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2021 (6) TMI 951 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - Principle of Waiver - Estoppel by Election - Estoppel by Record - Aspect of NPA - HELD THAT:- It is to be remembered that the Code was enacted to consolidate and amend the laws related to reorganisation and Insolvency Resolution of Corporate Persons, Partnership firms, Individuals in a time bound fashion. (a) for maximisation of value of assets of such individuals (b) to promote entrepreneurship (c) for availability of credit and balance the interests of all stakeholders etc. ‘Speed’ is gist of I & B Code. The Resolution Plan is not a sale/an auction/not recovery/not liquidation. No one is selling or buying the Corporate Debtor through Resolution Plan. It is resolution of the Corporate Debtor as going concern. The Code permits liquidation only on failure of CIRP. Indeed, the I & B Code, does not permit’ Liquidation’ of a ‘Corporate Debtor’. Undoubtedly, the recovery bleeds the Corporate Debtor to ‘Death’. But the ‘Resolution’ ‘endeavours’ to keep the Corporate Debtor alive. Significantly, ‘Satisfaction’ of the ‘Adjudicating Authority’ is a condition precedent for the approval of a Resolution Plan. Section 12 of the Code provides that the ‘CIRP’ shall be completed within the period of 180 days etc, from the date of admission of application and further that process is to be completed within 330 days provided in the statute. Initiation of CIRP - HELD THAT:- A Financial Creditor may initiate the ‘CIRP’ under section 7 of the Code by filing application before the ‘Adjudicating Authority’ as per the procedure prescribed, when the default had occurred. The occurrence of default is the pivotal point of commencement of CIRP. An application will be admitted when the ‘Adjudicating Authority’ is satisfied that among other things the ‘default’ had occurred and the ‘application’ was complete. Admission & Acknowledgement - HELD THAT:- As matter of fact, in the instant case when once the Company has/had defaulted and after the initiation of legal proceedings as available to the Lender on that date (Before the Debt Recovery Tribunal) and when the Financial Creditor/Lender had obtained the order(s) in the ‘Original Applications’ and later recovery certificates were issued, and when the Original Applications filed before the Debt Recovery Tribunal(s) had attained finality, thereafter it is for the Lender/Financial Creditor/Decree Holder as matter of ‘Election’ to pursue the recovery mechanism for his/its personal benefits before a ‘competent forum’ or to initiate Insolvency Proceedings for the benefit of ‘stakeholders’ and ‘one and all’. In the event of the Decree Holder/Lender/Financial Creditor has/had resorted to the initiation of Insolvency Proceedings under relevant section of the I & B Code (after coming into force of the Code) he/it cannot be found fault with, since there is no fetter in ‘Law’, in this regard. The instant case there is a ‘Financial Debt’ which is due and payable by the ‘Corporate Debtor’. Moreover, as against the Corporate Debtor/Totem Infrastructure Limited, orders were passed by the Debt Recovery Tribunal(s) and the three ‘Recovery Certificates’ dated 17.10.2017, 04.08.2017 and 08.09.2015 clearly establish the factum of Financial Debt, due and payable, and that default being committed by the ‘Corporate Debtor’. To put precisely, the onus of proving the ‘debt’ and ‘default’ on the part of the First Respondent/Bank in the instant case, has been duly discharged. Application dismissed.
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