2022 (7) TMI 578 - AT - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - Section 10A of the IBC 2016 - HELD THAT - This Tribunal has heard the Ld. Counsels appearing for the respective parties at the stage of Admission and after a careful consideration of the arguments advanced on either side, this Tribunal is of the considered view that the Appellant/Corporate debtor is not entitled to get an interim relief of stay of the impugned order passed by the Adjudicating Authority. However, since the contentions advanced on either side require a detailed rumination in the hands of this Appellate Tribunal, this Tribunal is per forced to direct the Ld. Counsel for the R-1/Financial Creditor to take notice and to file Reply/Response (on both modes) before the office of the Registry within two weeks from today, and to serve the copy to the other side without fail. The Ld. Counsel for the Appellant is required to serve the Appeal Paper Book(s) to the Ld. Counsel for the R-1/Financial Creditor through email within two days from today (if not done already). The email address shall be furnished by the Ld. Counsel for the Respondent No.1 to the Ld. Counsel for the Appellant to do the needful in this regard. This Tribunal directs the Appellant to file Rejoinder within one week thereafter, after the receipt of the Reply/Response, Status report of Respondent No.2/IRP before the Office of the Registry (on both modes) and to serve a copy to the other side - The Registry is directed to list the matter on 1st August, 2022.

Summary

Issues:
1. Interpretation of default under Section 10A of the IBC 2016.
2. Consideration of written submissions of the Corporate Debtor.
3. Request for interim relief and stay of the impugned order.

Interpretation of Default under Section 10A of the IBC 2016:
The impugned order was passed by the Adjudicating Authority, stating the defaults in a loan account under Contract No. 179643. The Adjudicating Authority observed that defaults on or after 05.04.2020 fall under Section 10A of the IBC 2016, which cannot be considered as default. The Adjudicating Authority found the actual default by the Corporate Debtor to be Rs. 1,12,73,387/-, leading to the admission of the Corporate Debtor into insolvency due to established debt and default exceeding the threshold limit of Rs. One Crore.

Consideration of Written Submissions of the Corporate Debtor:
The Senior Counsel for the Appellant argued that the Adjudicating Authority failed to consider the written submissions of the Corporate Debtor fully, leading to a miscarriage of justice. The Appellant expressed readiness to deposit Rs. 1,12,50,000 before the Tribunal and requested an interim relief for stay of the impugned order to secure justice.

Request for Interim Relief and Stay of the Impugned Order:
The Senior Counsel for the Respondent No.1, a Financial Creditor, contended that the debt and default were established, with the Corporate Debtor owing Rs. 84,23,75,000 under a loan agreement. The Respondent argued against granting interim relief, emphasizing the ongoing default and the Corporate Debtor's liability to pay the outstanding amount. The Tribunal denied the Appellant's request for interim relief but directed further filings and set a future hearing date.

This judgment involved the interpretation of default under the IBC 2016, the consideration of written submissions of the Corporate Debtor, and a request for interim relief and stay of the impugned order. The Adjudicating Authority's findings on default, debt, and admission into insolvency were crucial, along with arguments regarding the miscarriage of justice due to incomplete consideration of written submissions. The Tribunal's decision to deny interim relief and schedule further filings highlighted the complexity of the case and the need for detailed examination. The matter was directed to proceed with additional filings and a future hearing date for resolution.