2018 (6) TMI 850 - AT - Insolvency and Bankruptcy

Appeal Dismissed: Importance of Compliance in Insolvency Cases

The Appellate Tribunal dismissed the appeal against the Adjudicating Authority's order admitting the application under Section 7 of the Insolvency and ... Corporate insolvency procedure - Held that:- Corporate Debtor availed three credit facilities from the Respondent total amounting to ₹ 23,25,00,000/-. Total outstanding amount as on 31.07.2017 was ₹ 15,95,00,000/- when the Corporate Debtor declared NPA-07.09.2013 in December, 2015 quarter. There being the debt and Corporate Debtor having defaulted to pay the amount, we are not inclined to grant any relief in this appeal. The appeal is accordingly dismissed. Issues:1. Defects in the application preferred by the Respondent (Financial Creditor)2. Discrepancies in the particulars regarding the loan accounts3. Alleged errors in the total area of the project land4. Default on credit facilities by the Corporate DebtorAnalysis:The Appellate Tribunal addressed various issues in the appeal against the order passed by the Adjudicating Authority admitting the application under Section 7 of the Insolvency and Bankruptcy Code, 2016. The Appellant contended that there were defects in the application by the Financial Creditor, specifically pointing out discrepancies in the particulars regarding the loan accounts. However, the Appellant failed to specify the exact defects in the application. Additionally, it was argued that the statement of term loan accounts was not attached to substantiate the amount due, and the copies of entries did not comply with the Bankers Books of Evidence Act, 1891. Moreover, the total area of the project land was allegedly misrepresented. Despite these arguments, the Appellate Tribunal noted that the Financial Creditor had enclosed other records of default, which were acknowledged by the Adjudicating Authority.Furthermore, the record revealed that the Corporate Debtor had availed three credit facilities from the Respondent, totaling a significant amount. The outstanding sum on a specific date was highlighted, along with the declaration of the Corporate Debtor as a Non-Performing Asset (NPA) in a previous quarter due to default. Considering the debt and the default by the Corporate Debtor, the Appellate Tribunal declined to provide any relief in the appeal and subsequently dismissed it without imposing any costs.In conclusion, the Appellate Tribunal's decision was based on a thorough examination of the issues raised by the Appellant regarding the application by the Financial Creditor and the default on credit facilities by the Corporate Debtor. The judgment emphasized the importance of complying with legal requirements and providing accurate documentation in insolvency proceedings under the I&B Code.