TMI Blog2018 (9) TMI 1612X X X X Extracts X X X X X X X X Extracts X X X X ..... reme so far as triggering of Insolvency Resolution Process is concerned and same cannot be eclipsed by taking resort to remedies available under ordinary law of the land. Thus we are of the firm opinion that the instant appeal is frivolous and the Appellant has encroached upon the precious time of this Appellate Tribunal on flimsy grounds. It lacks merit. Admission is accordingly refused and appeal is dismissed. - Company Appeal (AT) (Insolvency) No. 428 of 2018 - - - Dated:- 14-8-2018 - Mr. S. J. Mukhopadhaya, Chairperson And Bansi Lal Bhat, Member (Judicial) For The Appellant : Mr. Manoj Kumar Garg and Mr. Santosh Kumar, Advocates JUDGMENT BANSI LAL BHAT, J. Appellant Jagmohan Bajaj , one of the shareholders of Respondent No. 1 - Shivam Fragnances Pvt. Ltd. (Corporate Debtor) is aggrieved of admission of petition filed by Respondent No.2 - Amiga Informatics Pvt. Ltd. (Financial Creditor) under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as I B Code ) by virtue whereof Corporate Insolvency Resolution Process was triggered, moratorium slapped, Interim Resolution Professional appointed and the necessary di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a debt and default and the application under Section 7 of I B Code was complete. 4. Initiation of Corporate Insolvency Resolution Process by Financial Creditor is regulated by the provision engrafted in Section 7 of I B Code, which reads as under: 7. Initiation of corporate insolvency resolution process by financial creditor. - ( 1) A financial creditor either by itself or jointly with other financial creditors may file an application for initiating corporate insolvency resolution process against a corporate debtor before the Adjudicating Authority when a default has occurred. Explanation .- For the purposes of this sub-section, a default includes a default in respect of a financial debt owed not only to the applicant financial creditor but to any other financial creditor of the corporate debtor. ( 2) The financial creditor shall make an application under sub-section (1) in such form and manner and accompanied with such fee as may be prescribed. ( 3) The financial creditor shall, along with the application furnish- ( a) record of the default recorded with the information utility or such other record or evidence of default as may be specif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kruptcy (Application to Adjudicating Authority) Rules, 2016. Under Rule 4, the application is made by a financial creditor in Form 1 accompanied by documents and records required therein. Form 1 is a detailed form in 5 parts, which requires particulars of the applicant in Part I, particulars of the corporate debtor in Part II, particulars of the proposed interim resolution professional in part III, particulars of the financial debt in part IV and documents, records and evidence of default in part V. Under Rule 4(3), the applicant is to dispatch a copy of the application filed with the adjudicating authority by registered post or speed post to the registered office of the corporate debtor. The speed, within which the adjudicating authority is to ascertain the existence of a default from the records of the information utility or on the basis of evidence furnished by the financial creditor, is important. This it must do within 14 days of the receipt of the application. It is at the stage of Section 7(5), where the adjudicating authority is to be satisfied that a default has occurred, that the corporate debtor is entitled to point out that a default has not occurred in the sense that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being incomplete, the Adjudicating Authority will put the Financial Creditor on notice to remove the defect within 7 days. 6. Adverting to the facts of the case in hand, be it seen that the Appellant has neither disputed the factum of owing debt to the Financial Creditor nor assailed the order of admission of petition under Section 7 of I B Code on the ground that the debt was not payable. Admittedly, Appellant is one of the Shareholders of Respondent No.1 Shivam Fragrances Pvt. Ltd. (Corporate Debtor) and seeks to question the legality of initiation of Corporate Insolvency Resolution Process at the hands of Financial Creditor on the sole ground of there being an inter-se dispute amongst the Directors of Corporate Debtor. The stand taken by the Corporate Debtor before the Adjudicating Authority was that the Financial Creditor had granted loan of ₹ 1.02 Crores in favour of the Corporate Debtor to enable it to develop and construct a building on Plot no. A-184, Sector 63, Noida but the Corporate Debtor failed to repay the loan amount due to financial crunch. The Corporate Debtor did not dispute the existence of arbitral award in favour of the Financial Creditor but pl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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