AI Drafter 
TaxTMI 
TaxTMI 
2018 (5) TMI 1031
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.... the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 (for brevity 'the Rules') with a prayer for initiation of Corporate Insolvency Resolution Process in respect of respondent company, claimed to be the corporate debtor. 2. The applicant M/s Silverstar Fashions private Limited, claimed to be the financial creditor, is a company incorporated on 03/06/2011 under the Companies Act, 1956 having its registered office at 1-E/15, Jhandewalan Extension, New Delhi-110055. 3. Respondent M/s Orient Clothing Co. Private Limited, against whom initiation of Corporate Insolvency Resolution Process has been prayed for, is a company incorporated on 22/06/1997 under the Companies Act, 1956 having its registered office at l....
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....t letter dated 08-08-2017 to the respondent company requesting payment of outstanding dues of applicant failing which the applicant will initiate legal action against respondent company. However despite several telephonic reminders and follow up the respondent did not clear the outstanding dues of the applicant. 7. The respondent has filed its reply and raised various objections. It is submitted that the applicant has approached this tribunal with unclean hands only to arm-twist the respondent company so as to enforce the purported financial debt, which was never payable by respondent company. 8. It is stated in the reply that the present application has been filed merely on the basis of the statement of accounts having entries relate....
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.... is delineated under Section 7 of the Code, wherein only "Financial Creditor" / "Financial Creditors" can file an application. As per Section 7(1) of the Code an application could be maintained by a Financial Creditor either by itself or jointly with other Financial Creditors. Section 7 of the Code thus mandates that only the applicant "Financial Creditor" has to prove the default. In other words in order to maintain the present application filed under Section 7 of the Code for initiation of Corporate Insolvency Resolution Process in respect of respondent corporate debtor, the present applicant has to satisfy that the applicant comes within the definition of "Financial Creditor". 13. The expressions "Financial Creditor" and "Financial de....
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....tion, only the market value of such transaction shall be taken into account; any counter-indemnity obligation in respect of a guarantee, indemnity, bond, documentary letter of credit or any other instrument issued by a bank or financial institution; the amount of any liability in respect of any of the guarantee or indemnity." 14. A creditor in order to come within the meaning of "Financial Creditor" has to fulfil the following essential criteria: i. A person to whom a 'financial debt' is owned and includes a person whom such debt has been legally assigned or transferred; ii. The debt alongwith interest, if any, is disbursed against the consideration for time value of money and includes any one or more mode of disbursed ....
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....the debt claimed has become due and payable and has not been interdicted by some law. 17. Sub-section (2) of Section 7 of the Code provides that an application has to be made under sub-section (1) in such form and manner as is prescribed under the Rules. Under Rule 4 the application is made by a financial creditor in Form 1 accompanied by documents and records required therein. The stipulated format is unique requiring full particulars of transactions along with documents. Part IV of Form 1 mandates interalia to furnish dates of disbursement and amount of debt. Despite mandatory requirements of the Code and Rules, the dates and amount of various loans disbursed have not been furnished. Simply wild assertion that a huge financial assistan....