2023 (7) TMI 66 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL , CHENNAI

Initiation of CIRP - NCLT admitted the application - 1st Respondent / Bank, has made substantial recoveries, during the pendency of Legal Proceedings - Dues or Outstandings, payable by the Corporate Debtor, to the 1st Respondent / Bank / Financial Creditor or not.

The stand of the 2nd Respondent / Corporate Debtor, before the Adjudicating Authority / Tribunal was that ‘there were no Dues, payable by the Corporate Debtor to the Financial Creditor, for that the 2nd Respondent / Corporate, had repaid the Amounts, in excess of the Principal Amount borrowed, it is the Financial Creditor has to Repay, such overpaid monies to the Corporate Debtor.

HELD THAT:- This Tribunal, pertinently points out that in a Proceeding (Filed under Section 7 of the I & B Code, 2016, by a Petitioner / Financial Creditor), an Adjudicating Authority/ Tribunal, is not concerned with the Dispute/ Controversy, between the Respondent / Corporate Debtor and the Petitioner / Financial Creditor, as regards the quantum. Ofcourse, when a Claim is made, it is for the Resolution Professional, to quantify the Claim Sum, to be paid.

An Adjudicating Authority / Tribunal, under I & B Code, 2016, is necessarily to ascertain as to whether, there is any Default, and whether the Liability of the Respondent / Corporate Debtor, is more than the Limit, prescribed under the Section 4 of the Code - Although, the Debt, is Disputed, if the said Sum, is more than the Amount, specified under Section 4 of the I & B Code, 2016, an Adjudicating Authority / Tribunal, has to admit the Section 7 Application of the I & B Code, 2016, and the said Application, cannot be rejected, merely on technical grounds.

No wonder, an Adjudicating Authority/ Tribunal, is to exercise its Judicial Discretion, in dealing with an Application (Filed under I & B Code, 2016), in accordance with Law, and based on facts, evidence and circumstances of the given case.

In the case on hand, before this Tribunal, although, on the side of the Appellant, a reference is made to the Order in M/S. INMA INTERNATIONAL LTD., G. RATHINAVELU, G. SUNDARAVADIVELU VERSUS INDIAN OVERSEAS BANK [2019 (12) TMI 1649 - MADRAS HIGH COURT], whereby and whereunder, an Order of Ad-interim Injunction, as prayed for, till 21.01.2020, was granted, and it was made clear that till the Disposal of the Writ Petition, the Writ Petitioners, shall not create any Third Party Rights, in respect of the Properties, in question, this Tribunal, is of the earnest opinion that there was no embargo upon the Adjudicating Authority / Tribunal, in not Proceeding with the IBA/49/2019 (Filed by the 1st Respondent / Bank / Financial Creditor).

The prime fact to be taken note of in repelling the plea of the Appellant that the Liability, has not crystallised in a definite manner is that a Final Order, came to be passed by the Debt Recovery Appellate Tribunal, as per Section 19 (20) r/w. Section 22 of Recovery of Debts Due to Banks and Financial Institutions Act, 1993. It cannot be gainsaid that the Order of a Court / Tribunal, determining the Default, is a cementing platform, evidencing Financial Debt, as opined by this Tribunal.

Considering the fact that the Due of the 2nd Respondent / Corporate Debtor, is more than the Threshold Limit of Rs.1 Lakh, under Section 4 of the I & B Code, 2016, and the same is to be paid, both in Law and in Fact, this Tribunal without any haziness, comes to a cocksure conclusion that the aspect of Debt and Default, committed by the 2nd Respondent / Corporate Debtor, is proved to its subjective satisfaction. Therefore, the 1st Respondent / Bank / Petitioner, has rightly initiated the Corporate Insolvency Resolution Process, before the Adjudicating Authority / Tribunal (under Section 7 of the I & B Code, 2016), and the same was rightly admitted, by the Adjudicating Authority (National Company Law Tribunal, Special Bench – II, Chennai), exercising its Judicial Discretion, based on the attendant facts and circumstances of the case, which is free from any legal infirmities.

Appeal dismissed.