Ajay Dhawan Vs D.S.G. Papers Private Limited

Harnam Singh Thakur, Member (Judicial)

L.N. Gupta, Member (Technical)

The present petition has been filed by Ajay Dhawan, (hereinafter referred to as the “Petitioner/Financial Creditor”), through his Power of Attorney Holder, Mr. Sanjay Dhawan, under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process against D.S.G. Papers Private Limited, (hereinafter referred to as the “Respondent/Corporate Debtor”), claiming a default of Rs. 8,18,66,784.52/- on the part of the Corporate Debtor.

The facts stated in the application are as under:

2.1 The Petitioner and Mr. Manoj Kumar, Director of the Respondent Company had cordial family relations, and Mr. Manoj Kumar was running the Respondent Company.

2.2 The Petitioner had invested money in the Respondent Company and was assured that he would get 20% holding shares in the Respondent Company.

2.3 The Petitioner transferred Rs. 33,70,000/- to the Respondent Company and initially, 3,09,250 shares were allotted to him in the year 2004-05, in the Respondent Company. The directors of the Respondent Company again asked for some financial assistance, which was refused by the Petitioner, and was informed later on that the Respondent Company had got the funds infused from other persons and in doing so, had changed the share holding pattern of the company, and the shareholding of the Petitioner was reduced to 2,23,000. The Petitioner approached the directors of the Respondent Company in this regard and was informed by the directors that this was done keeping in view the financial health of the company and was assured that the money invested by him was safe. The house of the Petitioner was also mortgaged, and the father of the Petitioner also gave his personal guarantees as security, to raise funds for the Respondent Company.

2.4 Mr. Manoj Kumar contacted the Petitioner in September 2012 for further financial assistance for the Respondent Company and assured that the said amount would be treated as a loan towards the Respondent Company. On 14th and 15th September, 2012, the Petitioner transferred Rs. 1,04,50,000/- and 55,000 more shares were issued in the name of the Petitioner, and the total shareholding of the Petitioner in the Respondent Company was raised to 2,78,000.

2.5 Monetary assistance was again demanded, to which the Petitioner strongly objected and asked for the books of accounts of the Respondent Company, which was bluntly denied. The Petitioner exited the Respondent Company, and accordingly, a full and final settlement/agreement was entered into on 18.12.2015.

2.6 The value of the Petitioner in the Respondent Company was assessed as Rs. 6,00,00,000/- out of which the Respondent Company had already paid Rs. 83,77,140/- to the Petitioner, and a cheque bearing no. 861414 drawn on ICICI Bank dated 01.10.2016, was issued by the Respondent Company, amounting to Rs. 2,43,73,000/- as part payment, and the remaining debt liability was to be paid in six equal monthly installments, commencing from 01.04.2017.

2.7 However, the said cheque, when presented to HDFC Bank Limited by the Petitioner, was dishonoured with the remarks “Funds insufficient” vide return memo dated 25.10.2016 and an application was filed by the Petitioner, before the I.G. NRI Wing, SAS Nagar, Mohali (Punjab).

2.8 Mr. Manoj Kumar, on behalf of the Respondent Company, asked for some time and assured that the cheque amount will be honored. In the month of December 2016, Mr. Manoj Kumar asked the Petitioner to present the cheque for encashment, and the same was presented with the HDFC Bank Limited, Dharampura Bazar, Patiala (Punjab), which was again dishonoured vide memo dated 13.12.2016, with the remarks “Kindly Contact Drawer Drawee Bank”.

2.9 A legal notice dated 30.12.2016, under Section 138 of the Negotiable Instruments Act, 1881, was served by the Petitioner on the Respondent Company for failing to honour its commitment as per the terms and conditions of the full and final settlement/agreement dated 18.12.2015.

2.10 The Petitioner claims Rs. 8,18,66,784.52/- as the default amount (Rs. 5,16,22,860/- as the principal amount and Rs. 3,02,43,924.52/-, as the interest amount, calculated @18 % from respective dates of deposits, as on 19.03.2019). The date of default, as mentioned in Part-IV of the petition, is 25.10.2016.

