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2019 (9) TMI 1690 - NATIONAL COMPANY LAW TRIBUNAL PRINCIPAL BENCH NEW DELHIMaintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- The objection on the maintainability of Section 7 application cannot sustain, as the order of admission or the order of appointment of liquidator will not create any bar on the applicability of the provisions of IBC to the proceedings instituted under the Code. Till the company is ordered to be wound up i.e. the final dissolution order is passed; Adjudicating Authority can entertain a petition filed under the Code. In the present case respondent company has acknowledged receipt of Rs. 91,54,819/- disbursed through four RTGS transactions during July 2011. Besides MoU and buyer's agreements were executed between the parties in the year 2011. The applicant was allotted Unit No. 306 & 307 with super area of 3500 sq. ft. at 'Gateway Tower'. The applicant therefore comes within the definition of home buyer. Besides as per the agreement the respondent was liable to pay assured return. The loan was disbursed against the consideration for time value of money with a clear commercial effect of borrowing - Respondent has defaulted in paying the assured returns nor has handed over the possession of the units to the applicant. Moreover, the winding up order passed against the respondent company itself, is a record of default by the respondent corporate debtor. As per the Explanation to sub-section (1) of Section 7 the default can be to any financial creditor to the entity and not restricted to the creditor who triggers the insolvency resolution process. It is thus seen that the applicant 'financial creditor' has placed on record sufficient evidence in support of the claim as well as to prove the default. The spirit of the Code encourages resolution as against liquidation. Resolution is the rule; whereas liquidation is to be an exception. The object of the Code is to promote resolution over liquidation. Until option of resolution is exhausted, liquidation ought not to follow and therefore every effort must be made to try and see that resolution is made possible. Liquidation can only be allowed upon failure of resolution process - the petitioner being a financial creditor can invoke Corporate Insolvency Resolution Process under Section 7 of the Code against the respondent corporate debtor (in liquidation) as default in repayment of the financial debt is established. The present application under Section 7 of the Code for initiative Corporate Resolution Insolvency Process has been filed by petitioner financial creditors in Form-1 in terms of Rule 4 of Insolvency and Bankruptcy (application to Adjudicating Authority) Rules, 2016 accompanied with required information, documents and records as prescribed under the Rules. Petition admitted - moratorium declared.
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