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=459906 https://www.taxtmi.com/caselaws?id=459906 Maintainability of petition - initiation of CIRP u/s 7 of IBC - Corporate debtor defaulted in the repayment of all the Credit facilities - existence of debt and default or not - effect of judgement of Hon ble Supreme Court in Dharani Sugars and Chemicals Ltd. [ 2019 (4) TMI 230 - SUPREME COURT ] - Financial Creditor refused to go ahead with the restructuring process despite the approval of the same due to the 12.02.2018 RBI circular. Effect of judgement of Hon ble Supreme Court in Dharani Sugars and Chemicals Ltd. [ 2019 (4) TMI 230 - SUPREME COURT ] - HELD THAT:- At the outset, it is pertinent to note that the decision of Hon ble Supreme Court in Dharani Sugars and Chemicals Ltd. [ 2019 (4) TMI 230 - SUPREME COURT ] wherein the circular issued by Reserve Bank of India on 12.02.2018 regarding the revised framework for the resolution of stressed assets was set aside, and all actions against the Corporate Debtor under the I B Code initiated only because of the operation of the impugned circular were declared non-est - It may be noted that the Hon ble Supreme Court has held that all the cases in which debtor have been proceeded against by financial creditors under Section 7 of the I B Code, only because of the operation of the impugned circular will be proceedings which, being faulted at the very inception, are declared to be non-est. But no bar was imposed upon the financial creditors to file a section 7 application against the defaulting financial debtor. The reason for not executing the debt restructuring scheme as well as filing of an application under section 7 of I B Code is the debt and default committed by the Corporate Debtor and not the RBI Circular dated 12.02.2018. Therefore, the present application filed under section 7 of I B Code is nowhere affected by the judgment of the Hon ble Supreme Court in Dharani Sugars and Chemicals Ltd. as it is not filed under said RBI Circular dated 12.02.2018. Existence of debt due and payable - HELD THAT:- On perusal of the documents submitted by the applicant, it is clear that on 17.01.2019, debt amounting to Rs.194,26,53,633/- is due and payable by the Corporate Debtor to the Applicant. The debt is established by the deed sanctioning the renewed limits executed on 28.09.2015 - The Applicant Bank sent a loan recall notice, dated 10.09.2018, to the Corporate Debtor recalling an outstanding amount of Rs.160,68,00,839.10 as on 31.08.2018. The CIBIL Report of Corporate Debtor dated 07.01.2019 also reflects an amount of Rs.94,46,61,982/- against working capital and term loan facilities being classified as Doubtful. Further, debt and default are admitted by the Corporate Debtor in its affidavit in reply. Therefore, the debt and default of more than Rupees One Lac are established - The application filed by the financial creditor is on proper Form 1, as prescribed under the Adjudicating Authority Rules and application is complete. Conclusion - HELD THAT:- The Application under sub-section (2) of Section 7 of I B Code, 2016 filed by the financial creditor for initiation of CIRP in prescribed Form 1, as per the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 is complete. The existing financial debt of more than Rupees One Lakh against the corporate debtor and its default is also proved. Accordingly, the petition filed under section 7 of the Insolvency and Bankruptcy Code for initiation of corporate insolvency resolution process against the corporate debtor deserves to be admitted. Petition admitted. Case-Laws IBC Thu, 10 Oct 2019 00:00:00 +0530