2018 (6) TMI 537

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....ugned order dated 26th October, 2017, the Adjudicating Authority (National Company Law Tribunal), Guwahati Bench, Guwahati, admitted the application, passed order of 'Moratorium' and appointed 'Resolution Professional' with certain directions. In Company Appeal (AT) (Insolvency) Nos. 292 & 293 of 2017 2. The Appellant- Mr. Aditya Kumar Jajodia, a Shareholder and Director of the Company being aggrieved has challenged the impugned order. 3. Learned counsel appearing on behalf of the Appellant submitted that the 'Financial Creditor' has already taken steps under Section 19 of the 'Recovery of Debts Due to Banks and Financial Institutions Act, 1993' (DRT Act). Further, according to him, action has been taken under Section 13(4) of the 'Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002' (the SARFAESI Act). Therefore, according to the Appellant, proceedings under the aforesaid provisions having already initiated, the application under Section 7 of the 'I&B Code' is not maintainable. 4. However, the aforesaid submissions cannot be accepted in view of the decision of this Appellate Tribunal in "M/s. Unigreen Global Private Li....

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....bsp;   xxx                                                                  xxx 20.3 The notice has been given without considering the provisions of sub-rule (3) of Rule 4 of Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016 which mandates that an application shall "dispatch forthwith", a copy of the application "filed with the Adjudicating Authority". Thereby meaning a post-filing notice and not 'before filing", the obvious purpose for the same being to put the corporate debtor to adequate and informed notice. The 'adjudicating authority' ought to have realised these deviations from the prescribed procedure and either rejected the application or directed the Respondent to follow the provisions of sub-Rule (3) of Rule 4 of Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016 and Rule 21 of....

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....5", the Hon'ble Supreme Court noticed the Scheme of Code under Section 7 which stands in contrast with the scheme under Section 9 and observed as follows: "27. The scheme of the Code is to ensure that when a default takes place, in the sense that a debt becomes due and is not paid, the insolvency resolution process begins. Default is defined in Section 3(12) in very wide terms as meaning non-payment of a debt once it becomes due and payable, which includes non-payment of even part thereof or an instalment amount. For the meaning of "debt", we have to go to Section 3(11), which in turn tells us that a debt means a liability of obligation in respect of a "claim" and for the meaning of "claim", we have to go back to Section 3(6) which defines "claim" to mean a right to payment even if it is disputed. The Code gets triggered the moment default is of rupees one lakh or more (Section 4). The corporate insolvency resolution process may be triggered by the corporate debtor itself or a financial creditor or operational creditor. A distinction is made by the Code between debts owed to financial creditors and operational creditors. A financial creditor has been defined under Section ....

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....t of a notice from the adjudicating authority. Under sub-section (7), the adjudicating authority shall then communicate the order passed to the financial creditor and corporate debtor within 7 days of admission or rejection of such application, as the case may be." 10. It is not the case of the Appellant- Mr. Aditya Kumar Jajodia that they do not owe any debt to the 'Financial Creditor' or there is no default. The Adjudicating Authority being satisfied that a default has occurred admitted the application which was complete. 11. Another ground taken by the Appellant is that the Form 7 was not signed by the authorised person. However, we are not inclined to set aside the impugned order on such ground as the application under Section 7 (in Form-1) was filed by the authorised employees of the 'Financial Creditor'. In Company Appeal (AT) (Insolvency) No. 324 of 2017 12. The Appellant- Allahabad Bank is aggrieved against part of the same impugned order dated 26th October, 2017 (Paragraph No. 84), which reads as follows: "84. On considering the submission by the parties having regard to the materials on record, it is found that the FC has established that on 11.08.201....