Page 813 - IBC Orders us 7-CA Mukesh Mohan

Order Passed Under Sec 7
By Hon’ble NCLT New Delhi-II Bench

adjudicating authority to only ascertain and record satisfaction in a summary adjudication as to the

occurrence of default before admitting the application. Besides in an application under section 7 of the
Code, it is no matter that the debt is disputed so long as the debt is due and payable. The pendency of
SARFAESI proceedings and proceedings before DRT will not preclude the applicant bank to trigger
corporate insolvency resolution process under Section 7 of the Code. The initiation of proceedings under

the SARFAESI and the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, is no bar
for initiation of insolvency proceedings under the Code, in view of the overriding effect given in the

provisions of Section 238 of the Code. In the facts once the default is more than one lac, the objection of
the Respondent that the amount due has not been adjudicated upon cannot stand.

17. The Respondent has further alleged that the amount of claim made before DRT and in the present
application differs. The variance in the amount of default appears to be on account of difference of dates.
Needless to say that there has also been restructuring of the loan facilities. In any case the corporate

debtor would be entitled to raise objections of any mismatching of amount before the IRP/Committee of
Creditors. What is material is that the default is at least one lac, which is clearly satisfied in this case.

18. It has been objected by the corporate debtor that certification of the proposed Interim Resolution
Professional (IRP) is not in conformity with the requirement of the Code and the application filed by the

applicant bank is incomplete in this aspect. From the perusal of records, it is seen that the Applicant Bank
and the proposed IRP were directed to take necessary steps to remove the defect and file proper
certification vide order dated 08.09.2017. In compliance of the order dated 08.09.2017, an amended

Form-2 has been duly filed by the Applicant Bank on 14.09.2017, which is on record. Hence, it is seen
that the defect pointed out by the corporate debtor has since been cured.

19. Under sub-section 5(a) of Section 7 of the Code, the application filed by Financial Creditor under
Section 7 is admitted on satisfaction that:

I. Default has occurred,

II. Application is complete, and

III. No disciplinary proceeding against the proposed 1RP is pending.

20. In the case in hand the respondent company has committed a default in repayment of the outstanding
amount. Moreover, the application of the financial creditor is complete and there is no disciplinary
proceeding pending against the proposed 1RP. We are satisfied that the present application is complete

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