Latest - TMI e-Newsletter
New User/ Regiser
2022 (6) TMI 619 - Insolvency & Bankruptcy
Head Note / Extract:
Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- It is the contention of the Corporate Debtor’s that there is no written contract regarding any loan being sanctioned to the Corporate Debtor by the Financial Creditors. In this regard, reliance placed on the stand taken by the NCLAT in NARENDRA KUMAR AGARWAL, SUMAN AGARWAL VERSUS MONOTRONE LEASING PRIVATE LIMITED, BIMAL KANTI CHOWDHRY IRP [2021 (1) TMI 717 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] wherein it was held that the written contract cannot be treated as an essential element or prerequisite to prove the existence of Financial Debt. The Financial Creditor has failed to bring on record any other evidence in the form of a loan agreement, promissory note, contract or any document to substantiate its claim that there was a financial debt and a default of the same. The Financial Creditor has produced the Corporate Debtor’s Annual reports for the Financial Years 2016-17 and 2017-18. However, the same do not reflect any debt due specifically to the Financial Creditor - the Financial Creditor has placed reliance on its bank statements and confirmation of accounts of the Corporate Debtor that reflect transactions between the parties. However, in absence of any written document indicating the purpose of the said transactions, it cannot be assumed to have been towards a loan as claimed by the Financial Creditor. While a written contract cannot be treated as a pre-requisite to proving the existence of financial debt, the Adjudicating Authority must be satisfied that the Corporate Debtor is not being dragged into Corporate Insolvency Resolution Process mala fide for any purpose other than the resolution of the Insolvency. In the present matter, there is no evidence to Allow or Admit present Application - Petition dismissed.