TMI BlogInitiation of corporate insolvency resolution process by financial creditor [ Section 7 ]X X X X Extracts X X X X X X X X Extracts X X X X ..... red. Vide Notification S.O.1091(E) dated 27th February, 2019, the Central government had notified following persons, who may file an application for initiating CIRP against a corporate debtor before the Adjudicating Authority, on behalf of the Financial Creditor:- a guardian; an executor or administrator of an estate of a financial creditor; a trustee (including a debenture trustee); and a person duly authorized by the Board of Directors of a Company. The Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. Application by financial creditor Rule 4 . (1) A financial creditor, either by itself or jointly, shall make an application for initiating the CIRP again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tments, and not promised flats as per a brochure. The default under section 7 need not be qua the applicant or applicants. Any number of applicants, without any amount being due to them, could move an application under section 7, if they are financial creditors (FCs) and there is a default, even if such default is owed to none of the applicants but to any other FC. It does not matter whether a person has one or more allotments in his name or in the name of his family members. As long as there are independent allotments made to him or his family members, all of them would qualify as separate allottees. Where the financial debt is in form of securities or deposits The First proviso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ond proviso within thirty days of the commencement of the said Act, failing which the application shall be deemed to be withdrawn before its admission. Explanation - For the purposes of this sub-section, a default includes a default in respect of a financial debt owed not only to the applicant financial creditor but to any other financial creditor of the corporate debtor. Filling application [ Section 7(2) ] The financial creditor shall make an application under section 7(1) in such form and manner and accompanied with such fee as may be prescribed. Encloser requirement with application [ Section 7(3) ] The financial creditor shall, along with the application furnish - (a) record of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a default from the records of an information utility or on the basis of other evidence furnished by the financial creditor under section 7(3). Provided that if the Adjudicating Authority has not ascertained the existence of default and passed an order under section 7(5) within such time, it shall record its reasons in writing for the same. Admission or Rejection application by Adjudicating Authority [ Section 7(5) ] Where the Adjudicating Authority is satisfied that- (a) a default has occurred and the application under section 7(2) is complete, and there is no disciplinary proceedings pending against the proposed resolution professional, it may, by order, admit such application ; ..... X X X X Extracts X X X X X X X X Extracts X X X X
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