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2021 (4) TMI 777 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Debt or not - issuance of demand notice, mandatory or not - HELD THAT:- There was no valid ground to conclude that the Petition was filed with malicious intent. The Adjudicating Authority's finding regarding malicious intent cannot be treated as valid by any stretch of the imagination. The Petition was dismissed mainly because alleged debt cannot be treated as financial debt. Only on this basis, the inference cannot be drawn that the Petition was filed with malicious intent. In any event, the apparent malicious intent was for the issuance of the demand notice, which, as stated above, is not even a legal requirement under Section 7 of the Code. Therefore it is clear that the observation of the learned Adjudicating Authority that the Petition is filed with malicious intent is invalid. In the facts and circumstances of the present case, only on the ground that the Adjudicating Authority has not treated the alleged Transaction as a financial debt, no action could have, in any event, be taken under Sections 65, 72 and 75 of the Code. In any event, from the facts of the case, none of the preconditions of the above-mentioned provisions of Sections 65, 72 or 75 of the Code has been satisfied, which is evident from the following - Appellant had initiated proceeding under Sections 7 of the Code in the financial creditor's capacity to exercise their legal right. While the petitions were dismissed on merits, there is no doubt that the said proceedings were initiated for the purposes envisaged by law. There is nothing on record to show that the proceedings u/s 7 of the Code were initiated for the purpose other than seeking a resolution, which is the sine qua non for initiation of proceedings under Section 65 of the Code. Appeal disposed off.
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