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2020 (10) TMI 321 - NATIONAL COMPANY LAW TRIBUNAL , BENGALURU BENCHMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- The total amount of outstanding debt owed to the two Petitioners was ₹ 38,47,000 in respect of Petitioner No. 1, and ₹ 38,47,000 and ₹ 38,59,882 respectively to Petitioner No. 2 in respect of his two investments. The total debt works out to ₹ 1,15,53,882/-. The same has not been opposed before us and clearly amounts to a debt u/s 5(8)(c) of the Code. The Hon'ble Supreme Court in the case of Innoventive Industries Ltd. Vs. ICICI Bank Ltd., [2017 (9) TMI 58 - SUPREME COURT] held that the scope of enquiry of an Adjudicating Authority in an Application made under Section 7 is very limited. The moment the Adjudicating Authority is satisfied that a "Default" has occurred, the Application must be admitted. The Adjudicating Authority has to merely satisfy itself that a default has occurred, even if the default is disputed so long as it is due, unless interdicted by some law. Although Section 7(5) of the Code says that the Adjudicating Authority "may" admit or "may" dismiss a petition, looking at the facts of the case we are of the view that the petition needs to be admitted. A perusal of the Financial Statements of the Corporate Debtor for the FYs 2015-16, 2016-17 and 2017-18 gives the following picture: i) Its Liabilities increased from ₹ 55,55,96,184 as on 31.03.2016 to ₹ 62,79,11.936 as on 31.03.2017. ii) It earned a meagre profit of ₹ 1,25,983 as on 31.03.2017 and a loss of ₹ 15,87,734 as on 31.03.2016, from its operations; iii) Its cash flow statement showed a decrease in cash/cash equivalent of ₹ 2,59,11,523 as on 31.03.2017 over the preceding FY; iv) Its interest liability on Debentures alone as on 31.03.2017 was ₹ 2,19,18,544; v) As on 31.03.2018 (as per the information available on the MCA website) it had a negative Net Worth of 2,99,55,490; and total debts of ₹ 63,34,80,737 including the debt on account of NCDs. It is clear therefore, that the financial status of the Corporate Debtor is not healthy and indicates that it is not in a position to repay its debts. Apparently for this reason it has not come forward to oppose the Petition. This is a fit case for initiation of CIRP in respect of the Corporate Debtor M/s. Greens Farm Tech Private Limited. - Application admitted - moratorium declared.
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