2021 (5) TMI 472 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of dues - here the applicant is Corporate Applicant - main matter against the applicant has been filed under section 7 of IBC, 2016 - HELD THAT - It is clearly evident from the bare perusal of the section 10(3) (a) of IBC, 2016, that it deals with the 'Corporate Applicant' whereas, the applicant in the present application is 'Corporate Debtor' in the main matter i.e., IB-1772/ND/2019 along with that the main matter has been filed under section 7 of IBC, 2016 not under the section 10 of IBC, 2016. Hence, it is clearly evident that the application has been filed under section 10(3)(a) of IBC, 2016 whereas the main matter against the applicant has been filed under section 7 of IBC, 2016, meaning that the applicant is not the Corporate Applicant in the main matter. Thus, the present application is not maintainable and no direction prayed in the present application can be granted to the applicant. Application dismissed.

Summary

Issues:
- Application seeking production of balance sheets from 2008-09 till 2018-19 by the Respondent
- Maintainability of the application under section 10(3)(a) of IBC, 2016

Analysis:
1. Application seeking production of balance sheets:
- The Applicant sought to direct the Respondent to produce balance sheets from 2008-09 till 2018-19, claiming the investment made by the Respondent was in the form of equity contribution, not financial debt. The Applicant argued that balance sheets are crucial for adjudication purposes under Section 10(3)(a) of the IBC Code, 2016.
- The Respondent contended that the application was filed under incorrect provisions of law and should be dismissed, highlighting discrepancies between the sections under which the main application and the present application were filed.
- The Tribunal examined the documents and arguments presented, noting that the application was filed under section 10(3)(a) of IBC, 2016, meant for Corporate Applicants, whereas the main matter was under section 7. Consequently, the application was deemed not maintainable, leading to its dismissal.

2. Maintainability of the application under section 10(3)(a) of IBC, 2016:
- The Tribunal clarified that the application was filed under section 10(3)(a) of IBC, 2016, which pertains to Corporate Applicants initiating insolvency resolution processes. However, the Applicant was the Corporate Debtor in the main matter under section 7, not a Corporate Applicant, rendering the application improper.
- Citing the definitions of "Corporate Applicant" and the requirements for initiating corporate insolvency resolution processes by financial creditors under section 7, the Tribunal concluded that the present application did not align with the correct legal framework and hence could not be granted.

In conclusion, the Tribunal dismissed the application seeking production of balance sheets as it was not maintainable under the relevant provisions of the IBC, 2016. The judgment emphasized the importance of adhering to the correct legal procedures and sections when initiating insolvency resolution processes, ensuring alignment with the specific roles and responsibilities designated in the legislation.