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2020 (8) TMI 493 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - whether the Applicant is a Financial Creditor and the Debt duly payable in law by the Corporate Debtor? HELD THAT:- Application under Section 7 of IBC, the Financial Creditor to initiate CIRP against the Corporate Debtor before the Adjudicating Authority when a default has occurred. The ‘Creditor’ has been defined in Section 3(10) of IBC means any person to whom a debt is owed and includes a Financial Creditor, an Operational Creditor, a Secured Creditor, an unsecured Creditor and a Decree holder. ‘Debt’ has been defined in Section 3(11) means a liability or an obligation in respect of a claim which is due from any person and includes a Financial Debt and Operational Debt. The ‘Default’ has been defined in Section 3(12) of IBC means non-payment of debt when whole or any part or instalment of the amount of debt has become due and payable and is not paid by the Debtor or the Corporate Debtor as the case may be. In view of default made by the Respondent-Corporate Debtor, the Appellant filed the Application before the Adjudicating Authority and the Adjudicating Authority admitted the Application and observed that the debt and default is concerned, the Corporate Debtor does not deny the same. Further it is observed that the financial facilities have been duly granted and the amounts have been disbursed. In the facts of the present case, the Adjudicating Authority has already observed that the adverse observation will be subject to final outcome of the investigation. The Hon’ble Supreme Court in the matter of ICICI Bank Vs. Shanti Devi Sharma and Others [2008 (5) TMI 707 - SUPREME COURT] held that the Court could have been more careful to note that the facts that it discussed were alleged. Recognising as such, the Court clarified that its observations were not to influence or affect the proceedings. The adverse observations made by Adjudicating Authority, being admittedly subject to correction in investigation, were avoidable. They will not affect investigation in any manner or be basis to hold adversely against Appellant Bank or its officials. For the purpose of finding debt due and default for admitting Application it was not possible to accept defence of valuation claimed in averments vis-à-vis valuation done in record of seizure - the Adjudicating Authority could not have decided such averments. Appeal disposed off.
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