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2017 (12) TMI 290 - Tri - Insolvency and BankruptcyCorporate Insolvency Resolution Process - whether the petition satisfies the requirements of section 7 which provide that corporate insolvency resolution process can be initiated against a corporate debtor by attaching record of the default and proposing name of the resolution professional to act as an interim resolution professional? - Held that:- We have thoughtfully considered aforesaid submissions of the learned counsel for the petitioner-Financial Creditor and are of the view that the same are devoid of merit. The expression ‘Debt’ u/s 3(11) of the Code is a general definition and in respect of insolvency resolution and liquidation for corporate debtor section 4 provide that Part II was to be applied to matter related to insolvency and liquidation for corporate debtor where a minimum amount of default is one lac rupees and section 5 further clarifies that in part II the various expression have been defined unless the context otherwise required. The expression debt has not been used in sub-sections (7) and (8) of section 5. The expressions used are financial creditor and financial debt. Every ‘debt’ is not essentially a financial debt. Therefore the definition of expression debt cannot be imported to part II and the argument is hereby rejected. The guaranteed returns as per the provisions of clause (5.2.a) of SSA would start only after the period of five years has lapsed. The period of five years is to expire in June 2021. There could not be any default. Likewise we find no substance in the argument that in accordance with clause 5.3.1 read with clause 5.8 it could be regarded as default as no valid allotment of share has taken place and in any case period of three years and five years is yet to expire. We are further of the view that any default has not occurred in terms of section 7(5). The expression default has been defined by section 3(12) to mean non-payment of debt when whole or any part or instalment of the debt have become due and payable and the same is not repaid by the corporate debtor. In the present case the petitioner financial creditor has pleaded that no allotment of CCRPL in accordance with law has been made. As a matter of fact allotment made was to an unregistered firm and the ROC refused to register the transfer. Therefore there is no question of any default occurring. Petition fails.
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