AI Drafter 
TaxTMI 
TaxTMI 
2022 (12) TMI 608
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.... Debtor) has been dismissed. 2. In brief, the Appellant filed an application on 04.10.2018 under Section 7 of the Code on Form 1 in which the column required to be filled up about the particulars of the proposed IRP (Part-3) has been left out as N.A. The particulars of financial debt (in Part IV) are provided to the effect that the Corporate Debtor had approached the Appellant for an inter corporate deposit of a sum of Rs. 10,00,000/- for a period of 90 days. The said amount was disbursed on 25.10.2017 by RTGS transfer made to the bank account of the Corporate Debtor. The inter corporate deposit was to be repaid in a period of 90 days and it would carry an interest @ 16.5 % per annum. The Corporate Debtor, after receipt of that amount issued a postdated cheque of the principal sum and also executed a letter of acknowledgement dated 25.10.2017. It is further alleged that the term of 90 days ended on 22.01.2018 and the interest amount of Rs. 40,685/- was paid after deducting TDS but instead of repaying the principal amount of Rs. 10,00,000/- the Corporate Debtor sought for renewal of the deposit term, therefore, post-dated cheque of Rs. 10,00,000/- bearing no. 000117 dated 23.01.2....
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....ion. As a matter of fact, the Adjudicating Authority was of the view that there were lot of infirmities in the pleadings of the Appellant which were not supported by any evidence which could prove the amount in question to be a financial debt. It was also observed that there was no attempt made by the Appellant to recall the alleged debt by writing even a simple letter before filing the application. As a consequence, the application was dismissed because the Adjudicating Authority was of the view that the initiation of CIRP against the Corporate Debtor would carry an adverse effect and it cannot be initiated in arbitrary and mechanical manner. 4. Aggrieved against the aforesaid findings of the Adjudicating Authority the present appeal has been preferred. During the pendency of this appeal, the Appellant filed I.A. No. 3259 of 2022 seeking permission to place on record two additional documents as Annexure A1 and A2. Annexure A1 is the copy of the extract of bank statement of the Appellant reflecting the RTGS transfer to the Respondent and Annexure A2 is the written communication by proposed interim resolution professional dated 21.11.2019. 5. The Respondent contested the appli....
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....-3 deals with the particulars of proposed IRP. The Applicant has to provide the name, address, email address and the registration number of the proposed IRP. However, the Applicant/Appellant, in the application filed under Section 7 of the Code (Form-1) filled up Part-3 in the following manner:- Particulars of the proposed Interim Resolution Professional 1. Name, Address, E-mail Address & The Registration Number of The Proposed Interim Insolvency Resolution Professional N.A. 5. The Appellant has also averred in Part-4 of the application (Form-1) as under: Particulars of Financial Debt 1. Total amount of debt granted date (s) of disbursement. The corporate debtor had approached the financial creditor for an inter Corporate Deposit for a sum of Rs. 10,00,000/- for a period of 90 days. The said loan amount was disbursed by the Financial Creditor to the Corporate Debtor on the 25th October 2017 vide a RTGS transfer made to the Corporate debtor's bank i.e. Industrial Bank Limited, IFSC code No. INDB000075, A/c No. - 201001648790 under UTR No. HDFCR5201710255646909. The terms of the inter corporate deposit were that the same was to be repaid in a period of 90 d....
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....n the Code or Rules. It is also argued that Form-2 contains the date as 21.11.2019 whereas the application under Section 7 was filed much earlier. It is further submitted that the Applicant/Appellant has rather averred in the Application in Form-1 that the said part does not apply to it as it has alleged as N.A. He has also argued that the Appellant should have filed an application before the Adjudicating Authority to seek amendment of the application (Form-1) so far as Part-3 is concerned if the consent of IRP was obtained on 21.11.2019 but since there was no pleadings, therefore, evidence beyond pleadings cannot be adduced by the Appellant by way of placing on record Annexure-2 (consent) of the IRP. 8. We have heard Counsel for the parties and perused the record with their able assistance. 9. Before we advert to the question as to whether the application filed by the Appellant by which he wanted to place on record Annexure A2 can be allowed or not. It would be relevant to refer to Section 7 of the Code which says that: "Section 7: Initiation of corporate insolvency resolution process by financial creditor. *7. (1) A financial creditor either by....
