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2020 (10) TMI 164 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- There is undoubtedly that the default in repayment of various loan admittedly availed by the CD is artificial and man-made. There are inconsistencies as regards date of declaration of NPA as well as the date of default. The date of default in Packing Credit Account allegedly occurred on 28.02.2018 and the Cash Credit, Packing Credit/FBP/FBD, Inland/Import Letter of Credit and Inland/Foreign Bank Guarantee have been allegedly classified as Non Performing Asset on 29.05.2018. However, the total default amount in cash credit account seems to have been claimed, is ₹ 46,32,00,000/- as on 23.09.2018, that is subsequent to the date of declaration of account as NPA on 29.05.2018. This anomaly has not been properly explained. Evidently as on 31.03.2017, the Corporate Debtor company was a profit making solvent company, (As per admitted financial statement of Corporate Debtor). How this profit making company all of a sudden went into insolvency, no valid explanation is forthcoming. According to the Ld. Counsel for the Corporate Debtor, it is because the situation had changed from the middle of March, 2018 because of a sudden and unexpected circular issued by the Reserve Bank of India dated March 13, 2018 being Circular No. 20 by which all authorized dealer Category-I Bank authorized to deal in foreign exchange were directed to discontinue the practice of issuance of Letter of Undertakings (LoUs)/Letter of Comforts (LoCs) for trade credits for imports into India with immediate effect. There is enough material on record to prove that the Financial Creditor had never been serious in initiating any action under the Code against the Corporate Debtor either in the earlier application under Section 10 of the Code, filed by the corporate applicant, or in the present proceedings under Section 7 of the Code. The Credit facilities had admittedly been revised and sanctioned from time to time and finally on 15th February, 2018 when various documents had been got executed from the Corporate Debtor, the date of default could not be 28th February, 2018 and the date of the corporate debtor's account could not be declared as NPA on 29th May, 2018 when bank had accepted the Resolution passed by the Board of Directors of the Corporate Debtor on 15th February, 2018. The Bank appears to have some other Agenda either at the time of enhancing credit facilities or at the time of declaring the account of the Corporate Debtor as an NPA on 29th May, 2018. The Financial Creditor has completely failed to convince us as regards the date of default being 28th February, 2018, and classification of its account being a non-performing asset on 29th May, 2018. The two dates being, material for initiating CIRP against a corporate person, the application is bound to fail - In the facts and circumstances and the arguments discussed, the Intervener's application is found liable to be allowed, and the CP, being devoid of any merit, liable to be dismissed. Application dismissed.
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