TaxTMI 
TaxTMI 
2021 (3) TMI 124
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....ated Corporate Insolvency Resolution Process (for short 'CIRP') against Vidharbha Industries Power Limited (Corporate Debtor) by filing Application under Section 7 of Insolvency and Bankruptcy Code, 2016 (for short 'I&B Code'). It happened sometime in January 2020. The Corporate Debtor filed IA No.570 of 2020 in the aforesaid Company Petition being CP(IB) No.264/MB/2020 seeking stay of further proceedings in the Company Petition by projecting its inability in servicing the debts in respect whereof default was alleged by the Financial Creditor by projecting disputes between the Corporate Debtor and the recipient of energy as well as change in supply chain management of the recipient of energy hindering it from carrying on its business, in re....
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....the recovery of dues before Hon'ble Apex Court and MERC are substantial in nature and sufficient to repay the dues of the Respondent/Financial Creditor. According to Appellant/ Corporate Debtor there has been delay in adjudication of the legal matters for which it could not be penalized by way of admission of CIRP initiated at the instance of Respondent. According to Appellant the dues of Respondent/ Financial Creditor payable by the Appellant/ Corporate Debtor are approximately Rs. 553 crores. 3. It is submitted on behalf of Appellant that Appellant's petition before MERC for revision of tariff was disallowed by MERC vide order dated 20th June, 2016 and the Appellant had filed Appeal No.192 of 2016 before APTEL against MERC's order dated ....
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....ellant that MERC delayed its verdict for over two years causing unprecedented financial stress to Appellant. It is further submitted that the Respondent is pursuing substitution under PPA before Hon'ble Apex Court while simultaneously pursuing the CIRP in I&B proceedings initiated against the Appellant. The Appellant intends to settle the dues of Respondent by way of its recovery from the pending Hon'ble Supreme Court Appeal and this Appeal is not intended to stall or delay the CIRP proceedings initiated under Section 7 of I&B Code. It is submitted that the admission and continuation of Section 7 proceedings would be prejudicial to all stake holders of Corporate Debtor including the Respondent-Financial Creditor and five other Public Sector....
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.... confronted by the Power Sector resulting in inflicting of heavy financial loss to the power generating Companies like the Appellant, been able to stall the CIRP proceedings initiated by the Respondent (Financial Creditor) against it by filing Application under Section 7 of I&B Code. It is flabbergasting to find that by raising the liquidity issue and pending litigation proceedings the Corporate Debtor put a spoke in the wheel of Corporate Insolvency Resolution Process stalling its commencement at the hands of Adjudicating Authority who was required, in terms of mandate of Section 7(4) & (5) of I&B Code to pass an order of admission or rejection of such Application within fourteen days of the receipt of the Application. The relevant provisi....
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.... Application. The existence of default in respect of financial debt would be ascertainable from the records of an Information Utility or on the basis of other evidence furnished by the Financial Creditor. Where the Adjudicating Authority is satisfied that there is no financial debt payable in law or infact or that default has not occurred, it may reject such Application but if the Application is incomplete, the Financial Creditor has to be provided an opportunity of rectifying the defect in the Application within seven days of notice received from the Adjudicating Authority. All that should be present to the mind of Adjudicating Authority is that there is an obligation on the part of Corporate Debtor to pay the financial debt and that the C....
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....f law. 8. It is significant to notice that the Application filed by the Corporate Debtor seeking stay of proceedings before the Adjudicating Authority did neither dispute the existence of debt owed to the Respondent Bank nor did it raise any issue in regard to the event of default as alleged by the Respondent Bank. Its therefore, clear that debt and default are not disputed. The financial woes of the Appellant and the liquidity problems faced by it, whether forced upon it or of its own making, have no bearing on commencement of insolvency resolution and cannot be permitted to be a stumbling block in triggering of CIRP at the instance of Financial Creditor. The commencement of CIRP proceedings has already been delayed by one year much to th....