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2019 (2) TMI 1852 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt - existence of debt and dispute or not - financial debt or not - HELD THAT - Initially the Petitioner filed petition u/s 7, IBC claiming himself to be a Financial Creditor, but on perusal of the record it appears that the Petitioner has given notice u/s 9, IBC pretending himself to be an Operational Creditor. The Petitioner has not filed any document to substantiate its claim of being a Financial Creditor and debt as Financial Debt. Petitioner s claim is totally based on the oral submission that he has given a credit to the Corporate Debtor, which is evident from the statement of account of Financial Creditor, from which amount has been transferred to the Operational Creditor s account. It is pertinent to mention that only by transferring amount to the account of Corporate Debtor, a person cannot claim to be a Financial Creditor. There are no documents to prove a financial debt. Instead of opposing these contradictions, the Corporate Debtor has admitted the liability to pay. On perusal of the record, it appears that the petition is collusive - petition dismissed.
Issues:
Company petition under section 7 of the Insolvency & Bankruptcy Code, 2016 (IBC) for Corporate Insolvency Resolution Process initiation by Financial Creditor against Corporate Debtor for non-payment. Analysis: The judgment pertains to a Company Petition filed under section 7 of the IBC by a Financial Creditor against a Corporate Debtor for failing to make a payment of a substantial amount. The Financial Creditor claimed that a financial debt of a specific amount remained unpaid by the Corporate Debtor, who had admitted the liability in their reply to the Tribunal. The petition was filed in the prescribed form under the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, claiming to be a financial creditor with the debt classified as a financial debt. The Financial Creditor provided detailed particulars of the financial debt in the petition, including the loan amount, interest rate, and payment details. Various documents were annexed to the petition, such as bank statements, confirmation letters, notices, and replies, to support the claim of the financial debt and the default by the Corporate Debtor. The affidavit in support of the petition confirmed the delivery of a demand notice under section 9 of the IBC to the Corporate Debtor, who failed to repay the amount or respond to the notice, indicating no dispute raised by the Corporate Debtor regarding the debt. In response, the Corporate Debtor contested the petition, claiming the liability was not ascertained due to constraints imposed by a High Court order related to an arbitration petition concerning a foreign award. The Corporate Debtor argued that they were unable to make payments due to the ongoing legal proceedings and injunctions. However, the Tribunal noted discrepancies in the Corporate Debtor's response, including contradictions regarding the nature of the debt and the admission of liability despite claiming inability to pay. The Tribunal observed that the Petitioner had initially filed the petition as a Financial Creditor under section 7 of the IBC but later issued a notice under section 9, indicating an operational creditor status. The lack of documentary evidence supporting the claim of being a Financial Creditor and the existence of a financial debt raised doubts about the credibility of the petition. The Tribunal highlighted the importance of providing complete and accurate documentation to substantiate claims under the IBC. Ultimately, the Tribunal dismissed the petition, citing prima facie contradictions, lack of documentary evidence, and the appearance of a collusive petition. The Registry was directed to communicate the order promptly to both the Financial Creditor and the Corporate Debtor. The judgment emphasizes the necessity of adherence to procedural requirements and the submission of valid evidence to support claims under the IBC.
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