2021 (8) TMI 584 - Tri - Insolvency and Bankruptcy

High Court Decree Upheld: Tribunal Admits Company Petition for Insolvency Resolution Process

Gannon Dunkerley & Co. Ltd. Versus Sangeeta Aviation Services Private Limited

The Tribunal found the Company Petition maintainable based on the High Court decree, dismissing the Corporate Debtor's arguments against the Financial ... Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - Petition filed on the basis of decree passed by the Hon’ble Bombay High Court against the Corporate Debtor is maintainable? - existence of debt and dispute or not - HELD THAT:- The decree passed by the Hon’ble Bombay High Court is binding on the Corporate Debtor. If at all the Corporate Debtor is aggrieved against the decree passed by the Hon’ble Bombay High Court, his remedy is only to file an appeal against the decree. It appears the time for preferring an appeal against the decree is over without any appeal being filed and thus attained finality. It is not out of place to mention here that recently the Hon’ble Supreme Court in the case of M/S. ORATOR MARKETING PVT. LTD. VERSUS M/S. SAMTEX DESINZ PVT. LTD. [2021 (8) TMI 314 - SUPREME COURT] held that stipulation of payment of interest is not a condition precedent to qualify as a financial debt. This Bench is of the considered opinion that the above Company Petition filed by the Financial Creditor basing on a decree is maintainable and is liable to be admitted - petition admitted - moratorium declared. Issues:1. Maintainability of the Company Petition based on a decree passed by the Hon'ble Bombay High Court against the Corporate Debtor.2. Legal sustainability of the defense taken by the Corporate Debtor.Analysis:1. The Financial Creditor filed a Company petition seeking to initiate Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor for defaulting on a payment of Rs. 1,32,25,753. The Financial Creditor provided financial help to the Corporate Debtor, who failed to repay despite a court order. The Corporate Debtor argued that the application was not filed under Fast Track Insolvency Resolution Process and raised discrepancies in the forms submitted by the Financial Creditor. However, the Tribunal found the petition maintainable as it fulfilled legal requirements for admission, citing precedents and the binding nature of the High Court decree.2. The Corporate Debtor contended that the Financial Creditor's claim did not constitute a Financial Debt under the Insolvency and Bankruptcy Code. The Corporate Debtor argued that the interest awarded by the High Court was compensation and not a stipulation for payment, thus not qualifying as a Financial Debt. The Corporate Debtor also disputed the Financial Creditor's status as a Financial Creditor under the Code. However, the Tribunal rejected these defenses, stating that the decree passed by the High Court was binding, and the Corporate Debtor's arguments were not legally sustainable. The Tribunal admitted the Company Petition, appointing an Insolvency Professional and ordering the initiation of CIRP against the Corporate Debtor.In conclusion, the Tribunal found the Company Petition maintainable based on the High Court decree, dismissing the Corporate Debtor's arguments against the Financial Creditor's claim. The Tribunal emphasized the binding nature of the decree and the legal requirements fulfilled by the petition, leading to the admission of the petition and the initiation of the Corporate Insolvency Resolution Process against the Corporate Debtor.