayment of the same.
(o) That I beg to say that there is no financial debt as
claimed by the Financial Creditor due and payable by the Corporate Debtor, as
such the question of committing default in repayment of the same does not even
arise.
(p) That I beg to say that mere transfer of amount to
the account of the Corporate Debtor by the alleged Financial Creditor does not
create a debt much less a financial debt as envisaged under Section 5(3) of the
I & B Code, 2016.
(q) That I beg to say that the Directors of the alleged Financial
Creditor and the Corporate Debtor are the Friends, thus the Corporate Debtor is
a closely held Company, therefore, even assuming that the sum as claimed by the
applicant / financial creditor has been transferred to the account of the
Corporate Debtor, the same by itself does not create a transaction of “debt”
since it is common in the friendship.
(r)
That I beg to
say that in absence of the record of default recorded with the “Information
Utility” being filed by the alleged Financial Creditor, the application is
liable to be rejected at once.
A.
The Application is barred by limitation;
3.1. The alleged default is stated to
have occurred on 25.04.2014, and
the present application was filed only on 20.08.2024, i.e., after a lapse of more than ten (10) years.
3.2. Under Article 137 of the Limitation Act, 1963, the limitation period for
filing an application under Section 7 of the Code is three (3) years from the
date of default. No acknowledgment of debt under Section 18 of the Limitation
Act has been pleaded or proved by the Applicant. Therefore, the claim is time-barred and not maintainable.
B.
No Financial Debt Exists under Section 5(8) of the Code;
3.3. The alleged transaction is neither
a disbursement against consideration for time value of money nor a financial
facility. It was purely a commercial transaction in the nature of
business advances or payments for logistics services.
3.4. The Applicant has failed to
produce any loan agreement, interest clause, repayment schedule, or bank entries evidencing disbursement
as a financial debt. Mere correspondence or cheque issuance does not create a
financial debt within the meaning of the Code.
3.5. The alleged transaction between
the Applicant and the Corporate Debtor was, at best, a short-term commercial
accommodation or advance made during the course of business. It was not
disbursed against any consideration for the time value of money, nor was it
pursuant to any loan agreement or financial arrangement carrying terms of
repayment or interest.
3.6. It is settled law that a short-term loan or trade
advance given without any underlying financial contract or evidence
of borrowing does not qualify as a “financial
debt” under Section 5(8) of the Insolvency and Bankruptcy Code,
2016.
3.7. Therefore, even assuming
without admitting that any amount was advanced by the Applicant, the same being
a short-term
commercial transaction cannot come within the purview of “financial
debt” and cannot trigger proceedings under Section 7 of the Code.
3.7.1. It is submitted that the
alleged transaction between the Applicant and the Corporate Debtor is in the
nature of an Inter-Corporate
Deposit (ICD), which is merely a temporary financial accommodation
or placement of surplus funds, without any underlying agreement of loan or
financial contract involving consideration for the time value of money.
3.7.2. The Hon’ble Supreme Court in Radha Exports (India) Pvt. Ltd.
v. K.P. Jayram (Civil Appeal No. 7470 of 2019) and the Hon’ble
NCLAT in Shailesh
Sangani v. Joel Cardoso (Company Appeal (AT) (Insolvency) No. 616
of 2018) have held that such inter-corporate deposits, in absence of an element
of disbursement against consideration for time value of money, do not come
within the ambit of “financial debt” as defined under Section 5(8) of the Code.
3.7.3. Therefore, the present
application under Section 7 of the IBC is not maintainable, as the alleged
claim does not satisfy the statutory ingredients of a “financial debt,” nor
does the Applicant qualify as a “financial creditor” within the meaning of
Section 5(7) of the Code.
3.7.4 The alleged transaction
between the Applicant and the Corporate Debtor was, at best, a friendly commercial loan
or goodwill
accommodation extended on personal or business relationship grounds.
The said transaction was not structured as a financial contract, did not carry
any agreed rate of interest, nor was it disbursed against any consideration for
the time value of money.
3.7.5. The Hon’ble Supreme Court in Radha Exports (India) Pvt. Ltd.
v. K.P. Jayram (Civil Appeal No. 7470 of 2019) and the Hon’ble
NCLAT in Dr. B.V.S.
