Ranvir Ranjit vs Vijay R Vakharia & Ors

[Arising out of order dated 12th October, 2018 passed by the Adjudicating Authority (National Company Law Tribunal), Single Bench, Chennai in CP/62/(IB)/CB/2017]

IN THE MATTER OF:

Ranvir Ranjit S/o Ranjit Pratap, R/o Villa Enchantress No.3(14) Ranjit Road, Kottur, Chennai - 600 085. ...Appellant

Vs

1. M/s Vijay R. Vakharia, No.1, Whites Road, Opp. Express Avenue, Royapettah, Chennai - 600 014.

2. Vijay R. Vakharia and Ajay R Vakharia, No.1, Whites Road, Opp. Express Avenue, Royapettah, Chennai - 600 014.

3. Vijay Kumar HUF, No.1, Whites Road, Opp. Express Avenue, Royapettah, Chennai - 600 014.

4. Vijay R. Vakharia, Legal heir of Lt. Ramanlal N. Vakharia, No.1, Whites Road, Opp. Express Avenue, Royapettah, Chennai - 600 014. -2-

5. Sumit V. Vakharia, No.1, Whites Road, Opp. Express Avenue, Royapettah, Chennai - 600 014.

6. Aasman Financial Services Pvt. Ltd., D-5, Shanti Appartments, 21, 1st Cross Street, TTK Road, Chennai - 600 018.

7. Zeal Warehousing Pvt. Ltd., No.1, Whites Road, Opp. Express Avenue, Royapettah, Chennai - 600 014.

8. Rayala Corporation Pvt. Ltd., Regd. Office at 144/7, B Rajiv Gandhi Salai, Old Mahabalipuram Road, Kottivakkam, Chennai - 600 006.

9. LIC Housing Finance Limited, No.22/29, 1st Floor, VRB Complex, Venkatrathan Nagar, Chennai - 600 020.

....Respondents

Present:

For Appellant: Mr. Abhishek Gupta, Mr. George Cherian, Ms. Rohini Musa and Mr. Ujas Kumar, Advocates.

For Respondents: Mr. Aksaay Sharma and Mr. TanvirNayar, Advocates for Respondent No. 1 to Respondent No.7.

Mr. Pawan Kishore Singh and S. Madhusmita Bora, Advocates for Respondent No. 9.

Company Appeal (AT) (Insolvency) No. 646 of 2018 -3-

BANSI LAL BHAT, J.

Appellant, a Shareholder of the Corporate Debtor-'Rayala Corporation

Pvt. Ltd.', is aggrieved of order dated 12th October, 2018 (hereinafter referred

to as 'impugned order') passed by the Adjudicating Authority (National

Company Law Tribunal), Single Bench, Chennai in CP/62/(IB)/CB/2017

filed by the Respondent Nos. 1 to 7 (hereinafter referred to as 'Financial

Creditors') under Section 7 of the Insolvency and Bankruptcy Code, 2016

(hereinafter referred to as 'I&B Code') by virtue whereof the aforesaid

application of Financial Creditors came to be admitted with consequential

directions in the nature of slapping of moratorium on Corporate Debtor,

appointment of Interim Resolution Professional and further measures

pursuant thereto. The impugned order has been assailed on certain

grounds which shall be adverted to as the narrative proceeds.

