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TMI Blog2022 (6) TMI 1221X X X X Extracts X X X X X X X X Extracts X X X X ..... r (T) For the Appellant : Anandha Gomathy and B. Ramanakumar, Ld. Counsels ORDER IA/1186(CHE)/2021 The Applicant is represented by the Ld. Counsel Ms. Anandha Gomathy and the Respondent is represented by the Ld. Counsel Mr. B. Ramanakumar through Video Conferencing. IA/1186(CHE)/2021 has been filed by the Respondent seeking condonation of delay of 14 days in filing the counter. The same is hereby condoned. The counter is taken on record. Accordingly, IA/1186(CHE)/2021 is allowed. CP(IB)/203(CHE)/2021 This Application has been filed by one INDIAN OVERSEAS BANK, (hereinafter referred to as 'Financial Creditor') on 02.09.2021 under Section 7 of the Insolvency and Bankruptcy Code, 2016 (I B Code) r/w. Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, against ROSVAR STEELS PRIVATE LIMITED (hereinafter referred to as 'Corporate Debtor'). The prayer made is to admit the Application, to initiate the Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor, declare moratorium and appoint Interim Resolution Professional (IRP). 2. From Part-I of the Application, it is seen that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e declaration of the Fraud account, CBI registered an FIR and have been investigating the matter. So far the CBI has not been able to identify any diversion of funds or any act that could tantamount to the account being named fraud. Therefore, the Respondent had filed a writ petition bearing W.P. No. 17839 of 2021 and interim orders have been granted in the said Writ Petition. It was further submitted that from the time the Corporate Debtor's account was declared NPA and till the initiation of the fraud declaration there was no allegation with regards to any fraud. Further the bank has not conducted any audit to determine if there has been diversion of funds which caused the bank to suspect that there has been any diversion of funds. 8. Heard the Submissions of both the parties. This Tribunal after comprehensively hearing the said matter is of the view that, the debt and default had been proven beyond reasonable doubt. During the hearing, the learned Counsel for the Respondent submitted that the Corporate Debtor has been classified the account as a fraudulent transaction and unable to go for One Time Settlement (OTS) proposal. Under these circumstances, the Respondent file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating authority is to be satisfied that a default has occurred, that the corporate debtor is entitled to point out that a default has not occurred in the sense that the debt , which may also include a disputed claim, is not due. A debt may not be due if it is not payable in law or in fact. 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 7 days of receipt of a notice from the adjudicating authority. Under sub-section (7), the adjudicating authority shall then communicate the order passed to the financial creditor and corporate debtor within 7 days of admission or rejection of such application, as the case may be. 30. On the other hand, as we have seen, in the case of a corporate debtor who commits a default of a financial debt, the adjudicating authority has merely to see the records of the information utility or other evidence produced by the financial creditor to satisfy itself that a default has occurred. It is of no matter that the debt is disputed so long as the debt is due i.e. payable unless interdicte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4(3) as extracted hereunder; (2) The supply of essential goods or services to the Corporate Debtor as may be specified shall not be terminated or suspended or interrupted during moratorium period. (2A) Where the interim resolution professional or resolution professional, as the case may be, considers the supply of goods or services critical to protect and preserve the value of the Corporate Debtor and manage the operations of such Corporate Debtor as a going concern, then the supply of such goods or services shall not be terminated, suspended or interrupted during the period of moratorium, except where such Corporate Debtor has not paid dues arising from such supply during the moratorium period or in such circumstances as may be specified. (3) The provisions of sub-section (1) shall not apply to (a) such transactions, agreements or other arrangement as may be notified by the Central Government in consultation with any financial sector regulator or any other authority; (b) a surety in a contract of guarantee to a corporate debtor. 14. The duration of period of moratorium shall be as provided in Section 14(4) of the Code which is reproduced below for ready ..... X X X X Extracts X X X X X X X X Extracts X X X X
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