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2022 (7) TMI 611 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT:- Section 186 of the Companies Act, 2013 provides for the loans and investments that can be made by a company. According to section 186(2), no company shall directly or indirectly, give any loan to any person or other body corporate exceeding sixty per cent of its paid-up share capital, free reserves and securities premium account or one hundred per cent of its free reserves and securities premium account, whichever is more. A perusal of the balance sheet of the Financial Creditor reveals that the free reserves and surplus of the Financial Year for the Financial Years 2017-18 and 2018-19 are Rs. 3,09,33,281/- and Rs. 3,80,62,525/- respectively. As such the loan given to the Corporate Debtor is less than 100% of the free reserves of the Company and therefore, the instant petition is not hit by the provision of section 186. The Corporate Debtor has acknowledged his liability towards the Financial Creditor, firstly vide the acknowledgment receipt dated 23rd April 2018 and thereafter vide the settlement agreement. Keeping in view that a default in the payment of a financial debt has occurred by the Corporate Debtor, and there is an acknowledgment of Financial Debt and also that the said application is not barred by limitation, we are of the view that the instant application under section 7 of the Code is complete in all respects. Application admitted - moratorium declared.
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