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2018 (3) TMI 1778 - Tri - Insolvency and BankruptcyAdmissibility of petition - Initiation of Corporate Insolvency Resolution Process - corporate debtor - default in repayment of huge outstanding amount - main contention of the respondent is that the Applicant is guilty of suppression of material facts documents and information and that there is no amount due and payable by responded company to applicant bank because a serious fraud has been committed by the applicant bank - HELD THAT:- Section 7 application filed under the Code is an independent proceeding, which has nothing to do with the pendency of criminal or civil proceedings. Misappropriation of funds by CFO of the respondent company and by employees of bank, if any, has to be dealt with separately. Pendency of investigation and civil suit, in the absence of specific stay order, cannot be construed as a valid defense against triggering of Corporate Insolvency Resolution Process under the provisions of the Code. Insolvency and Bankruptcy Code, 2016 is a special law having an overriding effect on any other law as mandated under Section 238 of the Code. The statutory rights of the applicant bank satisfying the requirements of Section 7 of the Code to trigger Corporate Insolvency Resolution Process cannot be defeated on the ground of pendency of adjudication pertaining to misappropriation of funds. Once there is a debt and default, the Adjudicating Authority has no option but to admit the application filed under Section 7 of the Code, when it is complete. It is also settled law that facts which are not required to be disclosed as per the prescribed format, cannot be treated as suppression of facts. Application is admitted - moratorium in terms of Section 14 of the Code declared.
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