2017 (9) TMI 1608 - Tri - Companies Law

Appeal dismissed in insolvency case based on dishonored cheques and debt default.

M/s. R.G. Shaw & Sons Private Limited & Anr. Versus M/s. Naviplast Traders Private Limited & Ors.

M/s. R.G. Shaw & Sons Private Limited & Anr. Versus M/s. Naviplast Traders Private Limited & Ors. - TMI Issues:Admission of application under Section 7 of the Insolvency & Bankruptcy Code, 2016 based on dishonored cheques and debt default. Validity of the application under Section 7 and compliance with procedural requirements.Analysis:The appeal was filed against an order admitting an application under Section 7 of the Insolvency & Bankruptcy Code, 2016 by the Adjudicating Authority. The Respondent, a financial creditor, initiated proceedings under Section 138 of the Negotiable Instruments Act due to dishonored cheques. The Appellant argued that this should be a ground to reject the application. However, the Tribunal agreed with the Adjudicating Authority that the debt and default existed, making the application valid. The Appellant claimed the loan amount was taken with no specific repayment date stipulated, but acknowledged the due payment to the financial creditor. The Appellant's plea that the loan repayment terms were to be renewed was rejected as there was no agreement to support this claim.The Appellant contended that the Form 1 for the application was not in accordance with Section 7 and related rules. However, the Tribunal found the application was filed by an authorized representative of the financial creditor, meeting the requirements. The Appellant also argued that details of security should have been provided in the form, but the Tribunal deemed it unnecessary as no court orders or pending suits were applicable. The Tribunal concluded that the impugned order was legal, and the application by the financial creditor was proper and complete, leading to the dismissal of the appeal. No costs were awarded in the case due to lack of merit.