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2023 (2) TMI 1139 - Tri - Insolvency and BankruptcyMaintainability of petition - applicability of principles of Res Judicata - initiation of CIRP - Financial Creditors - existence of debt due and payable or not - no opportunity was given to the Corporate Debtor to submit a resolution plan or restructure its debt under an inter creditor arrangement - violation of the RBI circular dated 07.06.2019 or not - non-payment on the part of Corporate Debtor - Company Petition is barred by Res Judicata, or not, as a petition filed in respect of the same alleged debt and default, arising of the same transaction and cause of action by the Applicant was adjudicated by this Tribunal - HELD THAT - It is observed that the Corporate Debtor on 09.07.2018, had submitted a resolution plan which was rejected by the Financial Creditor on frivolous and arbitrary grounds - Upon perusal of records, this Bench is of the considered opinion that the money owed by the Corporate Debtor to the Financial Creditor is legally due and payable. In the lights of the Order passed by Hon'ble Supreme Court in Swiss Ribbons Pvt. Ltd. Ors. Vs. Union of India Ors. 2019 (1) TMI 1508 - SUPREME COURT upholding the Constitutional validity of IBC, the position is very clear that unlike Section 9, there is no scope of raising a 'dispute' as far as Section 7 petition is concerned. As soon as a 'debt' and 'default' is proved, the adjudicating authority is bound to admit the petition. The application made by the Financial Creditor is complete in all respects as required by law. It clearly shows that the Corporate Debtor is in default of a debt due and payable, and the default is in excess of minimum amount stipulated under section 4(1) of the IBC. Therefore, the debt and default stands established and there is no reason to deny the admission of the Petition. In view of this, this Adjudicating Authority admits this Petition and orders initiation of CIRP against the Corporate Debtor. Petition admitted.
Issues Involved:
1. Maintainability of the Petition 2. Doctrine of Res Judicata 3. Violation of RBI Circular 4. Declaration of Account as Fraud 5. Insufficiently Stamped Documents 6. Authority to File Petition 7. Impact of CIRP on Corporate Debtor's Assets and Operations Issue-wise Detailed Analysis: 1. Maintainability of the Petition: The Corporate Debtor raised a preliminary objection on the maintainability of the petition, arguing that a similar petition was dismissed previously without liberty to refile. The Corporate Debtor contended that the new application is barred by the principle of Res Judicata. However, the Tribunal noted that the earlier petition was dismissed based on an invalid RBI circular, making the current petition maintainable. 2. Doctrine of Res Judicata: The Corporate Debtor argued that the petition is barred by Res Judicata, citing previous judgments. The Tribunal acknowledged this but distinguished the current petition from the earlier one, noting that the earlier dismissal was due to the invalidity of the RBI circular, not on the merits of the case. 3. Violation of RBI Circular: The Corporate Debtor claimed that the petition violated the RBI circular dated 07.06.2019, as no opportunity was given to submit a resolution plan. The Tribunal found that the Corporate Debtor had submitted a resolution plan on 09.07.2018, which was rejected by the Financial Creditor on grounds deemed frivolous and arbitrary by the Corporate Debtor. 4. Declaration of Account as Fraud: The Corporate Debtor argued that its account was declared as 'fraud' based on a forensic audit report, which is under challenge in the Delhi High Court. The Tribunal noted that the High Court had dismissed the Corporate Debtor's challenge, stating that sufficient opportunity had been given to the Corporate Debtor. 5. Insufficiently Stamped Documents: The Corporate Debtor contended that the documents relied upon by the Financial Creditor were insufficiently stamped and thus inadmissible. The Tribunal did not find this argument sufficient to dismiss the petition, as the primary focus was on the debt and default. 6. Authority to File Petition: The Corporate Debtor questioned the authority of the person filing the petition, arguing that the Power of Attorney was not properly executed. The Tribunal found that the application was complete in all respects as required by law, and the Financial Creditor had the necessary authority to file the petition. 7. Impact of CIRP on Corporate Debtor's Assets and Operations: The Corporate Debtor argued that initiating CIRP would negatively impact its assets and operations, including the termination of its prime asset under the Exploration Licensing Policy. The Tribunal, however, focused on the legal obligation to repay the debt and found that the debt and default were established. Findings and Order: The Tribunal concluded that the money owed by the Corporate Debtor to the Financial Creditor is legally due and payable. The Tribunal admitted the petition under Section 7 of the IBC, initiating the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. A moratorium under Section 14 of the IBC was declared, and an Interim Resolution Professional (IRP) was appointed. The Tribunal directed the Financial Creditor to deposit Rs. 2,00,000 with the IRP for expenses and ordered immediate communication of the order to relevant parties. Conclusion: The Tribunal admitted the petition, initiating CIRP against the Corporate Debtor, and appointed an IRP to manage the process. The objections raised by the Corporate Debtor were not found sufficient to dismiss the petition, and the debt and default were established.
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