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2017 (6) TMI 691 - NATIONAL COMPANY LAW TRIBUNAL, MUMBAIInitiation of Corporate Insolvency Resolution Process u/s 7 of Insolvency and Bankruptcy Code, 2016 - Whether enough evidence as mandated u/s 7 of the Code has been placed by the applicant for admission of this company Application or not? - Held that:- Here in this case for the financial creditor has produced the debenture certificate showing financial contract and thereafter financial statements of the company reflecting the payment above mentioned as remained overdue till date of filing this company application. In view of the evidence let in by the financial creditor, we believe that the record placed by the financial creditor is sufficient enough to prove that the corporate debtor has defaulted in repayment of the aggregate principal amount of ₹ 51 crores to which OCDs have been issued by the corporate debtor. Whether deficiency of stamp duty will invalidate the debenture certificate or not? - Held that:- Since it is evident that the corporate debtor company is a private limited company, for these debentures cannot be transferred like in a public limited company, these debentures cannot be called as marketable security and since the corporate debtor company already defaulted in making repayment after maturity date it can't in any way be considered as a security asking stamp duty. Hence this Bench has not found any merit in the argument of the Corporate Debtor counsel on this point. Whether the debt is time barred or not? - Held that:- The admission appearing in the financial statement of the company is an acknowledgement covered by section 18 of the Limitation Act, an acknowledgement need not be given to the financial creditor stating that debt is owed to him. If such debt is shown as due in the financial statements of the company which are rem in nature, it is to be construed as an acknowledgment of default. Since there has been express admission that the company has defaulted in repayment of principal toward the money received by issuing debenture certificates, this debt cannot be called as time barred debt. Thereby this bench has not found any merit in the argument taken by the corporate debtor counsel. Whether the pendency of arbitration proceeding between the parties will have any bearing on adjudication of this application or not? - Held that:- As no civil court shall have jurisdiction in respect of any matter in which the adjudicating authority is empowered by or under this court to pass any order, thereby it is clear that pendency of any proceeding before any court will not have any bearing on the proceedings initiated under this Code provided that dispute is covered under the respective section of this Code. Since this case is covered u/s 7 of the Code, pendency of section 21 proceedings under Arbitration Act will not have bearing on this case. Whether the applicant herein can file this application as a financial creditor when the applicant is continuing as one of the shareholders of the Company? - Held that:- As there is no legal bar against this applicant to make his claim as a financial creditor, this Bench cannot read into such proposition to deprive the right of this applicant. Therefore, we do not find any merit in the argument of the corporate debtor. When a Company is unable to pay the debt or refuse to pay the debt, the financial creditor or the operational creditor, as the case may be, can initiate insolvency proceedings since the corporate debtor defaulted in repaying the debt admittedly showing in the financial statement of the debtor Company, this application deserves admission. This Bench admitted this petition. The order for appointment of Insolvency Resolution Professional and other consequential directions will follow within fourteen days from the date of admission.
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