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TMI Blog2020 (5) TMI 563X X X X Extracts X X X X X X X X Extracts X X X X ..... pam Sanghi, Mr. Dhruv Gupta and Mr. Anurag Mehta, Advocates. JUDGMENT The twin appeals preferred by the same 'Financial Creditor' viz 'Allahabad Bank' against two different 'Corporate Debtors' primarily assail the orders passed by the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench, Mumbai on 16th October, 2019 in MA 627/2019 & MA 3067/2019 in C.P.(IB)-3631(MB)/2018. The impugned orders have been assailed through the medium of the instant appeals by the 'Financial Creditor' contending that the Adjudicating Authority has, apart from giving a go by to the provisions of the Insolvency and Bankruptcy Code, 2016 ("I&B Code" for short), also failed to follow the dictum of law laid down by the Hon'ble Apex Court in "Innovent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 'I&B Code' appear to have been filed by the 'Financial Creditor' on 5th September, 2018 and the matter was pending consideration before the Adjudicating Authority since 18th September, 2019. However, instead of admitting or rejecting the application, the Adjudicating Authority proceeded to pass the impugned order which has been assailed through the medium of instant appeals. 4. Heard learned counsel for the parties and perused the record. 5. The question for consideration is whether the Adjudicating Authority was justified in ignoring the time frame prescribed under Section 7 of the 'I&B Code' and embarking upon an enquiry to determine whether the applications filed under Section 7 contained false information, when the matters were at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s' within 180 days and the extended period prescribed is 270 days. With the latest amendment, provision has been made for inclusion of period of judicial intervention, thereby taking the total extended period upto 330 days. A mere glance at the legal framework governing 'Corporate Insolvency Resolution Process' brings it to the fore that speed is the password and all authorities under the 'I&B Code' have to adhere to the prescribed timelines. It is apt to refer to the observations of the Hon'ble Apex Court in "Innoventive Industries Limited v. ICICI Bank and Anr.- (2018) 1 SCC 407":- "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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the "debt", which may also include a disputed claim, is not due. A debt may not be due if it is not payable in law or in fact. The moment the adjudicating authority is satisfied that a default has occurred, the application must be admitted unless it is incomplete, in which case it may give notice to the applicant to rectify the defect within 7 days of receipt of a notice from the adjudicating authority. Under sub-section (7), the adjudicating authority shall then communicate the order passed to the financial creditor and corporate debtor within 7 days of admission or rejection of such application, as the case may be. xxx xxx xxx 30. On the other hand, as we have seen, in the case of a corporate debtor who commits a default of a fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty. However, the 'I&B Code' does not envisage a pre-admission enquiry in regard to proof of default by directing a forensic audit of the accounts of the 'Financial Creditor', 'Corporate Debtor' or any 'financial institution'. Viewed thus, the impugned order cannot be supported. Application under Section 75 of the 'I&B Code' on behalf of the 'Corporate Debtors' cannot be permitted to frustrate the provisions of the 'I&B Code' when the matter is at the stage of admission. Section 75 is a penal provision which postulates an enquiry and recording of finding in respect of culpability of the Applicant regarding commission of an offence. The same cannot be allowed to thwart the initiation of 'Corporate Insolvency Resolution Process' unless in a gi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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