2. The flashback of events may be noticed briefly. Financial Creditors

comprising of Shri Vijay R. Vakharia and six others sought initiation of

Corporate Insolvency Resolution Process against the Corporate Debtor by

approaching the Adjudicating Authority with a joint application in the

prescribed format alleging default on the part of Corporate Debtor in

discharging the obligation in respect of the Financial Debt to the tune of

Rs.4,46,08,990.28/- as on 31st October, 2017 which arose out of financial

Company Appeal (AT) (Insolvency) No. 646 of 2018 -4-

assistance provided by the Financial Creditors to Corporate Debtor by way

of multiple transactions in course of business against consideration of time

value of money since the year 2005 wherein the Corporate Debtor had been

paying interest on the borrowings as accrued. According to Financial

Creditors, the Corporate Debtor defaulted in repayment of outstanding

amounts after the year 2013 though in the year 2016 a minimal part of the

outstanding dues was paid. The Financial Creditors alleged that the

Corporate Debtor willfully refused to clear the outstanding debt despite

admitting its liability qua the financial debt. The Financial Creditors, apart

from other relevant documents placed before the Adjudicating Authority,

relied upon Renewed Promissory Notes dated 15th May, 2015 in terms

whereof the Corporate Debtor admitted its liability in relation to each of the

Financial Creditors. The Financial Creditors also relied upon various

cheques issued by the Corporate Debtor to discharge the financial debt after

arranging payments. Reference has also been made to various emails

assuring payment of pending dues. In its reply before the Adjudicating

Authority, the Corporate Debtor denied the claim of Financial Creditors

advancing multiple pleas. On consideration of the record, the Adjudicating

Authority observed that the Corporate Debtor had failed to produce any

document pertaining to One Time Settlement (OTS) as claimed by it. In

regard to plea of outstanding debt having being paid, the Adjudicating

Authority observed that the Corporate Debtor failed to explain as to why it

had not obtained No Dues Certificate (NDC) from the Financial Creditors.

Upon noticing that the assertion of Corporate Debtor in regard to repayment

Company Appeal (AT) (Insolvency) No. 646 of 2018 -5-

of outstanding dues was not supported by any documentary evidence, the

plea of Corporate Debtor was dismissed. The Adjudicating Authority

repelled the Corporate Debtor's contentions in regard to plea of limitation,

joining of the Financial Creditors for initiation of Corporate Insolvency

Resolution Process by filing a joint application, maintainability of the

application and the borrowing of loan by Corporate Debtor being violative of

its Articles of Association and initiated the Corporate Insolvency Resolution

Process against the Corporate Debtor in terms of the impugned order as

noticed hereinabove.

3. The impugned order has been assailed on the ground that the

Financial Creditors have miserably failed to establish the existence of a

financial debt; that the liability with regard to principal amount and interest

in terms of the promissory notes dated 15th May, 2015 has been discharged;

that the claim of Financial Creditors is hopelessly time barred and that in

terms of demand notice dated 3rd November, 2017 the Financial Creditors

claimed to be Operational Creditors and as such are estopped from making

a claim against the Corporate Debtor as Financial Creditors.

4. It is submitted on behalf of the Appellant that in support of their

application under Section 7 in the prescribed format the Respondents have

not furnished any record maintained by the information utility service or

from other sources to prove the particulars of financial debt and existence of

default. It is further submitted that the demand promissory note being in

the nature of a negotiable instrument together with the offer and acceptance

Company Appeal (AT) (Insolvency) No. 646 of 2018 -6-

letter for taking the space on lease does not give rise to a financial debt and

in view of the same Respondent No. 1 cannot be said to be a Financial

Creditor. It is further contended that the claim of Respondent No. 1 is on

three counts. While no payment is due in regard to part of first count and

third count, payment as regards second count is barred by limitation. As

regards Respondents No. 3, 4, 5, 6 and 7 discharge of debt is pleaded while

in regard to Respondent No. 2, plea of limitation has been setup.