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....me of the resolution professional proposed to act as an interim resolution professional; and (c) any other information as may be specified by the Board. (4) The Adjudicating Authority shall, within fourteen days of the receipt of the application under sub-section (2), ascertain the existence of a default from the records of an information utility or on the basis of other evidence furnished by the financial creditor under sub-section (3). 4[Provided that if the Adjudicating Authority has not ascertained the existence of default and passed an order under sub-section (5) within such time, it shall record its reasons in writing for the same.] (5) Where the Adjudicating Authority is satisfied that- (a) a default has occurred and the application under sub-section (2) is complete, and there is no disciplinary proceedings pending5 against the proposed resolution professional, it mayJ1, by order, admit such application; or (b) default has not occurred or the application under sub-section (2) is incomplete or any disciplinary proceeding is pending5 against the proposed resolution professional, it may, by order, reject such applic....
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....ATE PERSON (WHERE APPLICATION IS UNDER CHAPTER IV OF PART II OF THE CODE)] Part-III PARTICULARS OF THE PROPOSED INTERIM RESOLUTION PROFESSIONAL 1. NAME, ADDRESS, EMAIL ADDRESS AND THE REGISTRATION NUMBER OF THE PROPOSED INTERIM RESOLUTION PROFESSIONAL Part - IV PARTICULARS OF FINANCIAL DEBT 1. TOTAL AMOUNT OF DEBT GRANTED DATE(S) OF DISBURSEMENT 2. AMOUNT CLAIMED TO BE IN DEFAULT AND THE DATE ON WHICH THE DEFAULT OCCURRED (ATTACH THE WORKINGS FOR COMPUTATION OF AMOUNT AND DAYS OF DEFAULT IN TABULAR FORM) Part-V PARTICULARS OF FINANCIAL DEBT [DOCUMENTS, RECORDS AND EVIDENCE OF DEFAULT] 1. PARTICULARS OF SECURITY HELD, IF ANY, THE DATE OF ITS CREATION, ITS ESTIMATED VALUE AS PER THE CREDITOR. ATTACH A COPY OF A CERTIFICATE OF REGISTRATION OF CHARGE ISSUED BY THE REGISTRAR OF COMPANIES (IF THE CORPORATE DEBTOR IS A COMPANY) 2. PARTICULARS OF AN ORDER OF A COURT, TRIBUNAL OR ARBITRAL PANEL ADJUDICATING ON THE DEFAULT, IF ANY (ATTACH A COPY OF THE ORDER) 3. RECORD OF DEFAULT WITH THE INFORMATION UTILITY, IF ANY (ATTACH A COPY OF SUCH RECORD) 4. DETAILS OF SUCCESSION CERTIFICATE, O....
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....fessional for appointment as an IRP and enclose the said consent with the application in terms of Rule 4, 6 or 7, as the case may be. But when the application under Section 7 of the Code was filed by the Appellant, no consent was apparently taken as it was not intended by the Appellant that is the reason that it has been categorically mentioned in Part-3 of Form-1 that the said part of form is not applicable to the case of the Appellant. However, Section 7(3) of the Code clearly provides that "the financial creditor shall, alongwith the application furnish-(a) record of the default recorded with the information utility or such other record or evidence of default as may be specified; (b) the name of the resolution professional proposed to act as an interim resolution professional; and (c) any other information as may be specified by the board." If the scheme of the Code provides that in case the Appellant intends to appoint the IRP itself without the help of the Adjudicating Authority then it has to give proposed name of the IRP and also take consent of the said IRP in form-2 which is required to be appended with Form-1 and the particulars have to be mentioned in Part 3 of Form 1. B....
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....event, the purported transaction is nonest and void. It is denied that the corporate debtor sought for renewal or that there was a second term as alleged or at all. It is denied that any payment was required to be made as alleged or at all. It is denied that the Corporate Debtor owes the sums mentioned or any part thereof or any interest, at any rate, as alleged or at all. It is denied that there has been any default as alleged or at all. The contents of the purported statement being Annexure E are incorrect and are denied" 8. Counsel for the Appellant has further argued that even in the reply to the memo of appeal the amount disbursed has been admitted by the Respondent that it was for the purpose of procuring dry fruits and pulses to be supplied to RSP Agencies Pvt. Ltd. using the expertise of the Respondent. It is further submitted that the amount of Rs. 10,00,000/- was transferred from the HDFC Bank account of the Appellant to the account of the Respondent and that from the acknowledgement dated 25.10.2017, it is proved that amount has been taken by the Respondent. As regards, the other infirmities in the application filed under Section 7 of the Code, it is submitted that it....