TaxTMI 
TaxTMI 
2019 (11) TMI 186
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....arch, 2019. Respondent No.3 - Mr. Rajender Kumar Girdhar, came to be appointed as Interim Resolution Professional (IRP). Being aggrieved, the Appellant - Mr. Vineet Khosla - Ex. Director of the Corporate Debtor has filed this Appeal. 2. In the Application under Section 7 filed in Form 1, Edelweiss claimed to be assignee of the loan which was taken by Corporate Debtor by way of financial assistance from Exim Bank. The bank had sanctioned financial assistance amounting to Rs. 389 Lakhs in terms of Rupee Loan Agreement. Later on, further financial assistance was extended amounting to Rs. 550 Lakhs and Foreign Currency Term Loan Agreement was also executed. Corporate Debtor executed agreement of hypothecation of movable assets and also deed of guarantee was executed. Later on immovable property was also mortgaged and charge created. 3. The Financial Creditor claimed that Exim Bank filed O.A. 177/2001 before DRT, Delhi - II. The Bank also filed O.A. 251/2003 before DRT, Mumbai - II. DRT at Mumbai passed Order with regard to payments to be made by the Corporate Debtor. The Order was passed in 2004. Settlement terms were filed in O.A. 177/2001 at DRT, Delhi between Exim Bank (the assi....
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.... financial debt. Consequently, Adjudicating Authority admitted the Application. 6. In Appeal, the Appellant for Corporate Debtor is claiming and it has been argued that following questions are involved in the present matter:- Sl. No. QUESTION POSITION/SUGGESTED ANSWER OF THE HUMBLE APPELLANT 1. Question No.1: Whether the resolution of disputes between the financial creditor and the corporate debtor can be subjected to adjudication by the Resolution Professional if they already be pending before another judicial forum, all the more so when the claim of the corporate debtor be far larger than that of the financial creditor? A resolution professional cannot fill the shoes of a judicial forum that is already seized of a dispute. 2. Question No.2: Whether the provisions of the IBC can be invoked when it is already known to the financial creditor that there is no possibility whatsoever of keeping the Company as a "going concern" while finding any resolution, and its sole aim is to liquidate the remaining assets? The primary purpose of the IBC is to provide a mechanism whereby, through resolution of the claims of the creditors, an attempt is made at the survival of the C....
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....aw for the time being in force or any instrument having effect by virtue of any such law. Once the Application under Section - 7, 9 or 10 is admitted, moratorium prohibiting the other pending actions gets attracted under Section 14. Under Section 14, institution of suits or continuing of pending suits or proceedings against the Corporate Debtor including execution of any Judgement, Decree or Order in any Court of law, Tribunal, Arbitration Panel or other authority gets hit by the moratorium and cannot be proceeded further till moratorium is in force. As such, there is no substance in the argument that if dispute is already pending in another forum, IBC cannot be invoked. 8. We find no force in the arguments that Adjudicating Authority could not have looked into the question whether the debt has been duly assigned to Edelweiss. The Adjudicating Authority referred to the documents of assignment and provisions under Section 5(7) to conclude that the financial debt had been legally assigned and Edelweiss was coming within the definition of Financial Creditor. 9. In the matter of "Edelweiss Asset Reconstruction Company Ltd. Versus Synergies Dooray Automotive Ltd. & Ors." in Company ....
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....disciplinary proceeding is pending against the proposed resolution professional, it may, by order, reject such application: Provided that the Adjudicating Authority shall, before rejecting the application under clause (b) of sub-section (5), give a notice to the applicant to rectify the defect in his application within seven days of receipt of such notice from the Adjudicating Authority." 11. In the matter of "M/s. Innoventive Industries Ltd. Vs ICICI Bank & Anr." in Company Appeal (AT) (Insolvency) No. 1 & 2 of 2017 in Judgement dated 15th May, 2017 passed by this Tribunal, it was held in Para - 52 and 53 as under:- "52. The insolvency resolution process under Section 7 or Section 9 of I&B Code, 2016 have serious civil consequences not only on the corporate debtor - company but also on its directors and shareholders in view of the fact that once the application under Sections 7 or 9 of the I&B Code, 2016 is admitted it is followed by appointment of an 'interim resolution professional' to manage the affairs of the corporate debtor, instant removal of the board of directors and moratorium for a period of 180 days. For the said reason also the Adjudicating Authority i....
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....ction 7(5), where the adjudicating authority is to be satisfied that a default has occurred, that the corporate debtor is entitled to point out that a default has not occurred in the sense that the "debt", which may also include a disputed claim, is not due. A debt may not be due if it is not payable in law or in fact. The moment the adjudicating authority is satisfied that a default has occurred, the application must be admitted unless it is incomplete, in which case it may give notice to the applicant to rectify the defect within 7 days of receipt of a notice from the adjudicating authority. Under subsection (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." From the above, it is clear that at the stage of admission of Application under Section 7, the requirement is to give limited Notice and the considerations would be to see whether or not satisfaction by Adjudicating Authority could be reflected on the basis of Sub-Section (5) of Section 7. If there is a financial debt, which is more than Rs. 1 Lakh and there is a default an....