5. Per contra it is submitted on behalf of Respondents that the balance

sheet provided by the Insolvency Resolution Professional clearly shows that

Rs.1.70 Crore is still outstanding towards Ramanlal Vakharia and

Rs.25 Lakhs debt is still outstanding towards Rayala Phase II Loan given by

Vijay Vakharia. It is further submitted that the Respondents - 'Financial

Creditors' were entitled to substantiate the default either by submitting the

record of default recorded with the information utility or other such record

as evidence of default. The balance sheet of the Corporate Debtor till date

shows that money is owed to Respondent No. 1 and 2. It is submitted that

Respondents No. 1 to 7 had filed a joint application before the Adjudicating

Authority on the basis of various financial contracts. Respondents other

than Respondent No. 2 were similarly situated as their cases were based on

Promissory Notes while Loan II transaction of the Respondent No. 1 and

transaction of Respondent No. 2 with the Corporate Debtor were based on

financial contracts other than Promissory Notes, details whereof were

furnished in the affidavit supporting the application further supported by

Company Appeal (AT) (Insolvency) No. 646 of 2018 -7-

the relevant documents. It is submitted that the Corporate Debtor was in

default of the outstanding amounts and had paid a minimal part of the

outstanding dues in March, 2016 whereafter it refused to clear the

remaining dues of Respondents - Financial Creditors despite admitting its

liability towards the financial debt. It is further submitted that the plea of

limitation set up by the Appellant is bogus as there has been a continued

cause of action due to persistent defaults committed by the Corporate

Debtor, which made part payment in March, 2016 and extended assurances

till October, 2017. It is further pointed out that as late as in December,

2015, Corporate Debtor delivered cheques worth Rs.9.14 Crores to the

Respondents - Financial Creditors towards partial discharge but

subsequently sought extension of time for encashment of cheques. It is

further pointed out that even on 18th March, 2016 and 29th March, 2016 the

Corporate Debtor issued cheques worth Rs.4.84 Crores favouring the

Financial Creditors towards partial discharge of its liability but the

Corporate Debtor again requested for extension of time in encashment of the

same. Reference is also made to email dated 17th April, 2017 from the

Corporate Debtor admitting its liability to pay the dues to the Financial

Creditors and seeking time to discharge its liability. It is submitted that the

claim in the application is a legally enforceable claim both in fact and in law

and such claim being based on Promissory Notes and Lease and Purchase

Agreements clearly falls within the purview of 'financial debt' which have the

commercial effect of a borrowing and are for time value of money. As

regards, the plea of One Time Settlement between the Corporate Debtor and

Company Appeal (AT) (Insolvency) No. 646 of 2018 -8-

Respondents - Financial Creditors it is submitted that no such settlement

was mutually agreed between the parties and the plea was a pure

concoction. Lastly it is submitted that the Resolution Professional at the

third meeting of the Committee of Creditors has approved a claim amount of

Rs.14,15,08,515/- viz-a-viz a claim of Rs.30,23,64,198/- made by the

Financial Creditors and the plea of discharge of debt by the Corporate

Debtor on 18th March, 2016 and 29th March, 2016 was a hoax as the

Corporate Debtor failed to produce 'No Dues Certificate' as evidence of

discharge of its liability.

6. We have given a patient hearing to the learned counsel for the parties

and also waded through the record.

7. At the very outset, we may observe that the contention raised qua the

nature of transactions inter-se the parties bringing the same within the fold

of 'Financial Debt' has been duly considered by the Adjudicating Authority

with reference to Clause 6 of the Memorandum of Agreement dated 1st

November, 2010 and 1st December, 2010, on consideration whereof the

Adjudicating Authority was of the view that the amount disbursed by the

Creditors to the Corporate Debtor was against the consideration for time

value of money which had the commercial effect of borrowing. This view of

Adjudicating Authority is in consonance with the position of law emerging

from provisions of I&B Code and the factual position obtaining under the

terms of agreements referred to hereinabove. Section 5(7) of I&B Code

defines the legal expression 'financial creditor' as a person to whom a

Company Appeal (AT) (Insolvency) No. 646 of 2018 -9-

financial debt is owed which also includes an assignee or a transferee.

Section 5(8) of I&B Code defines the term 'financial debt' as a debt along

with interest, if any, which is disbursed against the consideration for the

time value of money and includes the money borrowed against the payment

of interest, amounts raised under credit facility, purchase facility, issue of

bonds, notes, debentures, loan stock or similar instrument, amount of

liability in respect of any lease or hire purchase contract, receivables other

than on non-recourse basis, amount raised under any other transaction

including forward sale or purchase agreement having commercial effect of a

borrowing, derivative transactions in connection with protection against

fluctuation in price, counter indemnity obligations in respect of guarantee,

indemnity, bond, letter of credit or any instrument issued by a bank or

financial institution and the amount of any liability in respect of any

guarantee or indemnity with reference to the aforesaid transactions. This

Appellate Tribunal, while dealing with the interpretation of 'financial debt' in

'Shailesh Sangani Vs. Joel Cardoso, Company Appeal (AT) (Insolvency)

No. 616 of 2018 decided on 30th January, 2019' observed as under:-

6. A plain look at the definition of 'financial debt' brings it

to fore that the debt alongwith interest, if any, should have

been disbursed against the consideration for the time

value of money. Use of expression 'if any' as suffix to

'interest' leaves no room for doubt that the component of

interest is not a sine qua non for bringing the debt within

Company Appeal (AT) (Insolvency) No. 646 of 2018 -10-

the fold of 'financial debt'. The amount disbursed as debt

against the consideration for time value of money may or

may not be interest bearing. What is material is that the

disbursement of debt should be against consideration for

the time value of money. Clauses (a) to (i) of Section 5(8)

