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of <h1>Appeal allowed with 13-day delay condoned; Insolvency Code Section 7 application rejected; Jurisdiction clarified</h1> <h3>Prayag Polytech Pvt. Ltd. Versus Good Marketing and Sales Pvt. Ltd.</h3> Prayag Polytech Pvt. Ltd. Versus Good Marketing and Sales Pvt. Ltd. - TMI Issues:- Delay in preferring the appeal and its condonation- Rejection of the application under Section 7 of the Insolvency and Bankruptcy Code, 2016- Failure to show default of financial debt- Adjudicating Authority's inability to decide fraud issues- Disputed claims and counter-claims between the parties- Existence of loan agreement and memorandum of understanding- Allegations of antedated, false, and fabricated documents- Request for arbitration and objections raised- Determination of default in absence of requisite documents- Jurisdiction of Adjudicating Authority versus Criminal Court- Imposition of costs in the impugned orderDelay in Preferring the Appeal and its Condonation:The Appellant received the certified copy of the impugned order on 3rd October, 2019, and preferred the appeal on 16th November, 2019, resulting in a delay of 13 days. The delay was condoned after hearing the counsels for both parties and being satisfied with the grounds presented.Rejection of Application under Section 7 of the Insolvency and Bankruptcy Code:The Appellant filed an application under Section 7 of the Insolvency and Bankruptcy Code against the Corporate Debtor, which was rejected by the Adjudicating Authority on the grounds of failure to demonstrate default of any financial debt. The Authority also noted its inability to address fraud issues, stating that such matters fall under the jurisdiction of Criminal Courts.Disputed Claims and Counter-Claims:The Appellant asserted the existence of a balance amount and interest owed by the Corporate Debtor, supported by evidence including an Audit Report. However, the Corporate Debtor contested this, claiming the Appellant failed to fulfill obligations regarding equity investment as per a memorandum of understanding.Allegations of Antedated, False, and Fabricated Documents:The Appellant denied the existence of certain loan agreements and memorandum of understanding, alleging these documents were antedated, false, and fabricated in collusion with a director of the Corporate Debtor. The Adjudicating Authority observed these discrepancies but could not determine default due to lack of necessary documentation.Jurisdiction of Adjudicating Authority vs. Criminal Court:The Adjudicating Authority emphasized its limited jurisdiction in deciding fraud issues, highlighting that such matters are within the purview of the Criminal Courts. The Authority could not make determinations related to fraud allegations and emphasized the need for legal proceedings in the appropriate forum.Imposition of Costs in the Impugned Order:While finding no grounds to interfere with the impugned order, the Tribunal set aside the imposition of a cost of Rupees One Lakh, considering the circumstances. The appeal was disposed of with these observations, addressing the various legal and factual complexities presented during the proceedings.
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