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TMI Blog2023 (4) TMI 551X X X X Extracts X X X X X X X X Extracts X X X X ..... y the 'Adjudicating Authority'/ 'National Company Law Tribunal, Kochi Bench, Kerala'. 2. Earlier 'Adjudicating Authority'/ 'National Company Law Tribunal, Kochi Bench' while passing an Impugned order on 25.1.2023 at Paragraph No.17, had observed the following: Para 17" Coming to CP(IB)/06/KOB/2022, we are of the considered view that the application filed in the capacity as a 'Financial Creditor' for a 'Financial Debt' which is recoverable from the 'Corporate Debtor' viz., M/s Mango Meadows Agricultural Pleasure Land (P) Limited is a fit case for admission and initiation of 'CIRP' against the 'Corporate Debtor'. The documents produced on record prove the disbursement of various loan facilities by the 'Financial Creditor' to the 'Corporate Debtor' and the failure to repay the Loan". and admitted the Application/Petition by initiating 'CIRP' against the 'Corporate Debtor'/ Company, declared 'Moratorium' and appointed an 'Interim Resolution Professional' etc., Appellant's Submissions: 3. The Learned Senior Counsel for the Appellant, submits that the 'Adjudicating Authority'/ 'Tribunal', on an erroneous appreciation of the 'Facts and Law' had proceeded to admit the Section 7 Appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Appellant. Another sum of Rs.2/- crores was advanced by the Respondent and a sum of Rs.1.25/- crores was returned to the Respondent by the Appellant on the same day. But the same was not reflected in the Accounts of the company. 8. The clear cut stand of the Appellant, is that in spite of repayment of a whopping sum by the company on the same day 'Respondent'/'Financial Creditor' had not accounted the same, in the 'Loan Account.' In reality the said amounts were diverted to some other account without an Authority, so as to increase the dues of the company with the ill motive of taking over the assets of the company. 9. In short, the plea of the Appellant, is that even the repayments made by the Appellant company are not fully and correctly reflected in the Main Petition. As a matter of fact, neither the payments are effected by the company nor the dates of actual payments tally with the statement produced by the Respondent/'Financial Creditor'. 10. The Learned Counsel for the Appellant, bring to the notice of this 'Tribunal' that the Appellant/Applicant filed an IA No. 285/2022 in Main CP(IB)/06/2022 (under Section 65 of the I & B Code, 2016) seeking for a declaration th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to be rejected. The Hon'ble High Court of Kerala had rejected the challenge against the constitutional validity of Sec 7 of I and B Code, 2016 as an arbitrary and discriminatory one. 15. The contention of the 'Appellant' is that inspite of an offer, from the 'Appellant', to settle the dues, to the 'Respondent', in the form of a Take over of Loan by the Kerala Financial Corporation, the Respondent has not communicated 'any decision'. Further, the intention of the Respondent/ 'Financial Creditor' is to destroy the Appellant and not to recover the 'amounts due' and the 'Default sum', can be settled by the Appellant, in the event of the take over of the 'Loan' by the 'Kerala Financial Corporation'. 16. The 'Respondent'/'Financial Creditor'/'Petitioner' had claimed a sum of Rs.18,48,84,627/- and interest from 01.12.2021, a sum of Rs.5,09,49,391/-. In all the amount claimed to be in default was Rs.23,58,34,018/- and the same is outstanding. The date of default was on 18.07.2019, when the last remittance of Rs.9,99,976.40/- paise was received by Respondent/Petitioner. 17. It is averred in the 'Form 1 under part IV of the Application (filed under Section 7 of the I & B Code 2016, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the base of the I & B Code, 2016 but it is the 'Cash Liquidity', which is the cementing platform for triggering the 'Corporate Insolvency Resolution Regime'. 22. Under the Insolvency and Bankruptcy Code, 2016, the shift is from inability to pay, to the existence of a Default. A mere 'Dispute' about the quantum of payment, does not infringe the right of a 'Financial Creditor', to prefer an Application under Section 7 of the I & B Code. Even though a 'Debt' is disputed, if it is more than Rs.1/- crore (after Amendment to the Code) and where the minimum sum of Default is one lakh (prior to Amendment), the Application /Petition filed by the concerned party/entity/organization/Bank etc., is to be admitted and there is no escapade on that, as opined by this Tribunal. 23. It is aptly pointed out by this Tribunal, that the circumstance under which the 'Corporate Debtor', is not able to repay the 'Financial Debt', need not be taken as a 'Defence', in a proceeding under the Code. The reason for incapacity/inability of a 'Corporate Debtor', to pay its 'Debt', is not required to be gone into/looked into by an 'Adjudicating Authority'/ 'Tribunal', in the considered opinion of this 'Tribunal' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor'/Petitioner, the main CP/IB)/06/KOB/2022 was filed before the 'Adjudicating Authority'/ 'Tribunal'. 30. In the present case, there is no dispute, as to the 'Loan', availed but according to the Respondent/'Financial Creditor', the 'Corporate Debtor' had paid only a sum of Rs.9,99,976.40/- paise and this was given credit to. But the 'Corporate Debtor', before the 'Adjudicating Authority' came out with a version that a sum of Rs.11,00,000/- paid by it, was not given credit to. 31. Be that as it may, it is a crystalline fact that the exact quantum of amount to be paid by a party is not a decisive one, especially, in an application filed under sec 7 of the I and B code 2016 by the Petitioner/ 'Financial Creditor'. If the amount claimed is more than the threshold limit as per the section 4 of the I & B Code 2016, the petition can be admitted. 32. On going through the Impugned Order dt.25.1.2023 in CP/(IB)/06/KOB/2022, on the file of the 'Adjudicating Authority'/'Tribunal' it is evident that 'Corporate Debtor' side took some time to pay the admitted default but not paid any sum. Also that, the debt sum, payable by the 'Corporate Debtor' as on 11.11.2022, was more than Rs.2 crores a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is endowed with a subjective discretion, to admit the Section 7 Application filed by a party under the I & B Code, 2016 once the 'Debt and Default' are proved, to its satisfaction. 40. A 'moonshine' or an 'illusory' defence, cannot be put forward by a party, and the same can be brushed assigned by an 'Adjudicating Authority'/ 'Tribunal' in a given case, and even the term 'claim',(as per Section 3(6) of the code) points out 'a right to payment, despite the fact the same is controverted/disputed'. 41. In the light of foregoing detailed discussions and this 'Tribunal', keeping in mind a prime fact that the Insolvency resolution process commences when a default takes place, and in the instant case 'Debt and Default' having been established to its subjective satisfaction, comes to a consequent conclusion that the Adjudicating Authority'/ 'National Company Law Tribunal, Kochi Bench' had rightly admitted the Main CP/IB/06/KOB/2022 preferred by Respondent/ 'Financial Creditor'/Petitioner and the same is free from any legal flaws. Viewed in that perspective the instant 'Appeal' sans merits. Result : In fine, the instant Comp. Appeal (AT) CH (INS) No.88 of 2023 is dismissed, No costs. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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