The Respondent Company/Corporate Debtor filed its reply via diary no. 4232 dated 21.08.2019, wherein it is stated that the purported agreement relied upon by the Petitioner/Financial Creditor is forged and fabricated, including the cheque. It is alleged by the Respondent Company/Corporate Debtor that the Petitioner had mis-used the blank signed letterhead and signed cheque no. 861414 given to Mr. Sanjay Dhawan in the year 2006. The Respondent has further contended the following:

3.1   The Respondent Company/Corporate Debtor had relied upon Hon’ble NCLT, New Delhi’s judgment in the matter of Prayag Polytech Private Limited v. Gem Batteries Private Limited, (IB) 178 (ND)/2019 wherein the essential requirements to be fulfilled for a petition to be filed under Section 7 of the IBC were discussed.

3.2 It is contented on behalf of the Respondent Company/Corporate Debtor that the purported agreement dated 18.12.2015 does not disclose the liability Mr. Manoj sought to pay on behalf of the company or how the Respondent Company/Corporate Debtor owes a ‘financial debt’ to the Petitioner in terms of Section 5(8). If the Petitioner had, in fact, advanced any money to the company as a ‘financial creditor’, then the Petitioner must explain how the company had ‘defaulted’ in terms of Section 3(12) of the Code and the terms on which the said money was to be paid to the Petitioner. Further, the nature of the liability is also not available, and the agreement is entered into on a letterhead that was used by the company in 2006, and has not been in use for many years, and is very different from the one used in the year 2015, when this alleged forged agreement was purportedly signed.

3.3 It is further alleged by the Respondent Company/Corporate Debtor that the Petitioner has failed to disclose the following essential concomitants:

(a) Whether the Petitioner is claiming the amount due to him as a debt? If so, what is the nature of such a debt? Was it advanced as a loan, if so, then on what date, and for what duration?

(b) The petition does not disclose the financial instrument executed between the parties pursuant to which the alleged ‘debt’ was created in the first place.

(c) There is no documentation forthcoming as to the manner in which such alleged debt would be repaid by the company and therefore, how the company is in default of the same.

3.4 It is stated by the Respondent Company/Corporate Debtor that no liability stands reflected as payable towards the Petitioner/Financial Creditor in the duly audited books of accounts of the company as of date.

3.5 It is submitted by the Respondent Company/Corporate Debtor that the Petitioner/Financial Creditor had advanced an unsecured loan of Rs. 49,50,000/- in 2012, which stands repaid on 07.05.2015 in its entirety, and no other transaction was entered into between both parties.

3.6 The Respondent Company/Corporate Debtor has submitted the following facts necessary for the adjudication of the present application:

(a) The Respondent Company is a closely held family company, with Mr. Manoj Kumar and his wife, Mrs. Neeru Gupta, being the majority shareholders. The Dhawan family (Mr. Ajay Dhawan and Mr. Sanjay Dhawan and their families) were the neighbors of the Gupta family (Mr. Manoj Kumar and his family) and wanted to invest in a new venture being set up by the Gupta’s, i.e., the Respondent Company, D.S.G. Papers Private Limited.

(b) The Dhawan family became shareholders in the Respondent Company and acquired shares in the company in the following manner:

NAME

YEAR

INVESTMENT (INR)

NO. OF SHARES

Ajay Dhawan

2004-05

33,70,000/-

2,23,000

Sanjay Dhawan

2004-05

1,35,000/-

3375

Shallu Dhawan

2004-05

2,00,000/-

5000

Ved Prakash Dhawan

2004-05

3,45,000/-

8625

Ajay Dhawan (second round)

2012

55,00,000/-

55,000

Additionally, Mr. Ajay Dhawan had advanced an unsecured loan of Rs. 49,50,000/- to the Respondent Company in 2012, which was paid off in installments, with the last cheque being cleared on 07.05.2015.