embody the nature of transactions which are included in

the definition of 'financial debt'. It includes money

borrowed against the payment of interest. Clause (f) of

Section 5(8) specifically deals with amount raised under

any other transaction having the commercial effect of a

borrowing which also includes a forward sale or purchase

agreement. It is manifestly clear that money advanced by

a Promoter, Director or a Shareholder of the Corporate

Debtor as a stakeholder to improve financial health of the

Company and boost its economic prospects, would have

the commercial effect of borrowing on the part of Corporate

Debtor notwithstanding the fact that no provision is made

for interest thereon. Due to fluctuations in market and the

risks to which it is exposed, a Company may at times feel

the heat of resource crunch and the stakeholders like

Promoter, Director or a Shareholder may, in order to protect

their legitimate interests be called upon to respond to the

crisis and in order to save the company they may infuse

funds without claiming interest. In such situation such

Company Appeal (AT) (Insolvency) No. 646 of 2018 -11-

funds may be treated as long term borrowings. Once it is

so, it cannot be said that the debt has not been disbursed

against the consideration for the time value of the money.

The interests of such stakeholders cannot be said to be in

conflict with the interests of the Company. Enhancement

of assets, increase in production and the growth in profits,

share value or equity enures to the benefit of such

stakeholders and that is the time value of the money

constituting the consideration for disbursement of such

amount raised as debt with obligation on the part of

Company to discharge the same. Viewed thus, it can be

said without any amount of contradiction that in such

cases the amount taken by the Company is in the nature

of a 'financial debt'.

8. Dwelling on the scope of provisions of Section 7 of I&B Code dealing

with triggering of Corporate Insolvency Resolution Process at the instance of

'Financial Creditors' and converging on the procedure regulating initiation of

such process, the Hon'ble Apex Court held in 'Swiss Ribbons Pvt. Ltd. &

Anr. Vs. Union of India & Ors.', Writ Petition (Civil) No. 99/2018 (2019

SCC OnLine SC 73) as follows:-

"36. A perusal of the definition of "financial creditor" and

"financial debt" makes it clear that a financial debt is a

debt together with interest, if any, which is disbursed

Company Appeal (AT) (Insolvency) No. 646 of 2018 -12-

against the consideration for time value of money. It may

further be money that is borrowed or raised in any of the

manners prescribed in Section 5(8) or otherwise, as Section

5(8) is an inclusive definition. On the other hand, an

"operational debt" would include a claim in respect of the

provision of goods or services, including employment, or a

debt in respect of payment of dues arising under any law

and payable to the Government or any local authority.

37. A financial creditor may trigger the Code either by

itself or jointly with other financial creditors or such

persons as may be notified by the Central Government

when a "default" occurs. The Explanation to Section 7(1)

also makes it clear that the Code may be triggered by such

persons in respect of a default made to any other financial

creditor of the corporate debtor, making it clear that once

triggered, the resolution process under the Code is a

collective proceeding in rem which seeks, in the first

instance, to rehabilitate the corporate debtor. Under

Section 7(4), the Adjudicating Authority shall, within the

prescribed period, ascertain the existence of a default on

the basis of evidence furnished by the financial creditor;

and under Section 7(5), the Adjudicating Authority has to

be satisfied that a default has occurred, when it may, by

Company Appeal (AT) (Insolvency) No. 646 of 2018 -13-

order, admit the application, or dismiss the application if

such default has not occurred. On the other hand, under

Sections 8 and 9, an operational creditor may, on the

occurrence of a default, deliver a demand notice which

must then be replied to within the specified period. What is

important is that at this stage, if an application is filed

before the Adjudicating Authority for initiating the

corporate insolvency resolution process, the corporate

debtor can prove that the debt is disputed. When the debt

is so disputed, such application would be rejected."

9. Wading through the factual matrix, it emerges that the Respondents

Creditors numbering seven jointly filed application under Section 7 of I&B

Code against the common Corporate Debtor - 'M/s Rayala Corporation Pvt.

Ltd.' seeking initiation of Corporate Insolvency Resolution Process based on

allegations that the Corporate Debtor had committed default in repayment

of debt to Respondents Creditors quantified at Rs.4,46,08,990.28/-.

According to Respondents, they were in the business of providing financial

assistance against consideration of time value of money and had provided

financial assistance to the Corporate Debtor in multiple transactions during

the course of business, and that the Corporate Debtor had been paying

interest accrued thereon. The financial assistance was stated to have been

provided on the basis of contractual documents from year 2005 onwards.

According to Respondents, the Corporate Debtor declined to clear the

Company Appeal (AT) (Insolvency) No. 646 of 2018 -14-

outstanding dues after year 2013 on various excuses though in year 2016

the Corporate Debtor paid a small portion of the outstanding dues.

According to Respondents default on the part of Corporate Debtor occurred

despite admission and acknowledgement of its liability to clear the debt.

