https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=444670 https://www.taxtmi.com/caselaws?id=444670 Maintainability of section 7 application - Initiation of CIRP - time barred debt or not - Amended Application filed beyond the statutory period of 3 years. The clear cut stand of the Appellant, is that, the Adjudicating Authority / Tribunal, had failed to appreciate that there was no authorisation to and in favour of Mr. J. Vijay Kumar, Asst. General Manager, who had signed the amended Petition, indeed, the requirement of specific authorisation, is mandatory, to prefer an Application, under Section 7 of the I B Code, 2016. HELD THAT:- An Application, under Section 7 of the Code, is not to be turned down, by an Adjudicating Authority / Tribunal , just on technical grounds . The reason for inability of a Corporate Debtor , to pay its Debt , is not to be looked into, by an Adjudicating Authority / Tribunal , while dealing with an Application (Filed by a Financial Creditor , under Section 7 of the I B Code, 2016). To put it differently, the situation / circumstances , under which, a Corporate Debtor , could not repay , the Financial Debt , need not be taken as a Defence , in a proceeding, under the Code - The Adjudicating Authority / Tribunal , need not wait for the determination, to be made by the Debt Recovery Tribunal . Although, Debt , is Disputed , if the Amount , is more than Rs.1 Lakh ( Rs.1 Crore , after amendment , to the Code ), the Application , under Section 7 , is maintainable in Law . It cannot be gainsaid that if a Debtor , acknowledge , receiving the Payment , but, chose to amuse itself, by denying the liability , the document , would still be one , that would keep the claim alive , within the ambit of Section 18 of the Limitation Act, 1963 . Also that, if the Sum , borrowed by the Respondent, is shown in the Balance Sheet , it may amount to an acknowledgement , and the Creditor , might have a fresh Period of Limitation , on the date on which, an acknowledgement , was made. As a matter of fact, the Balance Sheets of the Corporate Debtor , dated 16.08.2014, 27.08.2015 and 27.08.2016, the 1st Respondent / Bank, unerringly points out the admission of acknowledgment of liability , and therefore, it is established on the part of the 1st Respondent / Bank that its Claim , made in Section 7 Application , in CP (IB) No. 645 / 7 / HDB / 2018, dated 06.09.2018, but filed on 12.09.2018 (before the Adjudicating Authority / Tribunal ), is not a Time Barred one - In the instant case on hand, this Tribunal , points out on 31.08.2018, going by the Application (Filed by the 1st Respondent / Financial Creditor / Bank / Petitioner, under Section 7 of the Code, vide CP (IB) No. 645 / 7 / HDB / 2018), the Sum claimed to be in Default , was Rs.327,03,72,501.81/- (vide Page 76 of the Appellant s Appeal Paper Book, Vol-I, Form-I, Part IV - Particulars of Debt , at Page 79), from the Corporate Debtor / Vibha Agro Tech Limited . According to the 1st Respondent / Bank, the Outstanding Sum , claimed before the Interim Resolution Professional , is Rs.1,061.15 Crores. One cannot remain in oblivion of a vital fact that to commence a Corporate Insolvency Resolution Process proceedings, by the Financial Creditor , against the Corporate Debtor (under Section 7 of the I B Code, 2016), the twin requirements, (a) Debt and (b) Default, are to be proved and once they are established, then, the Application , which is complete in all respects, is to be admitted , by the Adjudicating Authority / Tribunal . In the present case on hand, the 1st Respondent / Bank, had claimed a Sum of Rs.327,03,72,501.81/- as Debt , due and payable , by the Corporate Debtor , as on 31.08.2018 (vide in its Application in CP (IB) No. 645 / 7 / HDB /2018, before the Adjudicating Authority / Tribunal ), this Tribunal , keeping in mind of the primordial fact(s) the Corporate Debtor , had tacitly Acknowledged , its Debt / Liability , in its Balance Sheets , for the Year ending 2013-14 dated 16.08.2014, for the Year ending 2014-15 dated 27.08.2015 and for the Year ending 2015-16 dated 27.08.2016, the same being not Barred by Time , taking note of the entire conspectus of the facts and circumstances of the present case, in an encircling manner, and exercising its subjective discretion, comes to a resultant conclusion that the aspect of Debt and Default , committed by the Corporate Debtor , have been duly proved by the 1st Respondent / Bank . The impugned order passed by the Adjudicating Authority ( National Company Law Tribunal , Bench I, Hyderabad) in admitting the Section 7 Application (Filed by the 1st Respondent / Bank / Financial Creditor / Petitioner), is free from any Legal Infirmities . Accordingly, the instant Appeal fails. Appeal dismissed. Case-Laws Insolvency and Bankruptcy Mon, 16 Oct 2023 00:00:00 +0530