(c) Mr. Sanjay Dhawan joined the Respondent Company on a wholetime basis and has been sitting at the office premises since 2005. Until 2009-10, he had no official designation in the company, but upon his request and considering family relations, he was given the title of ‘President’ and his wife, Mrs. Shallu Dhawan was assigned the title of ‘Manager (Training and Development)’. Neither Mr. Sanjay Dhawan nor any of his family members were ever Directors in the company, nor were they designated as authorised signatories in the bank. Mr. Manoj Kumar treated Mr. Sanjay Dhawan as a co-owner, and permitted him to run operations on a day to day basis as an owner, even in his absence. The various correspondences/orders/agreements entered into by Mr. Sanjay Dhawan, signing as the authorised signatory for the Respondent Company on the company’s letterhead, are annexed as Annexure R-1 Colly.

(d) Mr. Manoj Kumar, on various occasions, had left blank, signed letterheads of the company and blank, signed undated cheques with Mr. Sanjay Dhawan to meet the contingent requirements of the respondent company in his absence.

(e) Mr. Manoj Kumar went abroad from 26.08.2006 to 02.09.2006 and handed over signed blank letterheads and signed and undated cheques bearing numbers 861411-861414 drawn on the ICICI Bank, to Mr. Sanjay Dhawan. The cheques were utilized by Mr. Sanjay Dhawan in the interests of the company; however, cheque no. 861414 was dishonestly kept by Mr. Sanjay Dhawan in conspiracy with Mr. Ajay Dhawan and has been presented after filing in a date of 01.10.2016 and a figure of Rs. 2,43,73,000/-. The handwriting on the cheque does not belong to Mr. Manoj Kumar.

(f) Cheque No. 861415 and onwards were used by Mr. Manoj Kumar during the year 2006 itself.

(g) Similarly, while going abroad, Mr. Manoj Kumar handed over to Mr. Sanjay Dhawan signed cheques drawn on the Punjab National Bank (PNB).

(h) After many years, in the year 2015, the company in an audit was not able to locate some cheques and gave a request to the ICICI Bank on 09.10.2015 to cancel all the cheques issued by them from their current A/C No. 016205001003, which were older than two years from the date of today. A copy of the said request and the confirmation given by the ICICI bank about the destruction of Cheque No. 861414 is marked and attached as Annexure R-5 Colly. And consequently, cheque no. 861414 stood canceled in the year 2015 itself.

(i) RBI issued certain directions to banks in the years 2011-2012, much prior to 2015, in respect of reducing the validity of a cheque from 6 months to 3 months and also to incorporate certain new security features. Therefore, any cheques issued by any bank in 2006 would no longer be valid in 2016, nor would they be acceptable to anyone.

(j) In the year 2013, Mr. Sanjay Dhawan and Mrs. Shallu Dhawan were issued a legal notice and were asked to stop working for the company as it was found that they had been indulging in activities which did not align with the company's best interests. Mr. Sanjay Dhawan and Mrs. Shallu Dhawan chose not to respond to the notice, and stopped coming to the company. In the months of June-July 2013, they approached Mr. Manoj Kumar with a request to buy out the Dhawan family’s shares, which was initially rejected, but was accepted on the pressure of the local acquaintances on the Gupta family to accept their request as Mr. Sanjay Dhawan’s business was not doing well..

(k) Consequently, on 25.09.2013, Mr. Sanjay Dhawan and his family, including the present Petitioner, Mr. Ajay Dhawan, entered into an agreement with the Gupta family and sold their entire shareholding in the Respondent Company. A copy of the said agreement, along with vernacular copy, is enclosed as Annexure R-9 colly.

(l) According to the said agreement, in lieu of the shares of the Dhawan family, Mr. Manoj Kumar and Mrs. Neeru Gupta issued post-dated cheques in the name of DMS Papers Private Limited, worth Rs. 77,76,065/-. Additionally, a property at Sirhind Road, Patiala, measuring appx. 250 sq. yards, was to be given to the Dhawan family in lieu of the shares, which was duly transferred to Mrs. Shallu Dhawan.