Respondents, in this regard, relied upon a mail emanating from the

Corporate Debtor sent on 8th January, 2013 acknowledging the dues and

seeking to clear the liability depending upon the availability of loan from

Kotak Mahindra Bank. Reference is also made to issuance of cheques dated

5th February, 2013, 20th August, 2014, 17th November, 2014, 14th February,

2015, 21st December, 2015 and 18th March, 2016 to 20th March, 2016 in

favour of Respondents towards liquidation of the outstanding liability which,

however, could be presented for clearance only after seeking approval of

Corporate Debtor. Further reference is made to various emails dated 8th

January, 2013, 25th June, 2013, 5th February, 2014, 10th February, 2014,

6th November, 2014, 24th November, 2014, 29th January, 2015, 11th August,

2015, 30th December, 2015, 11th January, 2016, 4th February, 2016, 15th

March, 2016, 24th March, 2016, 26thApril, 2016 and 17th April, 2017 sent by

the Corporate Debtor to Respondents assuring payment of pending dues

and further assuring that in the event of Respondents raising money on

higher rate of interest, the Corporate Debtor would pay such higher interest

rate to Respondents.

10. The Memorandum of Agreement initially executed between 'M/s Vira

Properties (Madras) Pvt. Ltd.' and 'M/s Rayala Corporation Pvt. Ltd.' with

Company Appeal (AT) (Insolvency) No. 646 of 2018 -15-

Respondents 1 and 2 on 1st November, 2010 relevant for purposes of

ascertaining the nature of transaction is extracted herein below:-

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Company Appeal (AT) (Insolvency) No. 646 of 2018 -17-

Company Appeal (AT) (Insolvency) No. 646 of 2018 -18-

Company Appeal (AT) (Insolvency) No. 646 of 2018 -19-

Company Appeal (AT) (Insolvency) No. 646 of 2018 -20-

Company Appeal (AT) (Insolvency) No. 646 of 2018 -21-

On a bare perusal of the aforesaid agreement, it emerges that the

executants of the first part including the Corporate Debtor sought credit

facility from Respondents 1 and 2 in a sum of Rs.2.5 Crores to enable them

to utilize the same as 'margin money' for raising Rs.47.50 Crores to work out

the settlement arrived between the executants of the first part and MBDL.

In terms of the Agreement, the amount was to be disbursed by Respondents

1 and 2 free of interest and in lieu of interest the executants of the first part

including the Corporate Debtor agreed to transfer the constructed area of

2500 sq. ft. to Respondents no. 1 and 2. The Corporate Debtor agreed to

repay the Principal Amount of Rs.2.5 Crores upon sale of the portions of

property to third party purchasers and latest by 30th April, 2018. However,

interest @ 24% p.a. was agreed to be levied in the event of failure of

Corporate Debtor to deliver the property as aforesaid to Respondents 1 and

2. The Agreement dated 1st December, 2010 executed inter-se the same

parties contains similar terms. A cursory look at the aforesaid terms and

stipulations in the Agreements clearly reveals that the amount aforesaid was

in the nature of a long term borrowing and had been disbursed by

Respondents 1 and 2 against consideration for the time value of money.

Even component of interest was taken care of by providing transfer of

property in lieu thereof and upon failure of such transfer of property

materializing Respondent 1 and 2 were entitled to interest @ 24% p.a. In

view of this, there is no difficulty in holding that the credit facility extended

to the Corporate Debtor by Respondents 1 and 2 fell within the purview of

'financial debt'. That being so, Respondents 1 and 2 were justifiably held to

Company Appeal (AT) (Insolvency) No. 646 of 2018 -22-

be 'financial creditors' within the meaning of Section 5(7) of the I&B Code.

Contention raised by the Appellant on this score is accordingly repelled.

11. Annexure to Form-1 application filed by the Respondents - 'Financial

Creditors' forming page 365 of the paper book incorporates the particulars

of financial debt. As regards Respondent No. 1, it reveals total outstanding

amount of Rs.4,46,08,990.28/-. Mortgage Deed dated 2nd March, 2009,

letters of Corporate Debtor dated 17th September, 2012 and 1st June, 2015,

Promissory Note dated 15th May, 2015 given by Corporate Debtor to the

Financial Creditor and Board Resolution of Corporate Debtor dated 21st

January, 2009 are relied upon by the Respondent No. 1 to support its claim.

