The National Company Law Appellate Tribunal, Principal Bench, ...

Admissibility of second petition u/s 7 of Insolvency and Bankruptcy Code - default on loan instalments - CD's deceptive actions - Appeal dismissed.

Case Laws     Insolvency and Bankruptcy

May 22, 2024

The National Company Law Appellate Tribunal, Principal Bench, New Delhi, addressed the admissibility of a second petition u/s 7 of the Insolvency and Bankruptcy Code, 2016, concerning unpaid instalments and the existence of debt and default. The Corporate Debtor availed a loan from the Financial Creditor but failed to make payments, leading to the first petition being admitted. A settlement was reached, but the Corporate Debtor failed to honor it, resulting in the Financial Creditor filing a second petition for the remaining debt. The Adjudicating Authority rightly admitted the second petition, emphasizing that allowing such tactics by the Corporate Debtor would be detrimental. The Tribunal held that the amount paid during the appeal should be adjusted only if supported by a written agreement; otherwise, the Financial Creditor could adjust it towards interest. The appeal was dismissed, and the deposited amount was ordered to be returned to the Appellant.

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