Chandrakant Hiralal Shah vs Beacon Trusteeship Limited & Anr
- CitationCompany Appeal (AT) (Insolvency) No. 590 of 2022
Ratio decidendi
The rule this decision rests on
The Adjudicating Authority's finding that the financial debt exceeds the threshold and that a default has occurred, on the documents placed before it, is not shown to be erroneous; an appeal against an order admitting a Section 7 application that discloses no such error is dismissed. Any settlement reached after admission may be pursued by the corporate debtor through the withdrawal mechanism of Section 12A, rather than being a ground to set aside the admission.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Chandrakant Hiralal Shah Director (Suspended) ...Appellant
Versus
Beacon Trusteeship Ltd. & Anr. ...Respondents
Present: For Appellant: Mr. Krishnendu Datta, Sr. Advocate with Mr. Kunal Vajani, Mr. Kunal Mimani and Mr. Kartikey Bhatt, Advocates. For Respondents: Mr. Neeraj Malhotra, Sr. Advocate with Mr. Nimish Kumar and Ms. Prerna Sharma, Advocates.
ORDER
12.08.2022: Heard learned counsel for the Appellant as well as learned
counsel appearing for the Respondent. This Appeal has been filed against
order dated 04.05.2022 by which order the Adjudicating Authority (National
Company Law Tribunal), Mumbai Bench-IV has admitted Section 7
application filed by the Respondent No.1. The Adjudicating Authority has
recorded finding that there is default by the Corporate Debtor in payment of
debt amount. The application was filed for a claim of Rs.502,91,64,495/-
and the date of default is 30.04.2019. The Adjudicating Authority after
hearing the parties has recorded finding in Para 16 of the impugned order,
which is to the following effect:-
"16. On perusal of the documents submitted by the Applicant, it is clear that financial debt amounting to
Cont'd.../ 2
more than Rs.1,00,00,000/- (Rupees One Crore Only) is due and payable by the Corporate Debtor to the Applicant. There is default by the Corporate Debtor in payment of debt amount. Therefore, we do not have any objection on record against the application filed for initiation of CIRP against the Corporate Debtor.
a) The application is complete and has been filed under the proper form. The debt amount is more than Rupees One Crore and default of the Corporate Debtor has been established and the application deserves to be admitted."
2. We do not find any error in the impugned order passed by the
Adjudicating Authority admitting Section 7 application. Learned counsel for
the Appellant submits that after passing of the order the Appellant
approached the Financial Creditor for settlement. We are of the view that if
any settlement is entered, it is open for the Appellant to take recourse of
Section 12A. Learned counsel for the Respondent has denied that any
settlement talks are going on. With these observations, we dismiss this
Appeal.
[Justice Ashok Bhushan] Chairperson
[Justice Rakesh Kumar] Member (Judicial)
[Ashok Kumar Mishra] Member (Technical) Archana/nn
Company Appeal (AT) (Insolvency) No. 590 of 2022
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