2018 (5) TMI 175 - AT - Insolvency and Bankruptcy

Corporate Insolvency Resolution Process - non-disclosure of facts beyond the statutory requirement under the I & B Code read with relevant form - Held that - The case of the Appellant being covered by decision of this Appellate Tribunal in M/s Unigreen Global Private Ltd. Vs. Punjab National Bank & Ors. 2018 (1) TMI 505 - NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI we set aside the impugned order dated 28.11.2017 and remit the case to the Adjudicating Authority to consider application under Section 10 of I & B Code afresh. If the application is otherwise complete, it will admit the application. However, in case it is incomplete, the Adjudicating Authority will grant time to the Appellant to remove the defects. If any statement made in Form- 6 is misleading, it will be open to the Adjudicating Authority to pass appropriate order in accordance with law. The appeal is allowed with aforesaid observation.

Summary

Issues: Application under Section 10 of the Insolvency & Bankruptcy Act, 2016 rejected on extraneous grounds.

Detailed Analysis:

1. The Appellant filed an application under Section 10 of the Insolvency & Bankruptcy Code. The Adjudicating Authority rejected the application, considering allegations by home buyers and others, stating that certain factors could be taken into account if the corporate debtor had not disposed of a significant amount of land before the application. The Authority found no merit in the petition and rejected it, communicating the order to the Corporate Debtor and the Financial Creditor.

2. The Appellant argued that the application was complete, and even if presumed incomplete, the Authority should have allowed time to rectify any defects. It was contended that the application cannot be rejected on extraneous grounds beyond the scope of the Insolvency & Bankruptcy Code.

3. The 1st Respondent, Canara Bank, stated that the Appellant was asked to provide additional details about assets sold before the application, but no such stipulation was in Form-6, the application format under Section 10. The Code, Rules, or Regulations do not mandate disclosing lands sold or assets transferred before the application.

4. It was further argued that the Appellant had not disclosed certain facts, but such grounds cannot justify rejecting the application unless those facts were required as per Form-6. The Tribunal clarified that allegations against the Corporate Debtor need not be decided in the Section 10 application.

5. Referring to a previous judgment, the Appellate Tribunal emphasized that if all required information is provided in Form-6 and the Corporate Applicant is not ineligible under Section 11, the Adjudicating Authority must admit the application. The Authority cannot reject the application on other grounds unrelated to the Code or Form-6 requirements.

6. The Tribunal set aside the impugned order and remitted the case to the Adjudicating Authority to reconsider the Section 10 application. If complete, the Authority should admit it; if incomplete, grant time for rectification. Misleading statements in Form-6 may lead to appropriate action. The appeal was allowed with these observations, and no costs were awarded.