TMI Blog2019 (11) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... t appears that there is no possibility of keeping the Company a going concern, IBC cannot be invoked - appeal dismissed. - Company Appeal (AT) (Ins) No.441 of 2019 - - - Dated:- 6-9-2019 - Justice A.I.S. Cheema, Member (Judicial), Justice Bansi Lal Bhat And Justice Kanthi Narahari, Member (Technical) For The Appellant : Shri Pulkit Deora, Advocate For The Respondent : Shri Sanjay Bhatt, Advocate with Ms. Kiran Sharma, CS And Shri I.P.S. Oberoi, Advocate JUDGEMENT A.I.S. Cheema, J. : 1. Respondent No.1 Edelweiss Asset Reconstruction Company Ltd. (Edelweiss in short) Financial Creditor filed Company Petition No.(IB)-866(PB)/2018 before the Adjudicating Authority (National Company Law Tribunal, Principal Bench, New Delhi) under Section 7 of the Insolvency and Bankruptcy Code, 2016 (IBC in short) against Respondent No.2 - Margra Industries Ltd. Corporate Debtor, which has been admitted vide Impugned Order dated 15th March, 2019. Respondent No.3 - Mr. Rajender Kumar Girdhar, came to be appointed as Interim Resolution Professional (IRP). Being aggrieved, the Appellant - Mr. V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial Creditor includes a person to whom financial debt has been legally assigned or transferred . It was held that the outstanding loan amount has been duly assigned by Exim Bank to Edelweiss and Edelweiss came within the definition of Financial Creditor . 5. With regard to the dispute raised by the Corporate Debtor that incorrect amount had been claimed, it has been held by Adjudicating Authority that dispute over the quantum of default cannot be a ground to reject the Application under Section 7 as determination of quantum of financial debt is not in the domain of Adjudicating Authority. It was also observed that the Corporate Debtor would be free to raise objection regarding mismatch of dues and excess before the Resolution Professional/Committee of Creditors. Adjudicating Authority also found that the transaction showed that loan was disbursed against consideration for time value of money with a clear commercial effect of borrowing. It has been found that the record shows that Corporate Debtor availed the loan facility and committed default in repayment of huge outstanding financial debt. Consequently, Adjudicating Authority admitted the Application. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decided the question. It is argued that if there is already a dispute pending and under consideration in another Forum like DRT, the Application under Section 7 could not have been moved by the Financial Creditor as it would tantamount to Resolution Professional replacing judicial Forum which was considering the dispute. It is also argued that the object of IBC is to provide for resolution so that the Company can be saved and the Company could be kept as a going concern. The Counsel submitted that the Financial Creditor had already obtained Orders from DRT for disposing properties of the Corporate Debtor and Section 7 Application was filed to get disposed the remaining assets of the Corporate Debtor and in such set of facts, Section 7 could not have been invoked as it is against the object of IBC. The learned Counsel stated that whether or not there was a proper assignment done in favour of Edelweiss, was being looked into by DRT and when this is so, Adjudicating Authority should not have dealt with and held that there was proper assignment. 7. We have gone through the matter and heard the submissions made. We are not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eless allegations. In the present matter, the Assignment Deed (Page 380 @ 411) shows that Exim Bank executed Assignment Deed in favour of Edelweiss and the same was duly registered. The document clearly refers in the schedule (Page 411) to the Corporate Debtor and the debt assigned. The argument that the Adjudicating Authority could not have looked into such document only because some dispute was raised before DRT has no substance. We find no reason to interfere with such findings of Adjudicating Authority. 10. The contention of the Appellant that if the Financial Creditor had already got sold part of the assets of the Corporate Debtor, taking direction from DRT, the Corporate Debtor could no more be kept a going concern and so, IBC could not be invoked, also deserves to be rejected. At the stage of admission of the Application under Section 7 of IBC, the Adjudicating Authority need not enter into such disputes raised. Section 7 (4) and (5) of IBC read as under:- (4) The Adjudicating Authority shall, within fourteen days of the receipt of the application under sub-section (2), ascertain the existence of a default from the records of an information ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting authority is required to afford reasonable opportunity of hearing to the Corporate debtor before passing its order. When the same matter was taken up before the Hon ble the Supreme Court of India vide Judgement dated 31st August, 2017 (2018) 1 SCC 407, it was observed in para - 28 of the Judgement as under:- 28. When it comes to a financial creditor triggering the process, Section 7 becomes relevant. Under the explanation to Section 7(1), a default is in respect of a financial debt owed to any financial creditor of the corporate debtor it need not be a debt owed to the applicant financial creditor. Under Section 7(2), an application is to be made under sub-section (1) in such form and manner as is prescribed, which takes us to the Insolvency and Bankruptcy (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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