Kerala Ayurveda Ltd vs Tata Global Beverages Ltd
- CitationCompany Appeal (AT) (Insolvency) No. 429 of 2020
Ratio decidendi
The rule this decision rests on
The Adjudicating Authority's finding, made on an interlocutory application, that the amount advanced is a "financial debt" does not by itself justify admission or rejection of an application under Section 7 of the Insolvency and Bankruptcy Code, 2016; the Adjudicating Authority must consider the debt together with the default, and the Corporate Insolvency Resolution Process does not commence unless there is a finding of default and an order of admission is passed. An appeal under Section 60(1) of the Code does not lie against an order that decides only the character of the claimed debt on an interlocutory application without any admission or rejection of the Section 7 application; such an appeal is premature and is dismissed on that ground, with liberty reserved to the Appellant to raise all issues in an appeal against any subsequent order of admission under Section 7.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Kerala Ayurveda Ltd. ...Appellant
Vs.
Tata Global Beverages Ltd. ...Respondent
Present: For Appellant: - Mr. Jayant Mehta, Mr. Sanyat Lodha, Ms. Aakashi Lodha, Ms. Sanjana Saddy and Mr. Parv Garg, Advocates.
For Respondent: - Mr. Joseph Kpelianthara, Senior Advocate with Mr. M.P. Vinod and Mr. Atul Shankar Vinod, Advocates.
O R D E R
16.03.2020─ In terms of the impugned order, learned Adjudicating Authority has only disposed of I.A. No. 09/KOB/20 recording a finding that the money advanced constituted a 'financial debt', which is disputed by the Appellant.
It emerges from the record that the application under Section 7 of the Insolvency and Bankruptcy Code, 2016 ("I&B Code" for short) has not been dealt with at the stage of admission and no order has been passed either admitting or rejecting the application.
Mere finding on an Interlocutory Application that the debt claimed by the Creditor constituted a 'financial debt' would not ipso facto justify admission or rejection of the application as learned Adjudicating Authority is required to consider the debt along with default and unless
Contd/-...........
-2- there is a finding in respect of default and an order of admission is passed, 'Corporate Insolvency Resolution Process' does not commence. Viewed in this perspective, it is futile to contend that the appeal in terms of Section 60(1) shall be maintainable.
The appeal is accordingly, dismissed as being premature leaving it open to the learned Adjudicating Authority to decide the application on merit and in the event of the Appellant being aggrieved of order of admission passed under Section 7, it shall be open to the Appellant to raise all issues in appeal.
[Justice Bansi Lal Bhat] Acting Chairperson
[Justice Anant Bijay Singh] Member(Judicial)
[Shreesha Merla] Member(Technical)
Ar/G Company Appeal (AT) (Insolvency) No. 429 of 2020
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