The Financial Creditors have also relied upon the mail dated 26th April,

2016, mail dated 18th October, 2012 and mail dated 5th February, 2014

emanating from the Corporate Debtor in this regard. The Annexure reveals

multiple transactions as evidenced by Promissory Notes executed by the

Corporate Debtor on various dates from 10th July, 2011 to 12th August,

2011 for amount of Rs.65,00,000/- and the Renewed Promissory Notes for

amount of Rs.55,00,000/-. It is admitted that the Corporate Debtor has

been making part payments of loan, the last being made on 26th February,

2016. Total outstanding on this transaction as on 31st October, 2017 is

stated to be Rs.65,47,134/-. The claim is evidenced by execution of various

documents by the Corporate Debtor including the Promissory Notes and

Renewed Promissory Notes. The Financial Creditors have also relied upon

the request for rollover of the outstanding liability emanating from the

Company Appeal (AT) (Insolvency) No. 646 of 2018 -23-

Corporate Debtor in terms of its letters dated 17th September, 2012 and 1st

June, 2015 forming page 383 and 384 of the paper book, respectively. It is

manifestly clear that the claim of Financial Creditors is based on Promissory

Notes including the Promissory Note dated 15th May, 2015 besides Lease

and Purchase Agreements bringing the claim within the purview of 'financial

debt' payable in law on account of enforceability of these instruments. Part

payment of the financial debt made by the Appellant in March, 2016 and

issuance of cheques dated 18th March, 2016 and 29th March, 2016 on its

part speaks volumes about such financial debt being payable in law and

default committed in discharging the liability. Superadded to it is the

clinching evidence in the form of email dated 17th April, 2017 emanating

from the Appellant in terms whereof the Appellant not only acknowledged

the debt but also requested for taking a cut in the interest anticipated while

seeking further accommodation in repaying the amount. This not only

demonstrates a continuing cause of action but also knocks the bottom of the

plea of limitation set up by the Appellant. The evidence placed before the

Adjudicating Authority justifiably supports the conclusion that the

Corporate Debtor was in default for an outstanding liability of more than

Rupees One Lakh qua Financial Creditor - Respondent No. 1, which was

payable. Satisfaction recorded by the Adjudicating Authority in this regard

cannot be termed erroneous much less perverse.

12. That apart, the Appellant could not substantiate its plea of discharge

of debt as regards some of the 'financial creditors' by producing any

Company Appeal (AT) (Insolvency) No. 646 of 2018 -24-

documentary proof. In absence of production of a 'No Dues Certificate'

obtained from the concerned 'financial creditors' the plea of discharge

advanced by the Corporate Debtor would be nothing more than a bald

assertion. Viewed thus, the Corporate Debtor cannot be said to have

discharged the onus of proof of discharge of debt as pleaded, more so as the

transactions were heavy.

13. In the wake of aforesaid finding, it becomes unnecessary for us to

examine the nature and extent of debt and default qua other Respondents.

It is well settled by now that once the Financial Creditor is able to satisfy the

Adjudicating Authority that there is a debt payable in law and a default on

the part of Corporate Debtor, whether from record of default recorded with

the information utility or other evidence, the Adjudicating Authority is left

with no option but to admit application under Section 7 of I&B Code for

initiation of Corporate Insolvency Resolution Process unless the application

is incomplete, in which case, the Adjudicating Authority has to provide

opportunity to the Financial Creditor to rectify the defect. Thus viewed, we

find no infirmity in the impugned order by virtue whereof Corporate

Insolvency Resolution process has been triggered at the instance of

Respondents. The feeble attempt made to question the maintainability of

joint application of Respondents numbering seven joining as Financial

Creditors deserves outright rejection in view of the express mandate of law

incorporated in Section 7(1) of I&B Code, which lays down in unambiguous

terms that a 'Financial Creditor' may file application for initiating Corporate

Company Appeal (AT) (Insolvency) No. 646 of 2018 -25-

Insolvency Resolution Process against a Corporate Debtor either by itself or

jointly with other 'Financial Creditors'. All contentions raised by the

Appellant are accordingly repelled.

14. For the foregoing reasons, we are of the considered opinion that the

impugned order does not suffer from any legal infirmity or factual frailty.

The appeal being devoid of merit is accordingly dismissed. There shall be no

orders as to costs.

[Justice S. J. Mukhopadhaya] [Justice Bansi Lal Bhat] Chairperson Member (Judicial)

NEW DELHI

15th March, 2019

AM

Company Appeal (AT) (Insolvency) No. 646 of 2018