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TMI Blog2017 (10) TMI 1532X X X X Extracts X X X X X X X X Extracts X X X X ..... djudicating Authority rightly admitted the application and passed the order of moratorium and prohibitory orders in accordance with 'I B Code' - Appeal dismissed. - Company Appeal (AT) (Insolvency) No. 71 of 2017 - - - Dated:- 17-10-2017 - Justice S.J. Mukhopadhaya, Chairperson And Balvinder Singh, Member(Technical)For Appellant : Shri Arun Kathpalia, Senior Advocate assisted by Ms. Saumya, Ms. Nidhi Nagpal and Ms. Tanushree Nigam, Advocates. For Respondent : Shri Ramji Srinivasan, Senior Advocate assisted by Shri Animesh Bisht, Shri Karan Khanna, Shri Sohil Yadav and Shri Tushar Bhardwaj, Advocates. JUDGMENT Sudhansu Jyoti Mukhopadhaya, Respondent- M/S. Edelweiss Asset Reconstruction Company Limited ('Financial Creditor') filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as I B Code ) for initiation of 'Corporate Insolvency Resolution Process' against Appellant-M/s. Bharti Defence and Infrastructure Limited- ('Corporate Debtor'). After notice and hearing the parties, the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench, Mumbai by impugned order dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) that it is not applicable, without stating any reason in support thereof. 5. It was further contended that no regulations have been framed by the Insolvency and Bankruptcy Board of India ( Board ) under Clause (O of sub-section (2) of Section 240 of the 'I B Code' for specifying such other record of evidence of default for the purpose of Clause (a) of subsection (3) of Section 7 and therefore, in the absence of such regulations specifring any record or evidence of default' as contemplated under Clause (a) of sub-section (3) of Section 7, the petition was not maintainable. 6. Reliance was also placed on Rule 239(1)(c) of the 'I B Code' whereunder the Central Government is empowered to frame rules only with respect to the form, manner and fee for making application before the Adjudicating Authority for initiating 'Corporate Insolvency Resolution Process' by 'Financial Creditor'. According to Learned Counsel for the appellant, the power under Section 239 cannot be construed to include specification of the records of default, which are required to be submitted to the Adjudicating Authority under sub-section (3) of Section 7. The power is c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 of the 'I B Code' in Form-I of the 'Adjudicating Authority Rules' and enclosed the records in terms of said Rules and therefore, the Form was complete and the Adjudicating Authority rightly admitted the application. 12. Similar issue fell for consideration before this Appellate Tribunal NeeZkanth Township and Construction Pvt. Ltd. Vs. Urban Infrastructure Trustees Limited in Company Appeal (AT) (Insolvency) No. 44 of 2017, this Appellate Tribunal by Judgment dated 11 th August, 2017 observed and held as follows: - 16. 'Financial Creditor' along with the application required to be furnished information and other facts as prescribed under sub-section (3) of Section 7. Where the Adjudicating Authority is satisfied that a default has occurred and the application under sub-section (2) -is complete, and there are no disciplinary proceedings pending against the proposed resolution professional, it can admit such application and in case the application is incomplete, required to provide 7 days' time to complete the record and on failure is to dismiss the application. 17. The aforesaid facts are to be considered from the procedure for initiation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icate- (a) the order under clause (a) of sub-section (5) to the financial creditor and the corporate debtor; (b) the order under clause (b) of sub-section (5) to the financial creditor, within seven days of admission or rejection of such application, as the case may be. 18. It is well settled that rules of procedure are to be construed not to frustrate or obstruct the process of adjudication under the substantive provisions of law. A procedural provision cannot overHde or affect the substantive obligation of the adjudicating authority to deal with applications under Section 7 merely on the ground that Board has not stipulated or framed Regulations with regard to sub-section 3(a) of Section 7. The language of Section 240, whereby Board have been empowered to frame regulations is clear that the said regulation should be consistent with the 'I B' Code and the ndes made thereunder by the Central Government. 20. The ndes framed by the Central Government under Section 239 having prescribed the documents, record and evidence of default as noticed above, we hold that in absence of regulation framed by the Board relating to record of default recorded with the informa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orporate debtor; (iii) financial statements showing that the debt has not been repaid; or (iv) an order of a court or tribunal that has adjudicated upon the non-payment of a debt, if any. 23. 'Form - C' attached to the Regulation relates to proof of claim of 'Financial Creditor' whereunder at Serial No. 10, the 'Financial Creditor' is supposed to refer the list of documents in proof of claim in order to prove the existence and non-payment of claim dues to the 'Operational Creditor'. Therefore, the stand of the appellant that the Board has not framed any Regulations, relating to clause (a) of sub-section (3) of Section 7, cannot be accepted. 13. In the present case, the Appellant-'Corporate Debtor' has enclosed the application preferred by the Respondent-'Financial Creditor' under Section 7 in Form 1 as Annexure-A- 13 (Colly.). Therein the Respondent'Financial Creditor' at Part V has given the details of the particulars of the 'Financial Debt' (Documents, Records and Evidence of default). In support of the details of security held by or created for the benefit of the 'Financial Creditor' ..... X X X X Extracts X X X X X X X X Extracts X X X X
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