When amount advanced cannot be related to Section 42 of the Companies Act, 2013, the applicability of Section 42(6) cannot be pressed, the amount advances cannot be treated Share Applicating Money, Rule 2(vii) of the Companies (Acceptance of Deposit) Rules 2014 and its explanation are not attracted and cannot form the basis of Financial Debt under IBC – Rahul Maroo Vs. Bruck Pharma Pvt. Ltd. – NCLAT New Delhi

Hon’ble NCLAT held that: (i) When the amount advanced cannot be related to Section 42, the applicability of Section 42(6) cannot be pressed as is being sought by the Appellant in the present case. Similarly, Rule 2(vii) of the Companies (Acceptance of Deposit) Rules 2014 and its explanation are not attracted. Rule 2(vii) contemplates any amount received and held pursuant to an offer made in accordance with the provisions of the Companies Act, 2013. No proof of any offer made in accordance with the provisions of the Companies Act, 2013 by the Company having brought on record Rules itself cannot be held applicable. (ii) There is nothing on the record to indicate that the company at any time has issued a private placement offer. Appellant has not brought any material on record to indicate that company at any time has issued private placement offer and in pursuance of which Appellant has made any application of allotment of shares.

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