(m) Also, Mr. Ajay Dhawan’s unsecured loan for Rs. 49.50L was repaid in post-dated cheques issued from the Respondent Company. Further, the Dhawan family’s house in Green View Colony, which was mortgaged with the State Bank of India against DSG Papers loans, was to be unencumbered from the bank; which was duly done.

(n) On 12.11.2013, Mr. Sanjay Dhawan purchased stamp papers and rewrote the agreement, saying that there were some handwritten lines/paragraphs in the previous agreement and that he wanted everything to be typed to avoid any disputes. Consequently, the parties once again entered into a second agreement, which is marked and annexed as Annexure R-10 Colly, on the same terms and conditions as previously agreed upon.

(o) Upon exit from the company, according to the agreement, against an investment of Rs. 95.5 L in shares, the Dhawan family was given Rs. 77.76 L vide post-dated cheques (excluding Mr. Ajay Dhawan’s unsecured loan of Rs. 49.50 L, which was paid separately) and a property worth Rs. 1.5 Cr. i.e., a total of Rs. 2.276 Cr. against an investment of Rs. 95.5 L.

(p) Further, on 03.11.2016, Mr. Ajay Dhawan made a complaint to the Inspector General of Police, Mohali, claiming that he and his family had entered into the agreement dated 25.09.2013 under coercion and Mr. Manoj Kumar had forced him to sign the agreement and stated that his family members received the following payments:

i. Shallu Dhawan : Rs. 3,50,000

ii. Sanjay Dhawan : Rs. 2,36,250

iii. V.P. Dhawan : Rs. 6,03,750

Qua payments to himself, the petitioner mentioned: i. Rs/. 49,50,000 : towards the unsecured loan. ii. Rs. 34,27,140 : against shares.

And also proceeded to claim “payment still remaining is Rs.2,43,72,860/-”.

(q) The Petitioner further alleged in the police complaint that in December 2015 (written as 2016), he visited India and told Mr. Manoj Kumar that he had wronged the Petitioner and would complain to the police, upon which Mr. Manoj Kumar issued the cheque dated 01.10.2016 bearing no. 861414. It is further stated in the complaint that since the cheque in question bounced, the Petitioner had been cheated, and an FIR should be registered. The Petitioner claimed that the wife of Mr. Manoj Kumar was present when the alleged ‘Full and Final Settlement Agreement’ dated 18.12.2015, and the cheque was signed. However, her signatures are missing on the said agreement, as compared to other agreements signed on stamp papers and duly witnessed.

(r) Mr. Manoj Kumar obtained a copy of the said police complaint via RTI, which nowhere mentions the purported agreement dated 18.12.2015 and is attached as Annexure R-11. Further, the said agreement finds no mention in the legal notice issued by the Petitioner through his counsel or in the court proceedings under Section 138 of the Negotiable Instruments Act, which is marked and attached as Annexure R-12 colly, along with the corresponding reply.

(s) It was also brought to the notice that in the police complaint filed on 03.11.2016, the total payment due to the Petitioner was stated to be Rs. 2,43,72,860/-, whereas according to the agreement dated 18.12.2015, the claim is Rs. 5,16,22,860.

(t) The said forged agreement was produced by the Petitioner for the first time during the course of investigation carried out by the police, where the police recorded the statements of Mr. Manoj Kumar and others, and it was concluded that:

i. There was no truth in the allegations made by Mr. Ajay Dhawan.

ii. The agreement dated 25.09.2013 was signed with the consent of both the parties.

iii. No faith was imposed in the forged cheque or agreement dated 18.12.2015, and it was noted that no mention of this alleged agreement was even made in the original complaint.

(u) The original agreement dated 25.09.2013 was entered into between the Petitioner as well as other members of his family, whereas the alleged agreement dated 18.12.2015 is entered into only between the company and the Applicant, to the exclusion of all others.

The Petitioner/Financial Creditor’s right to file a rejoinder was forfeited by this Bench vide order dated 09.01.2020.

