The lack of a written agreement or proper format of documentation does not invalidate a financial creditor's claim if there is sufficient evidence of financial transactions and acknowledgment of debt.

JUDGMENT

(27^th November, 2024)

Ashok Bhushan, J.

This Appeal by a Financial Creditor has been filed challenging the order dated 08.06.2022 passed by the Adjudicating Authority (National Company Law Tribunal) Kolkata Bench-I, Kolkata dismissing Section 7 application CP(IB) No.309/KB/2020 filed by the Appellant.

2. Brief facts of the case necessary to be noticed for deciding the Appeal are:-

2.1. The Financial Creditor disbursed an amount of Rs.1,00,00,000/- to the Corporate Debtor on 01.11.2016. A Promissory Note was also executed by the Corporate Debtor on 01.11.2016. The disbursement of Rs.1,00,00,000/- was also reflected in the ledger entry of the Financial Creditor. Corporate Debtor paid interest on the Inter Corporate Deposit (ICD) on quarterly basis till 31.03.2018. No payments were made towards interest w.e.f. 01.04.2018. On 01.04.2018, Financial Creditor issued confirmation of the accounts to the corporate debtor for the period 01.04.2017 to 31.03.2018. The confirmation was duly signed by the corporate debtor acknowledging an amount of Rs.1,10,79,999/-. Financial Creditor filed Section 7 application on 16.01.2020 claiming debt due totalling to Rs.1,27,74,686/-. Rs.1,00,00,000/- as principal amount and Rs.27,74,686/- as interest. The Corporate Debtor filed reply to the application to which rejoinder was also filed by the financial creditor. Adjudicating Authority vide its order dated 08.06.2022 rejected the application. Adjudicating Authority held that there is no written agreement between the parties. It held that the Promissory Note is not in proper format and not on a stamp paper and not properly signed. It held that the confirmation of the accounts issued by the corporate debtor fails to establish that the amount due from the corporate debtor to the financial creditor is on account of the ICD. It was further held that there is no document to suggest the date of default. It is not possible for the Adjudicating Authority to ascertain whether there was a default in payment of the due amount. Aggrieved by the order rejecting application, this Appeal has been filed.

3. We have heard Shri Ashok Kumar Parija, Learned Senior Counsel appearing for the Appellant. We have also heard Counsel appearing for the corporate debtor.

4. Learned Senior Counsel for the Appellant challenging the impugned order contends that all the reasons given by the Adjudicating Authority are erroneous and were not sufficient ground to reject Section 7 application. Counsel for the Appellant submits that the mere fact that there is no written agreement between the parties is not decisive when the financial transaction was reflected from the materials which were filed by the financial creditor. It is submitted that the disbursement of the amount is not even disputed. The payment of interest was made by the corporate debtor till 31.03.2018 which is also reflected in the ledger. The account confirmation was also signed by the corporate debtor which is also undisputed fact. The fact that interest was paid by the corporate debtor was also not denied. Non-stamping of the promissory note has no relevance since financial transaction is reflected from other materials on record. It is submitted that the corporate debtor by accepting the confirmation of accounts dated 01.04.2018 has acknowledged that the debt is due right from 01.04.2018 and the Adjudicating Authority erred in rejecting the application on the ground that no demand has put on record.

5. Counsel for the Corporate Debtor refuting the submissions o