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2018 (9) TMI 2034 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Operational Creditors - existence of debt and dispute or not - pendency of proceedings against the corporate debtor before different forum - HELD THAT - It is well settled that pendency of proceedings against the corporate debtor cannot be an impediment or bar to initiate Corporate Insolvency Resolution Process against the Corporate Debtor under the provisions of Section 7 of the Code. There has been no court injunction restraining the applicant bank to initiate action under the provisions of the Code. Simply pendency of proceedings cannot be a ground to deny admission of an application under Section 7 of the Code once the application is complete and there has been commission of default - Insolvency and Bankruptcy Code 2016 being a complete Code and subsequent Union Law will prevail over other later laws like the Recovery of Debts Due to Banks and Financial Institutions Act 1993 Money Laundering Act and SARFESI Act 2002. As per Section 238 the provisions of the Code are to be given effect to notwithstanding anything contrary contained in any other later laws or any instrument having effect under such law. Thus the objection in this regard will not sustain as initiation and pendency of proceedings in different forums is no bar for initiation of Corporate Insolvency Resolution Process under Section 7 of the Code in view of the overriding effect given to the provisions of Section 238 of the Code. It is pertinent to note that in financial transactions adjustments and compromise are to be left to the parties to settle the matter in their best interest or exigencies of the business. However in the absence of any binding compromise agreement/ debt restructuring approval it is beyond the powers of the adjudicating authority to extend time indefinitely or to defer the prayer of applicant financial creditor for admission of the petition filed under Section 7 of the Code - The procedure in relation to the Initiation of Corporate Insolvency Resolution Process by the Financial Creditor is delineated under Section 7 of the Code wherein only Financial Creditor / Financial Creditors can file an application. As per Section 7 (1) of the Code an application could be maintained by a Financial Creditor either by itself or jointly with other Financial Creditors. It is seen that the applicant has placed various documents in relation to the disbursement of the loan to the respondent company. The materials on record and the loan documents clearly depict that that the loan was sanctioned and the loan agreements were properly executed. Respondent company utilised and enjoyed the loan facility. The applicant bank has filed various documents pertaining to creation of charge over the assets of the respondent company in respect of various loans taken from consortium banks - the applicant financial creditor has placed on record voluminous and overwhelming evidence in support of the claim as well as to prove the default. In the case on hand it is seen that respondent corporate debtor has committed default in repayment of the outstanding financial debt. On a bare perusal of Form - I filed under Section 7 of the Code read with Rule 4 of the Rules shows that the form is complete and there is no infirmity in the same. Accordingly it is seen that the application of the financial creditor is complete and there is no disciplinary proceeding pending against the proposed IRP - the present application is complete and the applicant financial creditor is entitled to claim its outstanding financial debt from the corporate debtor and that there has been a default in payment of the financial debt. Application admitted - moratorium declared.
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