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Home Case Index All Cases Insolvency and Bankruptcy Insolvency and Bankruptcy + AT Insolvency and Bankruptcy - 2019 (12) TMI AT This

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2019 (12) TMI 285 - AT - Insolvency and Bankruptcy


Issues:
1. Appeal against order of Admission under Section 7 of the Insolvency and Bankruptcy Code 2016.
2. Default in repayment of dues under loan Agreement dated 1st April 2016.
3. Discrepancies in amount claimed to be in default and details of default.
4. Allegations of suppression of facts and pre-mature petition filing.
5. Disbursement and rescheduling of loan amounts by the Appellant.
6. Lack of evidence of financial debt and disbursement on 1st April 2016.
7. Allegations of presumed debt and errors in the impugned order.
8. Reliance on Supplementary Affidavit and rejection by Adjudicating Authority.
9. Violation of natural justice principles in passing the impugned order.
10. Lack of document submission to prove outstanding amount due and payable.

Analysis:
1. The appeal was filed against the order of Admission under Section 7 of the Insolvency and Bankruptcy Code 2016 due to default in repayment of dues under a loan Agreement dated 1st April 2016. The Appellant claimed that certain instalments were not paid by the Respondent, leading to the initiation of insolvency proceedings.

2. Discrepancies arose regarding the total amount claimed to be in default and the details of default provided by the Petitioner. The Respondent contended that the alleged default did not exist at the time of petition filing, citing rescheduling of loan amounts and moratorium agreements between the parties.

3. The Adjudicating Authority admitted the petition based on the previous admission by the Corporate Debtor regarding restructuring of loan amounts. However, the Appellant challenged the admission, citing lack of evidence of disbursement on 1st April 2016 and errors in the order based on presumed debt.

4. The Appellant further argued that the impugned order was passed without providing an opportunity to the Corporate Debtor to file objections, violating principles of natural justice. The Respondent failed to establish the existence of the financial debt with proper documentation.

5. Despite the submission of a Supplementary Affidavit by the Respondent, the Adjudicating Authority's reliance on it was contested by the Appellant, highlighting contradictions and lack of supporting evidence. The appeal also pointed out the rejection of the Supplementary Affidavit by the Authority.

6. The Corporate Debtor presented evidence, including bank certificates and affidavits, to prove repayment of the disbursed amount under the loan Agreement dated 1st April 2016. The Adjudicating Authority's findings of outstanding amounts were deemed erroneous and unsustainable.

7. Ultimately, the appeal was allowed, declaring all orders and actions taken by the Adjudicating Authority as illegal and setting them aside. The Corporate Debtor was released from proceedings, and the Interim Resolution Professional was directed to hand over management and records. The Authority was tasked with fixing the fee of the Interim Resolution Professional to be paid by the Financial Creditor.

 

 

 

 

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