Home Case Index All Cases Insolvency and Bankruptcy Insolvency and Bankruptcy + AT Insolvency and Bankruptcy - 2023 (7) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (7) TMI 267 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - financial creditor and the corporate debtor are related parties and family owned companies or not - existence of debt and dispute or not - Appellant is entitled for an opportunity by the Adjudicating Authority especially in view of the fact that MoU dated 27.09.2017 could not be brought on record before the Adjudicating Authority or not? - HELD THAT:- The Corporate Debtor having not filed any Reply in spite of ample opportunity being granted by the Adjudicating Authority and the Application to recall the order proceeding ex-parte having also been dismissed, Appellant cannot be allowed to contend that one more opportunity be given to the Appellant - It is relevant to notice that amounts which was advanced by the Financial Creditor to the Corporate Debtor were amounts advanced from the year December, 2013 to December, 2017. The reasons by the Corporate Debtor not filing the Reply and placing any reliance on the MoU before the Adjudicating Authority are not forthcoming. Whether the Adjudicating Authority committed any error in accepting the Financial Debt and Default on the part of the Corporate Debtor? - HELD THAT:- The Adjudicating Authority has rightly placed reliance on the financial statement of the Corporate Debtor as well as those of Respondent No. 1 both reflecting the amount as short term loan. When balance sheet and financial statement as on 31st March, 2017 and 31st March, 2018 was filed along with Section 7 Application which statements were prepared in due course and are not subject of any dispute, we are of the view that acknowledgment as contained in the Financial Statements cannot be wished away by the Appellant relying on unregistered MoU dated 27.09.2017 which was never brought on record before the Adjudicating Authority. It is well settled preposition that balance sheets and financial statement of the Corporate Debtor can be looked into for finding any acknowledgement - This Tribunal in Shailesh Sangani v. Joel Cardso, [2019 (3) TMI 1192 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI] laid down that when promoter, director or shareholder of the Corporate Debtor as a stakeholder to improve financial health of the company and to boost its economic prospects, advance an amount, the same would have the commercial effect of borrowing on the part of the corporate debtor notwithstanding the fact that no provision is made for interest thereon. The findings recorded by the Adjudicating Authority that financial debt and default is proved is supported by the financial statements and balance sheets of the Corporate Debtor and Financial Creditor which were brought on record along with Section 7 Application. There is no infirmity in the findings of the Adjudicating Authority that debt and default is proved. The Liquidator filed Section 7 Application after obtaining order by the Adjudicating Authority permitting the Liquidator to file Section 7 Application. Section 7 Application was filed by the Respondent No. 1 and the Corporate Debtor failed to discharge its financial debt due to the Financial Creditor. The allegations of the Appellant that in collusion with current stakeholders, Section 7 Application was filed by Respondent No. 1/Liquidator is rejected. Thus, Adjudicating Authority has rightly come to the conclusion that financial creditor has successfully proved the financial debt and default on the part of the Corporate Debtor in initiation of Section 7 Application - there are no error in the order impugned passed by the Adjudicating Authority admitting Section 7 Application, there is no merit in the Appeal, the Appeal is dismissed.
|