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2024 (5) TMI 570 - AT - Insolvency and BankruptcyAdmission of Section 7 Application - default committed by Corporate Debtor in paying the amount due and payable - Non-performing assets - existence of debt and default or not - liability not denied - HELD THAT - There is no dispute to the outstanding amount due on the Corporate Debtor. Sequence of events clearly indicate that at no stage Corporate Debtor has denied its liability. In reply to the notice under Section 13, sub-section (2) of the SARFAESI Act, the Appellant cited reasons for not making the payment, but liability to make payment was not denied. The Adjudicating Authority by the impugned order has found that Financial Creditor has been able to establish the factum of existence of financial debt and its default. The finding recorded by the Adjudicating Authority that there is a financial debt, which is in default, does not warrant any interference by this Tribunal in the present Appeal. Debt and default having been proved, the Adjudicating Authority has rightly admitted Section 7 Application filed by the Financial Creditor. Thus, no grounds have been made out to interfere with the impugned order in the present Appeal. There is no merit in the Appeal. The Appeal is dismissed.
Issues Involved:
1. Admission of Section 7 Application 2. Default and Non-Performing Asset (NPA) Classification 3. Opportunity to File Reply 4. Settlement Efforts and One-Time Settlement (OTS) Proposals Summary: 1. Admission of Section 7 Application: This Appeal by a Suspended Director of the Corporate Debtor challenges the order dated 10.10.2023, admitting Section 7 Application filed by Indian Overseas Bank. The Appellant, aggrieved by the admission, has come up in this appeal. 2. Default and Non-Performing Asset (NPA) Classification: The Corporate Debtor availed various facilities from Indian Overseas Bank, which classified the account as Non-Performing Asset (NPA) on 02.05.2022, effective from 31.03.2022, due to default in payment. The Bank demanded payment of Rs.67,12,33,943.83/- as on 30.06.2022 and issued notice u/s 13(2) of the SARFAESI Act, 2002, claiming Rs.69,38,78,239/-. 3. Opportunity to File Reply: The Corporate Debtor did not file a reply to the Section 7 Application despite multiple opportunities granted by the Adjudicating Authority. The Appellant argued that the Corporate Debtor should have been granted a second chance to file the reply on 06.10.2023. However, the Adjudicating Authority heard the Section 7 Application and admitted it by order dated 10.10.2023. 4. Settlement Efforts and One-Time Settlement (OTS) Proposals: The Appellant endeavored to liquidate the dues of all Banks, including Respondent No.1, and sought time for settlement. Various OTS offers were made, including an offer of Rs.120 crores, but were not accepted by the Bank. The Appellant's inability to make upfront payments and submit proposals led to the rejection of these offers. The Tribunal noted that the Corporate Debtor did not deny its liability in replies to notices and failed to make payments due to financial constraints. Conclusion: The Tribunal found no merit in the appeal, stating that the Financial Creditor established the existence of financial debt and default. The Adjudicating Authority rightly admitted the Section 7 Application. The appeal was dismissed, and the interim order vacated.
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