The Petitioner/Financial Creditor filed short written submissions vide diary no. 00547/2 dated 15.05.2023, wherein the facts of the application have been reiterated.

The Ld. Counsel for the Respondent Company/Corporate Debtor filed its short written submissions vide diary no. 00547/1 dated 30.01.2023 and has reiterated the facts of the reply.

The Ld. Counsel for the Petitioner/Financial Creditor submitted the copies of the Judgments relied upon, vide diary no. 00547/4 dated 10.02.2024. Reliance has been placed upon the following judgments:

(a) Innoventive Industries Limited Vs. ICICI Bank and Another, (2018) 1 Supreme Court Cases 407;

(b) E.S. Krishnamurthy and Others Vs. Bharath Hi-Tech Builders Pvt Ltd. (2022) 3 Supreme Court Cases 161;

(c) Mobilox Innovations Pvt. Ltd. Vs. Kirusa Software Private Limited, (2018) 1 Supreme Court Cases 353;

(d) Allahabad Bank Vs. Poonam Resorts Limited, 2020 SCC Online NCLAT 1068

Written submissions were further filed by the Ld. Counsel for the Respondent Company/Corporate Debtor vide diary no. 00547/5 dated 11.01.2024. Reliance has been placed upon Hon’ble Supreme Court’s judgment in the case of Anuj Jain vs. Axis Bank Limited and Ors. reported as (2020) 8 SCC 401, attached as Annexure A, wherein the Apex Court while discussing the basic elements for a debt to be treated as a ‘financial debt’, observed:

“43. Applying the aforementioned fundamental principles to the definition occurring in Section 5(8) of the Code, we have not an iota of doubt that for a debt to become ‘financial debt’ for the purpose of Part II of the Code, the basic elements are that it ought to be a disbursal against the consideration for time value of money.

….the requirement of existence of a debt, which is disbursed against the consideration for the time value of money, in our view, remains an essential part even in respect of any of the transactions/dealings stated in Sub-clauses (a) to (i) of Section 5(8), even if it is not necessarily stated therein.

…. In yet other words, the essential element of disbursal, and that too against the consideration for time value of money, needs to be found in the genesis of any debt before it may be treated as ‘financial debt’ within the meaning of Section 5(8) of the Code.

8.1   Reference is also made to the Hon’ble NCLT, New Bench’s decision in the matter of Prayag Polytech Private Limited vs. Gem    Batteries    Private    Limited,    reported    as

MANU/NC/0051/2019, which is marked as Annexure B, wherein it was observed that:

“10. Certain essential conditions are required to be satisfied by a financial creditor seeking to invoke the provisions of CIRP as against the Corporate Debtor before this Tribunal taking into consideration Section 5(7), Section 5(8) read with Section 7 of IBC, 2016 can take cognizance of it:

i. There must be disbursal of loan amount;

ii. Such disbursal should be made for a consideration for time value of money; and

iii. A default should have arisen either in the payment of interest or in the payment of principal amount or both on the part of the Corporate Debtor.

The above conditions are to be cumulatively satisfied with by the Financial Creditor before this Tribunal can admit the petition and as a consequence unfold the CIRP as against the Corporate Debtor. The petitioner is thereby required to satisfy this Tribunal that all the above 3 conditions are cumulatively satisfied by furnishing documents to the said effect, only the first condition namely, disbursal of money to the Respondent/Corporate Debtor is evidenced by bank statement.”

The above mentioned judgment has been upheld by the Hon’ble NCLAT in its judgment reported as MANU/NL/0467/2019, which is marked and attached as Annexure C.

During the course of arguments, the Ld. Counsel for the Petitioner/Financial Creditor has contented that the Petitioner had lent financial assistance to the Respondent Company, but it has failed to honor its commitment and has defaulted in the payment of an amount of Rs. 5,16,22,860/- as stipulated in the full and final agreement dated 18.12.2015. Since the debt and default are proved and the petition is within the period of limitation, the present petition may be admitted for initiating CIRP against the Respondent Company/Corporate Debtor.

