TMI Blog2019 (1) TMI 1313X X X X Extracts X X X X X X X X Extracts X X X X ..... as required under Section 5(8). Merely grant of loan and admission of taking loan will ipso facto not treat the 2nd and 3rd Respondents as ‘Financial Creditors’, till they show that it complies with the substantive definition or any one or other clause of Section 5(8). Mere fact that the company paid interest @ 12% p.a. during certain period cannot be the ground to hold that the ‘debt’ comes within the meaning of ‘Financial Debt’ to treat the 2nd and 3rd Respondents as ‘Financial Creditors’. As we find that 1st Respondent who signed and filed the application under Section 7 of the ‘I&B Code’ was not eligible to file the application not being a ‘Financial Creditor’, as held by the Adjudicating Authority, we hold that the petition at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er held that the 2nd and 3rd Respondents being not party to the guarantee agreement, the application for initiation of Corporate Insolvency Resolution Process at the instance of 2nd and 3rd Respondents is maintainable. 3. The questions arise for consideration in this appeal are: i. Whether in absence of authorization letter given by 2nd or 3rd Respondents, after rejection of the application preferred by the 1st Respondent, the joint application under Section 7 at the instance of the 2nd and 3rd Respondent (2nd and 3rd Petitioner before the Adjudicating Authority) is maintainable? and; ii. Whether the 2nd and 3rd Respondents are Financial Creditors , within the meaning of sub-section (7) read with sub-section (8) of Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accepted, as the Adjudicating Authority already having held that 1st Respondent is not a Financial Creditor and the impugned order having not being challenged by the 1st Respondent. 10. It is true that as per explanation below Section 7, a Financial Creditor in whose case no default has taken place may also file a petition under Section 7 for default in regard to other creditors joined with him, but the 1st Respondent being not a Financial Creditor as held by the Adjudicating Authority, in absence of any default in respect to the 2nd and 3rd Respondents, the joint petition was not maintainable. 11. Learned counsel appearing on behalf of the Respondents submitted that the default regarding debt of 2nd and 3rd Respondents was more ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ancial Creditor , as held by the Adjudicating Authority, we hold that the petition at the instance of 2nd and 3rd Respondents were also not maintainable. 14. The Adjudicating Authority having failed to notice the aforesaid facts, we have no other option but to set aside the impugned order dated 2nd February, 2018 passed in CP No. (IB) 130/7/NCLT/AHM/2017, which is set aside. 15. In effect, order (s), passed by the Adjudicating Authority appointing any Interim Resolution Professional , declaring moratorium, freezing of account, and all other order (s) passed by the Adjudicating Authority pursuant to impugned order and action, if any, taken by the Interim Resolution Professional , including the advertisement, if any, published in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
