2020 (10) TMI 680 - NATIONAL COMPANY LAW TRIBUNAL , CHENNAI BENCH - Insolvency & Bankruptcy

Head Note / Extract:
Maintainability of application - initiation of CIRP - Corporate Applicant had guaranteed the repayment of amounts borrowed by M/s. J R Foods Limited to Bank of Baroda - existence of debt and dispute or not - HELD THAT:- From the financial statements submitted by the Corporate Applicant, as to the query raised by this Authority, the Corporate Applicant was unable to explain as to why there is a depletion in the amount of General Reserve as evidenced from the heading Reserves and Surplus, which appears in the Balance Sheet as on 31.03.2018 at ₹ 1,02,95,314/- vis-a-vis and the amount is shown at ₹ 29,96,364/- as per the last balance sheet which is purportedly on 31.03.2019, in page No. 50 of the typed set filed with the Application - Further, a perusal of the typed set of documents filed by the Corporate Applicant goes on to show that there are various discrepancies in the records, more particularly with respect to the Audited Balance Sheet as on 31.03.2018 and further Rule 7 of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016, empowers this Adjudicating Authority to look into the documents which are being filed by the Corporate Applicant and to ascertain whether the said documents are in order. It must be noted here that this Adjudicating Authority is not a mere stamping authority and is required to apply its mind in relation to the veracity of the documents filed correlating with Annexures required to be enclosed under the prescribed form, namely Form 6 under the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules, 2016. However, it is evident from the record or proceedings that the matters were initially reserved for orders on 08.11.2019 and thereafter, it was posted for clarifications on 18.11.2019 and to rectify the defects in the Application as per proviso the sub - section (4) of Section 10 of IBC, 2016. In spite of the same, the discrepancies in the documents still persist and the Corporate Applicant was unable to explain as to why there is a depletion in the amount of General Reserve as on 31.03.2018 as compared to 15.09.2019. The reason for drain in reserve could not be explained by the Applicant to the satisfaction of this Tribunal. This Authority does not deem fit and appropriate for considering this Application under Section 10 of I&B Code, 2016 - Application dismissed.