9911796707
TMI Blog2018 (7) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is to be mentioned here that the loans in question were availed by the Corporate Debtor in the year 2009-10, which are collaterally secured by way of equitable mortgage by deposit of title deeds /registered mortgage. And loans in question are classified as NPA as early as on 26.12.2013. Subsequently SARFASEI proceedings as detailed supra are initiated, which are in advanced stage of E-auction. As pointed out by the Learned Counsel for the Respondent/Bank, the instant application is filed only to scuttle the proceedings of SARFAESI. The Corporate Debtor has not taken any steps to clear even a part of loan and surprisingly and mischievously trying to deny the loans in question. It is un-heard that such a stand of denial is taken where in public sector Banks and public money is involved. Financial discipline demands that there should not be denial simply for the sake of denial in case where money is taken. It is very surprising to note the attitude of the Corporate Debtor before the Bank by way of replies as stated supra and filing the instant application to misuse and abuse the process of law under IBC. This Bench will not be a party to permit the Corporate Debtor to misuse prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Express and Andhra Jyothy in April, 2017, Notice Prior to Sale under Rule 8(5) and 8(6) of Security Interest (Enforcement) Rules in May 2017 and E-auction sale notice in July, 2017 etc, which involved substantial cost to the Financial Creditor / Bank. Therefore, we impose a cost of Rs. 10 lakhs on the Corporate Debtor. 21. In the result, the Company petition bearing CP (1B) No. 128/10/HDB.2017 is dismissed with a cost of Rs. Ten lakhs to be paid to SBI/Financial Creditor on or before 31st August, 2017." 2. Learned counsel for the Appellant submits that the impugned order has been passed on frivolous grounds which cannot be taken into consideration, though the application under Section 10 of the 'I&B Code' was complete in all aspects. 3. On the other hand, according to Respondent ('Financial Creditor') there is significant suppression of liability in the application filed by the Appellant under section 10 of the 'I&B Code' making it incomplete and liable to be rejected. 4. It was submitted that the Appellant has grossly understated the outstanding amount owed to the Respondent in the Form 6, while the Appellant has admitted an amount of Rs. 324 crores as on 15th June, 2017. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 11 of the I & B Code. The Adjudicating Authority on hearing the parties and on perusal of record, if satisfied that there is a debt and default has occurred and the Corporate Applicant is not ineligible under Section 11, the Adjudicating Authority has no option but to admit the application, unless it is incomplete, in which case the Corporate Applicant is to be granted time to rectify the defects. 22. Section 10 does not empower the Adjudicating Authority to go beyond the records as prescribed under Section 10 and the informations as required to be submitted in Form 6 of the Insolvency and Bankruptcy (Application to the Adjudicating Authority) Rules, 2016 subject to ineligibility prescribed under Section 11. If all informations are provided by an applicant as required under Section 10 and Form 6 and if the Corporate Applicant is otherwise not ineligible under Section 11, the Adjudicating Authority is bound to admit the application and cannot reject the application on any other ground. 23. Any fact unrelated or beyond the requirement under I & B Code or Forms prescribed under Adjudicating Authority Rules (Form 6 in the present case) are not required to be stated o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 26. Any proceeding under Section 13(4) of the SARFAESI Act, 2002 or suit under Section 19 of the DRT Act, 1993 pending before Debt Recovery Tribunal or appeal pending before Debt Recovery Appellate Tribunal cannot proceed in view of the order of moratorium as may be passed. 32. In view of the provisions aforesaid, we hold that, if any winding up proceeding has been initiated against the Corporate Debtor by the Hon'ble High Court or Tribunal or liquidation order has been passed, in such case the application under Section 10 is not maintainable. However, mere pendency of a petition for winding up, where no order of winding up or order of liquidation has been passed, cannot be ground to reject the application under Section 10." 8. It is not the case of the 'Financial Creditor' (State Bank of India) that a winding up proceeding under the Companies Act or liquidation proceeding under the 'I&B Code' has been initiated against the 'Corporate Debtor'. Therefore, the 'Corporate Applicant' is eligible to file application under Section 10 of the 'I&B Code', if there is a debt and default. 9. Further, as we find that the Adjudicating Authority has noticed the extraneous factors unrel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may impose upon such person a penalty which shall not be less than one lakh rupees but may extend to one crore rupees in terms of sub-section (2) of Section 65. 37. From the aforesaid provision, it is clear that for imposition of penalty under Section 65, the Adjudicating Authority on the basis of record is required to form prima facie opinion that the person (Financial Creditor / Corporate Applicant / Operational Applicant) has filed the petition for initiation of proceeding "fraudulently" or "with malicious intent" for the purpose other than the resolution of the insolvency or liquidation or that voluntary liquidation proceedings has been filed with the intent to defraud any person. 38. No such penalty under sub-section (1) or (2) of Section 65 can be imposed by the Adjudicating Authority without recording opinion for coming to the conclusion that a prima facie case is made out to suggest that the person "fraudulently" or "with malicious intent" for the purpose, other than the resolution insolvency or liquidation or with the intent to defraud any person has filed the application." 11. There is nothing on record to suggest that the 'Corporate Applicant' has suppressed any ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
