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2022 (9) TMI 172 - Insolvency & Bankruptcy
Rejection of application for initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - Shell/fictitious companies - existence of financial debt or not - HELD THAT:- On examination of the impugned order and material available on record there is serious doubt on the actual entity of the appellants as company incorporated for doing legal business. There is serious doubt on the so called companies lending to the corporate debtor. The appellants are under the serious cloud of shell/fictitious companies. Of course without proper detailed enquiry or investigation, a specific finding may not be recorded on the issue but facts remain that there was lack of existence of financial debt. Accordingly, it is difficult to find any defect in the impugned order. The impugned order assigns detailed reasons and discussing every fact the Learned Adjudicating Authority has rightly rejected the application filed by the Appellants under Section 7 of the IB Code.
Simply rejection of this Appeal may not serve the purpose. Instead it is intended to dismiss the present appeal with imposing heavy cost. There are many circumstances which have been discussed suggests that either lending loan by the appellants were only paper transaction/sham transaction or said loans were shown to be repaid within one or two days from the date of lending. In case of Appellant No.1, this fact has already been established and noticed - it is considered that the appellants have abused the process of the Court and as such it is a fit case which can be dismissed with imposition of a cost of Rs.1 lakh.
The Appellants are directed to deposit the cost of Rs.1 lakh in the account of Prime Minister’s National Relief Fund within one month from the date of this order - The Appeal stands dismissed with cost of Rs.1 lakh on the Appellants.