TaxTMI 
TaxTMI 
2018 (3) TMI 903
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....is the Adjudicating Authority in relation to the prayer for initiation of Corporate Insolvency Resolution Process in respect of applicant corporate debtor under sub- section (1) of Section 60 of the Code. 3. The present application has been filed by one Mr. Nikhil Alva, director and authorised representative of the applicant company for and on behalf of the applicant, M/s. Miditech Private Limited. A perusal of the board resolution dated 20th September, 2017 of the applicant M/s. Miditech Private Limited reveals that there was a resolution authorising Mr. Nikhil Alva, director of the company to file the present application on behalf of the applicant company. In the resolution it has further been resolved to make an application under the Code before the Tribunal for commencement of Corporate Insolvency Resolution Process inter alia on the ground to overcome the distress situation and also to restructure by way of adopting the corporate insolvency resolution process under the Code. 4. Needless to say that on commission of default, a Corporate Applicant can file an application with the adjudicating authority under Section 10 of the Code for initiation of Corporate Insolvency Resolut....
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....rd. 8. In addition, the applicant company has submitted that in view of the default committed by the applicant, Canara Bank has filed O.A No. 923 of 2017 before the Debts Recovery Tribunal, Delhi for recovery of the dues. 9. There is thus no dispute that the applicant company has admittedly committed default which is much more than the minimum amount of default of rupees one lakh fixed under Section 4 of the Code and therefore is entitled to file the present application in terms of sub-section (1) of Section 10 of the Code. 10. Applicant by way of affidavit dated 24.11.2017 has affirmed that corporate applicant is not disqualified in terms of provisions of Section 11 of the Code to file and maintain the application under Section 10 of the Code. The affidavit further confirms that no CIRP has ever been initiated nor any liquidation order or winding up order has been made against the applicant company. 11. Besides, in compliance of Section 10 (3) (a) of the Code read with Annex-V of Form 6 of the Rules, the applicant company has filed copies of audited financial statements of the Applicant Company for the last two financial years i.e. 2015-16 and 2016-17. In addition copy of prov....
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....in balance sheet. Ld. Counsel for applicant argued that the alleged amount has not been suddenly shown in 2016-2017 but are closing balances carried forward over the years. Applicant has annexed a chart in support of its contention. 17. Canara Bank has stated in its reply that the corporate had started its business dealings in the year 1997 and had been enjoying credit facilities from the bank. There has been apparent diversion of funds long over the years as reflected in the balance sheet. That being the case the creditor bank could have taken appropriate legal remedies against the company as per law. However instead of initiating action against the alleged diversion of fund made long over the years, the bank itself renewed the loan on 17.05.2014. Be that as it may it is open to the creditor bank to take appropriate action in consultation with the IRP against the promoters/directors etc. as per law, if they have acted in an unlawful, fraudulent and wrongful manner. 18. The Insolvency and Bankruptcy Code, 2016 is a complete Code in itself. The provisions of the Code are to be mandatorily followed. Tribunal cannot exercise the power as enshrined in Article 142 of the Constitution ....
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.... under Section 11............." 22. In view of the precedent laid by the Hon'ble Appellate Court, the stand of Canara Bank that the applicant has not come with clean hands and has suppressed facts, cannot be a ground to reject the application if it is otherwise complete. 23. The second contention of the bank is that their outstanding dues have not been correctly mentioned by the applicant company. In the present application filed under Section 10 of the Code, the Tribunal is not to adjudicate as to how much is "due". Material fact that is required to be seen here is that the default is above one lakh. Nevertheless, the respondent Bank would be entitled to lodge its entire claim before the interim resolution professional, who shall entertain the claim along with other claims as per law. 24. Respondent bank further contented that the corporate applicant has filed the present application to defeat the pending DRT proceedings lodged against the applicant company. 25. In this regard it is no longer res integra that pendency of a suit or court proceedings is no bar for initiation of insolvency proceedings under the Code. In view of the overriding effect given by the provisions of Sec....