Jai Engineers Private Limited vs. Mr. Dinesh Kumar Aggarwal - (NATIONAL COMPANY LAW APPELLATE TRIBUNAL) (21 Feb 2023)

Any amount given in trust to a Corporate Debtor cannot be treated as asset of the Corporate Debtor

MANU/NL/0126/2023

Insolvency

Present Appeal has been filed against two orders passed by the Adjudicating Authority. The Adjudicating Authority vide order rejected the application filed by the Appellant for admitting his claim as Financial Creditor and by order of the same date allowed the application of the Resolution Professional approving the Resolution Plan.

Appellant challenging the order contends that, the amount which was given was a financial debt given to the Corporate Debtor to enable the Corporate Debtor to submit Bid Bond Bank Guarantee to the ONGC. Resolution Professional as well as the Adjudicating Authority committed error in rejecting the claim as financial debt. It is further submitted that, in any view of the matter the amount of Rs.50 Lakhs was given to the Corporate Debtor in trust and the amount was for specific purpose and the amount which was given in trust cannot be treated to be part of the assets of the Corporate Debtor and should be kept apart in view of the provisions of the Insolvency and Bankruptcy Code, 2016 (I&B Code).

There can be no dispute to the preposition that, any amount given in trust to a Corporate Debtor cannot be treated as asset of the Corporate Debtor. The agreement entered between the parties on 24th October, 2018, clearly indicate that the amount was the share of the Appellant for submitting Bid Bond Bank Guarantee by the consortium, Appellant being one of the member of the consortium. The agreement which was basis of the claim of the Appellant in no manner indicate that the amount was given in trust to the Corporate Debtor. Amount was given by the Appellant as his share to submit Bid Bond Bank Guarantee. Thus, the submission of the learned counsel for the Appellant, that the amount given by the Appellant was the amount given in trust to the Corporate Debtor is wholly unfounded and cannot be accepted.

With regard to the order of the Adjudicating Authority approving Resolution Plan, no ground has been urged which may warrant any interference by this Tribunal in the order approving the Resolution Plan. There is no merit in the Appeals. Appeals dismissed.

Tags : APPLICATION REJECTION LEGALITY