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TMI Blog2019 (4) TMI 921X X X X Extracts X X X X X X X X Extracts X X X X ..... T for initiating Corporate Insolvency Resolution Process under Section 10 of the 1B Code in Form-6. 3. Pursuant to the said Resolution, Hardik Industrial Corporation Private Limited through its Authorized Representative filed this petition before this Tribunal. 4. M/S. Hardik Industrial Corporation Private Limited is a company registered under the Companies Act having its Registered Office at A/3, Rameshwar Complex, Ghogha Circle, Bhavnagar 364 002 (Gujarat) with a Paid Up Share Capital of Rs. 1000.00 lacs. The list along with latest address of the Directors of the corporate applicant is placed at page No. 7 to the application marked Annexure 1. 5. It is further represented by the corporate debtor that the applicant company has the following Financial Creditors; 6. It is also stated that there are Operational Creditors to the extent of Rs. The corporate debtor also stated that the Company is having Statutory Liabilities to the extent of Rs. as on 27.01.2018. The applicant also stated that the company is having contingent liabilities to the extent of Rs. It is further stated that Income Tax Department has issued a Notice under Section 156 of the Income Tax Act, 1961 for re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iven the names and addresses of the financial creditors, operational creditors of the company and details of dues outstanding to them and also particulars of the security created on the assets of the company. Despite the details given above, the applicant company has disclosed the debts owed to the company as well as the company owed to others. 11. On filing of this Application, Notice was issued to the Financial Creditor. In response to the Notice, State Bank of India appeared through their Learned Counsel. 12. That, the State Bank of India, being financial creditor, by its affidavit in reply raised objections and has controverted and denied the bona fide of the application filed for initiation of Insolvency Resolution Process under Section 10 of 1B Code. The bank has also objected for grant of any relief - interim, final or otherwise. 13. It is submitted by the counsel appearing on behalf of State Bank of India that the petition is misconceived, untenable and suffers from vices, lacunae, infirmities, delay and lapses. That, the applicant did not come out with clean hands though it was duty bound to candidly disclose full facts of its case and produce necessary documents with a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olvency) No. 81 of 2017, wherein, it was held that . Quote 20. Under both Section 7 and Section 10, the two factors are common i.e. the debt is due and there is a default. Sub-Section (4) of Section is similar to that of Sub-Section (4) of Section 10. Therefore, we, hold that the law laid down by the Hon'b/e Supreme Court in "Innovative Industries Ltd. (Supra) is applicable for Section 10 also, wherein the Hon 'ble Supreme Court observed as "The moment the adjudicating authority is satisfied that a default has occurred, the application must be admitted unless it is incomplete, in which case it may give notice to the applicant to rectify the defect within seven days of receipt of a notice from the adjudicating authority. " 21. In an application under Section 10, the "financial Creditor" or "operational Creditor", may dispute that there is no default or that debt is not due and is not payable in law or in fact. They may also oppose admission on the ground that the Corporate Applicant is not eligible to make application in view of ineligibility under Section 11 of the I & B Code. The Adjudicating Authority on hearing the parties and on perusal of record, if satisfied tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I & B Code and Form 6 has been supplied by a corporate Applicant/ Corporate Debtor and the application is otherwise complete. Non-mentioning of suit(s) pending between the parties cannot termed to be suppression of facts nor can be a ground to reject the application. In fact, once the application under Section 10 is admitted, all such related proceedings, including suits for recovery of moveable or immovable property of the Corporate Debtor and other proceeding cannot proceed further in any Court or Tribunal or Authority in view of order of 'moratorium' as may be declared under section 13 and prohibition that may be imposed under section 14 of I & B Code. 25. Similarly, if any action has been taken by a Financial Creditor' under section 13(4) of the SARFAESI Act, 2002 against the Corporate Debtor or a suit is pending against Corporate Debtor under section 19 of DR T Act, 1993 before a Debt Recovery Tribunal or appeal pending before the Debt Recovery Appellate Tribunal cannot be a ground to reject an application under section 10, if the application is complete. 26. Any proceeding under section 13(4) of the SARFAESI Act, 2002 or suit under section 19 of the DR T Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15 of the Code and Regulation 6 of Insolvency and Bankruptcy Board of India (Insolvency Resolution Process for Corporate Persons) Regulations, 2016. 23. This Adjudicating Authority hereby order moratorium under Section 13(1)(a) of the 1B Code prohibiting the following as referred to in Section 14 of the Code; (a) the institution of suits or continuation of pending suits or proceedings against the Company/corporate debtor including executton of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; (b) transferring, encumbering, alienating or disposing of by the Company/corporate debtor any of its assets or any legal right or beneficial interest therein; (c) any action to foreclose, recover or enforce any security interest created by the Company/corporate debtor in respect of its property including any action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (54 of 2002); (d) the recovery of any property by an owner or lessor where such property is occupied by or in the possession of the Company/ corporate debtor. (i) There shall not be any interruption, suspension or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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