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2022 (3) TMI 116 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - fraudulent or malicious initiation of proceedings - existence of debt and default or not - Section 65 of I&B Code - HELD THAT:- It is not in dispute that there is no ‘debt’ and ‘default which is the basic requirement of the Section 7 of the Code. However, the ‘Adjudicating Authority’ has the inherent power to restrict the perpetuation of applications motivated by fraud or malice under section 65 of the code - The Hon’ble Apex Court has also observed in ‘Embassy property development Pvt. Ltd’ [2019 (12) TMI 188 - SUPREME COURT] has held that if the CIRP had been initiated by one and the same person taking different avatars not for the genuine purpose of Resolution Insolvency or Liquidation but for the collateral purpose of cornering the mine and mining lease the same would fall squarely within the mischief by Section 65(1) of the Code. The Adjudicating Authority has jurisdiction to enquire into the allegation of fraud and so also with this Appellate Tribunal. There are several issues (violation of dealership agreement, vis a vis invocation of code for default concurrently happening under floorplan financing agreement of dealership agreement provided by same BMW Group Company) raised by the Appellant on Respondent No.2- BMW India Pvt. Ltd discreetly covering Respondent No.3- BMW India Financial Services Pvt. Ltd. Since, some collusion seems to be apparently existing to thwart the claim of the Corporate Debtor and other related issues. Impugned order dated 04th June, 2020 has not dealt with this IA and has dismissed on the ground that BMW India Pvt. Ltd/R2 in the IA No.300 of 2018 is not a party in the main petition no.167 of 2017. Although IBC is a summary proceeding but if large business houses with multiple business arms are allowed to disrupt on its whims & fancies small business firm then how IBC can promote entrepreneurship which is also its objective. Matter remanded back in respect of IA 300 of 2018 to the ‘Adjudicating Authority’ to go into the details of the allegations & decide either way by giving reasonable & proper opportunity to all the parties involved - application disposed off.
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