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2020 (10) TMI 1255 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - Non-performing assets - existence of debt and dispute or not - HELD THAT:- As per the practice MCA Data of the Corporate Debtor is required to be filed alongwith application filed under Section 7 of the Insolvency & Bankruptcy Code, 2016, which was not attached initially, hence, this matter was fixed for clarification for filing of the same. The MCA Data filed by the Financial Creditor showed an open charge in favour of the Bank of Baroda (the Sole Secured Financial Creditor). Such loan has been taken in the year October 2018. It is also noted that the Bank has initiated proceedings against the Corporate Debtor for recovery of outstanding debt after declaring the account of the Corporate Debtor as "Non-Performing Assets" on 02.08.2019, which also means that default in repayment of interest on cash credit and/or principal borrower amount happened almost immediately after getting the money from the bank. It is evident that this is a case where Bank has classified account of the Corporate Debtor as NPA within a period of less than one year after sanction and disbursement of the same and that too in a case of facility of nature of cash credit, which is given for working capital requirements of business entity. Such action by Bank by itself raises serious questions about the credibility and intention of the Corporate Debtor. When the factual position as regards to the financial transaction between the Financial Creditor and Corporate Debtor coupled with the financial facility obtained by the Corporate Debtor by the Bank and declaration of the same as NPA are read together, the only inevitable conclusion which could be reached without any difficulty is that the Financial Creditor has helped the Corporate Debtor to obtain loan from the Bank particularly when no material of whatsoever nature has been brought on record by the Financial Creditor to show that money was indeed given to Corporate Debtor for genuine business purpose and it made sincere efforts to realise its money which was due. Application dismissed - List this issue for hearing on 14.12.2020.
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