9.1 On the other hand, the Ld. Counsel for the Respondent Company/Corporate Debtor has argued that the present petition does not come within the purview of Section 7 of the Code, as the Petitioner/Financial Creditor had failed to establish as to how the Respondent Company owes a debt to the Petitioner, and it does not fall within the definition of financial debt under Section 5(8) of the Code. Since the amount taken from the Petitioner has already been returned on 07.05.2015, thus, there is no default. It is also alleged that the full and final settlement/agreement dated 18.12.2015 and cheque no. 861414 dated 01.10.2016, both are forged and fabricated documents presented as evidence. Similarly, the allegations levied by the Petitioner against Manoj Kumar in the criminal complaint filed with the police are also not proved. Hence, the present petition lacks merit and deserves dismissal.

We have heard the Ld. Counsels for both parties and gone through the facts and materials of the case available on record. Now we would like to examine the issues involved:

10.1 The first issue is whether there was a debt advanced to the Petitioner/Financial Creditor and any liability is owed by the Respondent Company/Corporate Debtor towards the Petitioner. It is observed in the case of Respondent/Corporate Debtor that the unsecured loan of Rs. 49,50,000/-was advanced by the Petitioner/Financial Creditor in 2012, which was repaid on 07.05.2015, in entirety, and no other transaction was entered into between the parties. No liability stands reflected as payable towards the Petitioner/Financial Creditor in the duly audited books of accounts of the Respondent Company. Also, on the request of Dhawan family, the Gupta family bought the entire shareholding of the Dhawan family in the Respondent Company in the year 2013, which was duly entered and recited in an agreement dated 25.09.2013, duly stamped and signed by the parties and the witnesses. In furtherance of the said agreement, cheques were issued by Mr. Manoj Kumar and Mrs. Neeru Gupta to the Petitioner/Financial Creditor. Additionally, a property at Sirhind Road, Patiala, was also transferred to Mrs. Shallu Dhawan, the wife of Mr. Sanjay Dhawan, the brother of the Petitioner.

Thus, the above mentioned series of transactions establishes that the amount advanced by the Petitioner/Financial Creditor stands paid, and no amount is owed to the Petitioner/Financial Creditor by the Respondent Company/Corporate Debtor.

10.2 The second issue is whether the full and final settlement/agreement dated 18.12.2015 could be relied upon to determine any liability of the Respondent Company/Corporate Debtor towards the Petitioner/Financial Creditor. It is observed that the first agreement dated 25.09.2013, which entailed the purchase of the shareholding of the Dhawan family in the Respondent Company, was duly stamped and signed in the presence of four mediators/common acquaintances, who also signed the agreement as witnesses. Whereas, the full and final settlement/agreement dated 18.12.2015 is witnessed by no one except the wife of Mr. Manoj Kumar, as alleged by the Petitioner in his police complaint, but her signatures are also missing on the agreement. It is also pertinent to mention that the previous agreement dated 25.09.2013 was duly stamped, whereas the purported full and final settlement/agreement dated 18.12.2015 is unstamped and lacks such credibility. Also, the letterhead on which the agreement dated 18.12.2015 is signed was used by the Respondent Company in the year 2006, which has changed over the years and is different from the one used by the Respondent Company in the year 2015.

10.3 It is also pertinent to note that the said full and final settlement/agreement dated 18.12.2015 also finds no mention in the police complaint dated 03.11.2016, filed by the Petitioner/Financial Creditor, or in the complaint filed under Section 138 of the Negotiable Instruments Act, 1881, or in the legal notice dated 30.12.2016, issued to the Respondent Company/Corporate Debtor by the Petitioner/Financial Creditor.

