Home Case Index All Cases Insolvency and Bankruptcy Insolvency and Bankruptcy + Tri Insolvency and Bankruptcy - 2018 (9) TMI Tri This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (9) TMI 944 - NATIONAL COMPANY LAW TRIBUNAL, KOLKATAApplication filed u/s. 7 of the Insolvency and Bankruptcy Code, 2016 - Proof of existence of default - Whether the application is not maintainable as alleged by the respondent? - Whether there is default in repayment of the loan as alleged? - Held that:- Considering the peculiar circumstances that the applicant and corporate debtor were sister concern, that applicant and respondent are brothers, that there was a family settlements finalized into an award and that an execution of the award is pending before the Hon’ble High Court at Culcutta, and the applicant is prohibited from altering the status quo with regard to the business, properties and assets in the possession of applicant company it appears to me that it is unjust and unfair to proceeds with the case in hand. The status quo order also would applicable to the assets of corporate debtor. In case this application is found liable to be admitted it would defeat the very purpose of execution of the award. Moreover the passing of resolution by removing the existing directors is also under challenge before the company court as well as before the magistrate Court. The above said factors proves that the applicant filed this application without clean hand and suppressing material facts and hence it appears to me that this application is not maintainable because of the order of status quo is in force. This point is answered accordingly. As per Section 7(3) of the I & B Code, 2016 the burden is heavy on the side of the financial creditor to prove the existence of a default. In a case of this nature a financial creditor can succeed only if he proves the existence of a default. In order to initiate Corporate Insolvency Resolution Process a financial creditor has to satisfy the ingredients to be proved under sub-section (3) of Section 7 of the I & B Code, 2016 Proof of existence of default from the record of information utility or such other record or evidence of default as may be specified shall be produced by the applicant. Evidence other than the information utility can also be produced in a case of this nature. But here in this case proof of default not at all produced on the side of the financial creditor. That being so the applicant herein in this case also failed to prove existence of a default. For the aforesaid reasons the application is liable to be rejected.
|