TMI Blog2019 (5) TMI 1935X X X X Extracts X X X X X X X X Extracts X X X X ..... llant intends to settle the matter therefore the matter was adjourned time to time. Even after six months as the matter was not settled, the case was heard on merit - Mr. Vipul Ganda, learned counsel for the Appellant initially argued the case and subsequently submitted that Mr. Ashok Oswal is interested to argue the case on merit. Inspite of the fact that the Appellant Mr. Ashok Oswal has appointed the counsel, the Appellant are allowed to address the case on merit of the appeal. Mr. Ashok Oswal wanted to read written argument instead of arguing the case on merit. Nothing specific in his submission transpired. However, he is allowed to file written submissions by 8th May, 2019. The same have been filed on 8th May, 2019 vide Diary No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. The sanctioned account of Cash Credit Facility was ₹ 2,00,00,000/- and Export Packing Credit Facility was ₹ 13,45,00,000/-. From the aforesaid account a Term Loan of ₹ 2,11,643/- was also taken. 4. The grievance of the Appellant is that the Corporate Debtor was surprised and shocked to receive notice on 16th May, 2016 under Section 13(2) of the SARFAESI Act, 2002 stating that the account of the Corporate Debtor has become NPA on 30th September, 2015. It is stated that the account of the Corporate Debtor was regular till July, 2015, except a minor delay in payment of the overdue interest in the month of August, 2015, which was well within 90 days as per master circular. It is also alleged that UCO Bank filed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 7 was not maintainable. Further according to learned counsel for the Appellant, after initiating multiple recovery proceeding against the Corporate Debtor during last three years, the application under Section 7 was not maintainable and provision of Sub-Section (3) of Section 7 was not followed. 7. In Innoventive Industries Ltd. Vs. ICICI Bank and Ors. reported in (2018)1 SCC 407 , the Hon ble Supreme Court while dealt with Section 7 of the I B Code observed and held as follows:- 27. The scheme of the Code is to ensure that when a default takes place, in the sense that a debt becomes due and is not paid, the insolvency resolution process begins. Default is defined in Section 3(12) in very wide terms as meaning n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itself that a default has occurred. It is of no matter that the debt is disputed so long as the debt is due i.e. payable unless interdicted by some law or has not yet become due in the sense that it is payable at some future date. It is only when this is proved to the satisfaction of the adjudicating authority that the adjudicating authority may reject an application and not otherwise. 8. In the present case, as it is not disputed that there is a debt which is more than ₹ 1 Lakh and the Corporate Debtor failed to pay the debt, we hold that the application under Section 7 was maintainable. 9. On 7th December, 2018, we observed that prima facie there is no merit in the appeal but the counsel for the Appellant informed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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