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2021 (8) TMI 949 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - requirement of verification of genuineness of the Loan Agreement - HELD THAT - In view of what has been stated in the Application, the Financial Creditor, Dewesh Auto Creative Service, is hereby directed to submit before this Tribunal, the original Loan Agreement dated 19th December, 2014, within 15 days of the receipt of this Order, for Forensic Audit by the Government recognized laboratory for verification of the genuineness of the document. The copy of this Order be sent to the Resolution Professional and the Financial Creditor at its registered Office address by Speed Post and by E-mail, both, with proof of service.
Issues:
Initiating CIRP under Section 7 of IBC based on a Loan Agreement's genuineness. Analysis: The Company Petition was filed by the Financial Creditor under Section 7 of the Insolvency & Bankruptcy Code, 2016, for initiating Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor. The Interim Resolution Professional was appointed, followed by the Resolution Professional, as confirmed by the Tribunal. The RP initiated the process by issuing Form G and appointing a Forensic Auditor to conduct a forensic transaction audit. However, the Corporate Debtor raised objections regarding the genuineness of the Loan Agreement dated 19th December, 2014, claiming it was fabricated and not authenticated. The Corporate Debtor requested verification of the original document, but the Financial Creditor did not respond to the requests for producing the original agreement for inspection and verification. During the Committee of Creditors' meetings, the Forensic Auditor highlighted the need for further documents to reach conclusions on specific sections of the IBC. The Corporate Debtor questioned the veracity of the documents relied upon by the Financial Creditor. The Forensic Auditor advised obtaining a report from a recognized government forensic laboratory to confirm the document's authenticity. Despite reminders and requests, the Financial Creditor refused to provide the original Agreement for verification without a directive from the Tribunal. The RP sought the Transaction and Forensic Auditor's opinion on the Loan Agreement's genuineness, emphasizing its importance for completing the forensic audit report. The Transaction and Forensic Auditor recommended verifying the document through a Government Forensic Laboratory. The Auditor pointed out discrepancies in the Corporate Debtor's balance sheet, lack of auditor qualifications, and challenges to the Financial Creditor's claims. The RP faced challenges in performing duties due to the Financial Creditor's lack of cooperation, hindering the CIRP's successful conclusion without verifying the Loan Agreement's genuineness. The Tribunal directed the Financial Creditor to submit the original Loan Agreement for forensic audit by a recognized government laboratory within 15 days. The Order was to be sent to the Resolution Professional and the Financial Creditor, emphasizing the importance of complying with the directive for a successful resolution process.
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