Page 44 - IBC Orders us 7-CA Mukesh Mohan

Order Passed by Sec 7
Hon’ble NCLT Principal Bench
05.05.2016. Similar is the position with regard to another cheque dated 06.05.2016 which bounced on

10.05.2016. The story is no different for the month of July, August and October, 2016 and so on.

5. At the hearing, we asked learned counsel for the petitioner that disclosure has been made in para

2 part-V of the petition that the arbitration proceeding were pending and in face of arbitration proceeding
how the Corporate Insolvency Resolution Process can be initiated. Learned counsel has stated that under
Section 7 of the Code there is no bar to initiate Corporate Insolvency Resolution Process even if

arbitration proceeding is pending. According to learned counsel such a bar exists in respect of claim made
by Operational Creditor under Section 9 of the Code. In support of his view learned counsel has placed

reliance on the observation made by the learned Appellate Tribunal in the case of Kirusa Software Private
Limited v. Mobi lox Innovations Private Limited, Company Appeal (AT) (Insolvency) No. 6 of 2017
decided on 24.05.2017 and has argued that Section 7 of the Code is free from any such bar of pendency

dispute in a civil suit or arbitration proceeding which operate in case of 'Operational Creditor'.

6. Having heard the learned counsel and perusing the paper book with his able assistance, we are of

the view that all necessary requirements contemplated by Section 7 of the Code stand complied with. The
'Financial Creditor' has disclosed the relevant data by placing on record the evidence of advance, the
delay in payment of EMIs and the last payment made on 31.03.2016. It is thereafter that the 'Corporate

Debtor' has committed default as is evident from the statement of accounts maintained by the petitioner in
respect of the respondent accounts. The default has also been established on account of dishonoured of
cheques. Therefore, we are satisfied with the petitioner answer the prescription of Section 7 of the Code

and the Rules framed thereunder. The pendency of arbitration proceeding is also not a hindrance under
Section 7 of the Code for initiating the Corporate Insolvency Resolution Process.

7. For the reasons, aforementioned this petition is admitted. Shri Rakesh Wadhwa has been
proposed as an Interim Resolution Professional. He has also filed his written communication in

connection with the application to initiate Corporate Insolvency Resolution Process. The disclosure has
been made in the letter dated 05.06.2017. Accordingly, in pursuance of Section 13 (2) of the Code we
direct that public announcement shall be immediately made by him with regard to admission of the

application under Section 7 of the Code. We also declare moratorium for the purposes of Section 14. A
necessary consequence of the moratorium flows from the provisions of Section 14 (1) (a), (b), (c) 86 (d).
Thus, the following prohibitions are imposed:

"(a) the institution of suits or continuation of pending suits or proceedings against the corporate debtor
including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or

other authority;

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