TaxTMI 
TaxTMI 
2026 (8) TMI 1530
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....lant/CD against the order dated 29.04.2026 (impugned order) passed by National Company Law Tribunal, Bench No. 1, Ahmedabad (Adjudicating Authority) in CP IB No. 353 of 2025 whereby the petition moved by the appellant under Section 10 of the IBC, 2016 (Code) has been dismissed. 2. Brief facts necessary for disposal of this appeal are that the appellant, who is a designated partner of the Corporate Applicant-M/s Panshul Agro Food LLP filed a petition under Section 10 of the Code before the Ld. Adjudicating Authority for initiation of Corporate Insolvency Resolution Process (CIRP) and also for appointment of an Interim Resolution Professional (IRP) and also for declaration of moratorium for default in payment of debt of Rs. 42,20,27,984.96....
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....nch of this Appellate Tribunal in Pondicherry Extraction Industries Pvt. Ltd. vs. Bank of Baroda, CA (AT) (Ins) No. 471 of 2020, it is submitted that the Ld. Adjudicating Authority was only required to see the debt and default and should have confined its jurisdiction to the material which was available on record and thus material illegality has been committed by Ld. Adjudicating Authority. 8. It is further submitted that Appellant is not responsible if some of the machineries are found missing from the site as the possession was already taken by the Respondent Bank and this cannot be a ground to reject the application moved by the appellant. 9. It is further submitted that Ld. Adjudicating Authority should have issued the notices in ....
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.... which the factory is constructed belongs to the partners and their family members who are also personal guarantors and they filed Section 94 of the Code which has been rejected by the Ld. Adjudicating Authority. 15. It is further submitted that contention of the appellant that it is mandatory on the part of the Adjudicating Authority to admit the application under Section 10, on mere proof of debt and default is not correct and in this regard the law laid down by this Appellate Tribunal in Wave Megacity Centre Pvt. Ltd. vs. Rakesh Taneja & Ors., (2023) ibclaw.in 05 NCLAT, Jakhodia Traexim Pvt. Ltd., (2026) ibclaw.in 183 NCLT, has been highlighted. 16. We have heard Ld. Counsel for the parties and have perused the record and it is rev....
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....onal guarantors and they filed proceeding under Section 94 of the Code resulting in an interim moratorium (during the course of arguments it is brought to our notice that aforesaid Section 94 has been dismissed by the Ld. Adjudicating Authority). 20. We also notice that Ld. Adjudicating Authority has also noted that from the additional affidavit filed by the Appellant it emerges that during inspection conducted by the Bank on 10.02.2026 substantial plant and machinery were found missing from the factory premises and the Bank had submitted that most of the plant and machinery was present at the site during the inspection made on 13.05.2025 and this has been subsequently removed. 21. It is also noted that the Corporate Applicant failed ....
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....pursuing application under Section 10 of the Code and the timing also is of significance as when coercive action under the SARFAESI Act begins the application under Section 10 has been filed. Thus prima facie it appears that the intent of the application was not of resolution, rather it was to obtain moratorium in order to defeat the proceedings of SARFAESI Act. Moreover, we are not convinced by the submissions of ld. Counsel for the Appellant that it is mandatory for the adjudicating authority to admit the petition under Section 10 of the Code when the same alleges debt and default. In our considered opinion it is not only the jurisdiction but the duty of the Ld. Adjudicating Authority to sift the material available on record in order to a....
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....reement with the conclusion drawn by Ld. Adjudicating Authority that the application under Section 10 of the Code has been moved with malicious intent and therefore the same has been correctly dismissed and to that extent the impugned order is liable to be affirmed. 26. However, coming towards the penalty part of judgment whereby the penalty of Rs. 10 lakhs have been imposed upon the appellant, we are of the considered view that such an exercise could be undertaken when any fraudulent intent is per se evident on the face of the record and there is also a maxim of proportionality which should have been adapted for imposing penalty. The order whereby any penalty is being imposed must reflect the magnitude of the fraudulent act and the reas....