2026 (4) TMI 221

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....yush Maheshwari, Ms. Sarrah Khambati and Mr. Sameer Pandit, Advocates for R1. ORDER This appeal has been filed in the name of corporate debtor, an objection was raised by the respondent that the appeal cannot be entertained in the name of corporate debtor. The counsel for the appellant submits that appeal be permitted to file on behalf of erstwhile Director Sh. Rajesh Jeevan Uttamchandani. This appeal is permitted to be filed on behalf of Sh. Rajesh Jeevan Uttamchandani, Erstwhile Director of Shree Sant Kripa Appliances Private Limited. The memo of appeal is thus accordingly corrected as "Rajesh Jeevan Uttamchandani, Erstwhile Director of Shree Sant Kripa Appliances Private Limited." The appellant may also place amended memo of partie....

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....sequent to the admission of CIRP and which are dated 27th November and as on date the counsel has no instruction with regard to stand of the bank on the said order. 6. We have considered the submissions of the parties and perused the records. 7. In so far as submission of the appellant that Section 7 application cannot be initiated as the recovery mechanism, reliance has been placed by the appellant in paragraph-99, 100 and 105 of the judgment which are as follows:- "99. In Swiss Ribbons Pvt. Ltd. v. Union of India reported in (2019) 4 SCC 17 this Court, speaking through R.F Nariman J., held that IBC was not a mere recovery legislation for the creditors but rather a beneficial legislation intended to revive and rehabilitate t....

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....itiated the aspect of recovery of debt is completely outside the control of the creditor and there is no guarantee of recovery or refund of the entire amount in default. A creditor initiates insolvency under the Code not for the relief of recovery of debt but rather for rehabilitating the corporate debtor and for a new management to take over. The relevant observations read as under: "It is also important to remember that the Code is not meant to be a debt recovery mechanism (see para 28 of Swiss Ribbons). It is a proceeding in rem which, after being triggered, goes completely outside the control of the allottee who triggers it. Thus, any allottee/home buyer who prefers an application under Section 7 of the Code takes the risk of h....

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....ospect of any meaningful recovery of its dues in the near future." There can be no dispute to the preposition laid down by the Hon'ble Supreme Court in the above case that Section 7 proceedings cannot be a mere recovery legislation. Proceedings of Section 7 are initiated for resolution of corporate debtor which has committed a default and there is entire mechanism under the IBC and the Regulations for resolution of the corporate debtor. Para-105 which has been relied by the appellant in the above case itself notices the risk which is taken by financial creditor for initiating IBC proceedings. 8. In the present case when corporate debtor has committed default, we are of the view that bank was fully entitled to invoke the remedy as prov....