2006 (10) TMI 528

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....th future interest on the principal sum of Rs. 69.21 lakhs from 1st July, 2002. The Insolvency Notice was served on the Debtor on 24th December, 2003. The Debtor took out a Notice of Motion (Notice of Motion 17 of 2004) for setting aside the Insolvency Notice. The Motion was dismissed in default on 20th July, 2004. Subsequently, in Notice of Motion 174 of 2004, the earlier Motion was restored to file. In Notice of Motion 17 of 2004 which was for setting aside the Insolvency Notice, Consent Terms were arrived at between the Bank and the Judgment Debtor under which the Debtor admitted the claim of the Bank in the amount of Rs. 1.07 crores together with interest at the rate of 12.5% per annum on the principal sum of Rs. 69.21 lakhs from 1st De....

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....f Creditors. The substituted Petitioning Creditor is required to meet the definition of the expression "creditor" in the Presidency Towns Insolvency Act, 1909 and it is to be noted that Section 2(a) defines the expression "creditor" to include a decree holder .Therefore, once an Insolvency Notice was validly issued by the original Petitioning Creditor and the act of insolvency was complete upon the failure of the Debtor to comply with the requisition contained therein, the consequence of the commission of an act of insolvency must ensure to the benefit of the general body of Creditors. The fact that the original Petitioning Creditor has lost interest in the proceedings would not make any difference to the position in law; for the substitute....

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....pect thereof shall lie or be proceeded with. Under the second part which came in by way of an amendment of 1994, no suit for the recovery of money or for the enforcement of any security against the industrial company or of any guarantee in respect of any loans or advance granted to the industrial company shall lie or be proceeded with. In either case, the consent of the BIFR is required. The embargo in the second part is to a suit for recovery or for enforcement of security or any guarantee. This position was noted in a judgment of a Division Bench of this Court in Dual Singhal v. State of Maharashtra 2001 (106) Comp Cas 587. The Division Bench held that as far as proceedings against a guarantor of a loan to an industrial company are concer....