Lakshmi v. Geometrix Laser Solutions Pvt. Ltd. have categorically
held that such friendly or goodwill advances do not fall within the scope of
“financial debt” under Section 5(8) of the Code.
3.7.6. Hence, the present claim
being in the nature of a friendly
loan without the essential characteristics of a financial
transaction, the Applicant cannot be treated as a Financial Creditor, and the present
petition under Section 7 of the IBC is liable
to be dismissed in limine.
3.7.7. The Applicant’s reliance
on the entry “Unsecured Loan from Body Corporate” shown in the Director’s
Report of the Corporate Debtor for the financial year ending 31st March 2013 is
wholly misconceived and untenable. Mere reflection of an unsecured loan in the
company’s books or report does not, by itself, constitute a “financial debt”
under Section 5(8) of the Insolvency and Bankruptcy Code, 2016.
3.7.8. It is respectfully submitted
that the said entry represented only a friendly or commercial accommodation
between entities, without any financial contract, without any element of
interest, and without any disbursement against consideration for the time value
of money. As such, the essential statutory requirement of a financial debt is
not met.
3.7.9. Accordingly, the alleged
claim, even if assumed for argument’s sake to exist in the Director’s Report,
cannot be treated as a “financial debt” so as to invoke the jurisdiction of
this Hon’ble Tribunal under Section 7 of the Code.
3.8. Reliance may be placed on judicial
precedents such as;
(i)
M/s. Radha Exports (India) Pvt. Ltd. v.
K.P. Jayram & Anr., Civil Appeal No. 7470/2019 (Supreme
Court, 2019);
(ii) Dr.
B.V.S. Lakshmi v. Geometrix Laser Solutions Pvt. Ltd.,
Company Appeal (AT) (Insolvency) No. 38/2017 (NCLAT)
which clarify that trade dues or business transactions do not constitute
financial debt.
C.
No Default Established;
3.9. The Applicant has not produced any
documentary proof such as bank statements or entries in bankers’ books
evidencing the alleged disbursement or default. The computation of interest
@18% per annum is self-serving and unsubstantiated.
3.9.1. The burden of proof lies on the
Applicant to establish both the existence of financial debt and default
under Sections 7(1) and 7(5)(a) of the Code, which remains unfulfilled.
D.
Suppression and Misrepresentation;
3.9.2. The Applicant has suppressed
material facts regarding the earlier winding-up proceedings (C.P. No. 648/2016)
and has misled this Hon’ble Tribunal by projecting the same commercial
correspondence as a financial contract.
3.9.3. The petition is therefore liable
to be rejected under Rule 11 of the NCLT Rules, 2016 for abuse of process.
4. Corporate Debtor is a Going Concern;
4.1. The Corporate Debtor is a
functional and operational tea manufacturing company with substantial assets,
workforce, and ongoing production. Initiation of CIRP on such frivolous grounds
would cause irreparable prejudice to the company and its employees.
4.2. The object of the Code is resolution
of genuine financial distress, not to be used as a debt recovery
mechanism or tool of coercion. The present proceeding squarely falls within
such misuse.
In
light of the above, the Corporate Debtor most respectfully prays that
this Hon’ble Tribunal may be pleased to;
(a)
Dismiss the application filed by
Abstract Logistix Pvt. Ltd. under Section 7 of the Insolvency and
Bankruptcy Code, 2016 as being not maintainable, barred by limitation, and
devoid of merits;
(b)
Impose exemplary costs on the
Applicant for filing a vexatious and frivolous proceeding; and
(c)
Pass such further order(s) as
this Hon’ble Tribunal may deem fit and proper in the facts and circumstances of
the case.
And for this act of kindness, the Corporate Debtor as in duty bound shall
ever pray.
Verification
I, Subrata Bhowmick,
the deponent above named, do hereby verify that the contents of paragraphs 1 to
4 are true and correct to my knowledge and belief, and nothing material has
been concealed therefrom.
Verified at Kolkata on this ___ day of
__________, 2025.
DEPONENT
Identified
by me,
Advocate.
Prepared in
my Chamber,
Advocate.
Date : _______________2025
Place :
Kolkata.
N O T A R Y