Apart from this, the amount claimed under this disputed agreement dated 18.12.2015 does not fall under the definition of a financial debt under Section 5(8) of the Code. For ready reference, Section 5(8) of the Code is reproduced as under:

(8) "financial debt" means a debt alongwith interest, if any, which is disbursed against the consideration for the time value of money and includes—

(a) money borrowed against the payment of interest;

(b) any amount raised by acceptance under any acceptance credit facility or its de-materialised equivalent;

(c) any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;

(d) the amount of any liability in respect of any lease or hire purchase contract which is deemed as a finance or capital lease under the Indian Accounting Standards or such other accounting standards as may be prescribed;

(e) receivables sold or discounted other than any receivables sold on nonrecourse basis;

(f) any amount raised under any other transaction, including any forward sale or purchase agreement, having the commercial effect of a borrowing;

(g) any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price and for calculating the value of any derivative transaction, only the market value of such transaction shall be taken into account;

(h) any counter-indemnity obligation in respect of a guarantee, indemnity, bond, documentary letter of credit or any other instrument issued by a bank or financial institution;

(i) the amount of any liability in respect of any of the guarantee or indemnity for any of the items referred to in sub-clauses (a) to (h) of this clause;

The Ld. Counsel for the Respondent Company/Corporate Debtor has rightly placed reliance upon the authority in Anuj Jain vs. Axis Bank Limited and Ors. (supra), wherein it is held that:

…. In yet other words, the essential element of disbursal, and that too against the consideration for time value of money, needs to be found in the genesis of any debt before it may be treated as ‘financial debt’ within the meaning of Section 5(8) of the Code.

Thus, disbursal and default is not proved at all on the basis of the said agreement dated 18.12.2015 and the amount claimed is not proved to be for the time value of money.

10.4 The third issue, whether cheque no. 861414 dated 01.10.2016 amounting Rs. 2,43,73,000/-, is post dated and forged or is indeed signed by Manoj Kumar, it is evident from the Respondent Company/Corporate Debtor’s submission, that Manoj Kumar handed over undated cheques bearing no. 861411-861414 to the Petitioner/Financial Creditor way back in the year 2006, since Manoj Kumar was traveling abroad from 26.08.2006-02.09.2006, and the said cheques were duly used and encashed by the Petitioner/Financial Creditor during the year 2006, except cheque no. 861414. Further, the Respondent Company/Corporate Debtor requested ICICI Bank on 09.10.2015, to cancel all the cheques issued from their current A/C which were older than two years from the date of said request, which was duly accepted by the bank, and confirmation of the same is also attached as Annexure R-5 to the reply filed by the Respondent Company/Corporate Debtor. Moreover, in view of the notification issued by the RBI in the years 2011-2012, in respect of reducing the validity of a cheque from 6 months to 3 months, new cheque books were issued in furtherance of the said notification. Thus, the cheque issued by the bank in 2006 was rendered invalid in 2016, and there was no occasion for the said cheque to be encashed by the Petitioner/Financial Creditor.

10.5 It may be noted that the police complaint dated 03.11.2016, filed on the allegations of forgery and coercion by the Petitioner/Financial Creditor against Manoj Kumar, was also closed with the conclusion that no offence was committed by Manoj Kumar and no truth was found in the allegations levied by the Petitioner/Financial Creditor against Manoj Kumar.

Lastly, it is worthwhile to mention that no rejoinder to the reply of the Respondent Company/Corporate Debtor has been filed by the Petitioner/Financial Creditor, despite several opportunities, and ultimately his right to file a rejoinder was struck off vide order dated 09.01.2020. Taking into consideration the law of pleadings, when the pleas of the purported agreement dated 18.12.2015, being forged and cheque no. 861414 dated 01.10.2016 being misused and the date of issuance is forged, are not rebutted without filing of the rejoinder, which amounts to admission on the part of the Petitioner/Financial Creditor. The authorities (supra) relied upon by the Ld. Counsel for the Petitioner/Financial Creditor are not applicable to the facts and circumstances of the case in hand.

As a sequel to the above discussion and reasons recorded here before, we arrive at the conclusion that the documents on the basis and strength of which the petition under Section 7 of the Code is preferred, are proved to be false and fabricated and do not establish disbursal and default of the alleged financial debt. Accordingly, the present petition lacks merit and is liable to be dismissed.

Hence, the petition is dismissed with costs. File to be consigned to the records.