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2020 (5) TMI 276 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - application rejected on the ground that it is barred by limitation and no financial debt is in existence - HELD THAT:- If there is a debt and default, normally the Adjudicating Authority is bound to admit the application provided the "corporate debtor" with evidence takes plea that it is not payable in law or in fact. Time Limitation - HELD THAT:- The matter relating to the Income-tax pending with the office of the Assistant Commissioner of the Income-tax, Chennai, whereby letter dated June 26, 2012, the Assistant Commissioner of Income-tax referred to the balance-sheet of "M/s. Radha Exports (India) P. Ltd." showing therein the name of Smt. Shobha Jayaram (the second appellant) and stated that on verification it found that a sum of ₹ 90,00,000 for loan advanced by Smt. Shobha Jayaram to the proprietary concern "M/s. Radha Exports" transferred as share application money after the incorporation of "M/s. Radha Exports (India) P. Ltd." - the demand notice was issued by the appellants to the "corporate debtor" on December 7, 2017 under the "I&B Code" to which the "corporate debtor" replied on December 14, 2017. The matter was again moved before the Adjudicating Authority which by impugned order dated April 12, 2018 passed in C. P. No. 77/IB/CB/2018 allowed to withdraw the application with liberty to the appellants to file afresh application. It is only thereafter application under section 7 was filed in Form 1 on April 25, 2018. The claim of the appellants is not barred by limitation as at appropriate stage, the appellants moved application under section 433(e) of the Companies Act, 2013 for winding up of the company. In view of the amendments made, the "I and B Code" was given effect and section 433 having been deleted from the Companies Act, 2013, the appellants had no other option but to move an application under the provisions of the "I and B Code". Financial creditors or not - HELD THAT:- Admittedly, the amount as shown by the Assistant Commissioner of Income-tax amounting to ₹ 90,00,000 shows that the amount is disbursed by the second appellant-Smt. Shoba Jayaram for consideration of time value of money and it is subsequently converted as share application money of the "corporate debtor". However, no share was issued by the "corporate debtor" in spite of the demand notice - In that view of the matter, the appellants not being the "operational creditors", there was no occasion for them to issue demand notice under section 8(1) and for the said reason, if the Adjudicating Authority allowed them to withdraw the application under section 9 of the "I and B Code" to enable the appellants to file application under section 7, we hold that sub-sequent application was maintainable, as we find that financial debt is payable to the appellants, particularly the second appellant as there is a default and the "corporate debtor" has failed to make out a case that it is barred by limitation and is not payable in law, we hold that this was a fit case for Adjudicating Authority to admit the application under section 7 and initiate "corporate insolvency resolution process" against "M/s. Radha Exports (India) P. Ltd". The Adjudicating Authority having failed to notice the aforesaid fact while wrongly erred that the appellants are not "financial creditors", we set aside the impugned order dated December 19, 2018 and remit the case to the Adjudicating Authority, Chennai with direction to admit the application after notice to the "corporate debtor" so as to enable the "corporate debtor" to settle the claim prior to the admission of application under section 7 of the "I and B Code" - Appeal allowed.
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