Appeal dismissed, Section 7 application upheld with debt & default findings. Resolution Plan rejection upheld.

The appeal was dismissed, upholding the Adjudicating Authority's decision to admit the Section 7 Application. The Tribunal found there was a debt and default, and the application was within the limitation period. The rejection of the Resolution Plan was upheld as it did not comply with relevant provisions of the Code.

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Issues Involved:
1. Justification of admitting the Section 7 Application.
2. Determination of default and debt amount.
3. Jurisdiction of the Adjudicating Authority.
4. Limitation period for filing the application.
5. Rejection of the Resolution Plan.

Summary:

1. Justification of admitting the Section 7 Application:
The appeal was filed by the Promoter/Shareholder of the Corporate Debtor under Section 61 of the Insolvency and Bankruptcy Code, 2016, against the order admitting the Section 7 Application filed by the Financial Creditor. The Financial Creditor, a Co-operative Society, had provided Secured Cash Credit Facility to the Corporate Debtor, which is engaged in Real Estate and Construction. The Corporate Debtor failed to repay the loan, leading to the initiation of the Company Insolvency Resolution Process (CIRP).

2. Determination of default and debt amount:
The Corporate Debtor argued that there was no default and disputed the amounts claimed by the Financial Creditor. The Financial Creditor issued multiple notices demanding repayment, which the Corporate Debtor did not honor. The Adjudicating Authority found that the Corporate Debtor was commercially insolvent and unable to pay its debts, as evidenced by the Balance Sheet for the year ending 31/03/2018.

3. Jurisdiction of the Adjudicating Authority:
The Corporate Debtor contended that the Adjudicating Authority lacked jurisdiction to determine the amount in default, arguing that this should be decided by the Registrar of Co-operative Societies. However, the Adjudicating Authority held that once the threshold debt amount is crossed, it is not required to determine the exact quantum of debt but only to ascertain the existence of debt and default.

4. Limitation period for filing the application:
The Corporate Debtor argued that the application was time-barred. However, the Adjudicating Authority found that the application was within the limitation period, as the demand for repayment was made on 04/12/2017, the notice was served on 01/03/2018, and the Section 7 Application was filed on 16/06/2020.

5. Rejection of the Resolution Plan:
The Resolution Plan submitted by the Appellant and the Suspended Directors was rejected by the Adjudicating Authority, as it did not satisfy the provisions of Section 29A(g) read with Section 240A of the Code. The Appellant's argument that the Adjudicating Authority should not have admitted the Section 7 Application was dismissed.

Conclusion:
The appeal was dismissed as devoid of merits, and the Adjudicating Authority's decision to admit the Section 7 Application was upheld. The Tribunal found that there was a debt and default, and the application was complete and within the limitation period. The rejection of the Resolution Plan was also upheld.

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