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2023 (1) TMI 254 - AT - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - it is submitted that Adjudicating Authority committed error in rejecting Section 10 Application filed by the Corporate Debtor, which was filed on the ground of default of the Corporate Debtor in paying the dues of Noida Authority and the pre-conditions as mentioned in Section 10 of the Code, having been fulfilled, Section 10 Application ought to have been admitted. Whether there were sufficient ground for allowing Section 65 Applications by the Adjudicating Authority? HELD THAT:- In Section 65 Application, Applicants have brought on record Data from MCA, which indicate that one of the Director Manpreet Singh Chadha, who was the Director right from the inception of the Company, before filing Section 10 Application had resigned. Manpreet Singh Chaddha was with the Corporate Debtor with effect from 07.06.2011 and has resigned on 11.01.2021. Another Director Charanjeet Singh also resigned. The fact which needs to be noticed is that Manpreet Singh Chaddha, who was Director and has resigned before filing Section 10 Application has been transposed as Financial Creditor in Section 10 Application. It is also relevant to note that Harmandeep Singh Kandhari, who was also Director since 07.06.2011 is also shown as Financial Creditor. The financial debt of Manpreet Singh Chaddha has also been shown in Section 10 Application. The resignation of Directors few months before filing of Section 10 Application especially Manpreet Singh Chaddha, who was Director from day 1 and claiming dues as Financial Creditor in Section 10 Application fully proves the malicious intention of the Corporate Debtor. There is no doubt that 90% amount from the Homebuyers were received, which is claimed to be Rs.1400 crores and the Appellant has left most of the Project unfinished, depriving possession thereof to Homebuyers speaks for itself. The allegations made by the Homebuyers that amount has been siphoned by the Appellant finds credence by the sequence of events, which took place in the present case. When finding recorded by the Adjudicating Authority is that Section 10 Application has been initiated fraudulently and maliciously, even if there is debt and default, the Adjudicating Authority is not obliged to admit Section 10 Application. Section 10 and Section 65, which are part of the same statutory scheme needs to be read together to give effect to the legislative scheme of the Code - The present is a case where it has been held that Application under Section 10 has been maliciously and fraudulently initiated for the purpose other than for the resolution of insolvency. The Hon’ble Supreme Court in RAMJAS FOUNDATION & ANR. VERSUS U.O.I. & ORS [2010 (11) TMI 936 - SUPREME COURT] has held that a person is not entitled to any relief, if he has not come to the Court with clean hand, which principle is also applicable to the cases instituted in other Courts and judicial Forums. There are no error in rejection of Section 10 Application - the default committed by the Appellant was much before 25.03.2020. The Explanation to Section 10A clearly provides that provisions of Section 10A shall not apply to any default committed under the said Section before 25.03.2020. Thus, present is a case where Section 10A was not Applicable. The Adjudicating Authority did not commit any error in allowing Section 65 Applications and rejecting the Section 10 Application. When Applications under Section 65 were allowed holding that initiation of proceedings under Section 10 was done fraudulently and maliciously for purpose other than resolution, rejection of Section 10 Application is consequent and inescapable - appeal dismissed.
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