NCLT admits petition filed u/s 7 on existence of debt and its default in repayment by corporate debtor

Case details: Edelweiss Asset Reconstruction Co. Ltd. v. Meeti Developers (P.) Ltd. - [2021] 128 taxmann.com 137 (NCLT - Mum.)

Judiciary and Counsel Details

• • Smt. Suchitra Kanuparthi | Judicial Member and Chandra Bhan Singh | Technical Member
  • V.R. Dhond, Adv. for the Petitioner
  • Akshay Petkar, Adv. for the Respondent.

Facts of the Case

In the given case, the Petitioner viz. ‘Edelweiss Asset Reconstruction Company Limited’ (hereinafter as Financial Creditors) has furnished Form No. 1 under rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 in the capacity of “Financial Creditor” by invoking the provisions of section 7 of the Insolvency and Bankruptcy Code against ‘Meeti Developers Private Limited’ (hereinafter as ‘Corporate Debtor’).

n the requisite Form, under the head “Particulars of Financial Debt” the total amount of Debt granted is stated to be Rs. 55,00,00,000/-, and the amount claimed to be in default is Rs. 71,32,09,849/- including interest.

NCLT Held

During submission by both parties, the NCLT understood that the Corporate Debtor has defaulted in repayment of debt. And has acknowledged the disbursement of credit facilities and its liability to repay the same. However, the Corporate Debtor failed to pay. Hence, owing to the inability of the Corporate Debtor to pay its dues, this is a fit case to be moved u/s 7 of the I&B Code.

Moreover, the NCLT stated that the nature of Debt is a “Financial Debt” as defined under section 5(8) of the Code. It has also been established that there is a “Default” as defined under section 3(12) of the Code on the part of the Debtor. The two essential qualifications, i.e. existence of ‘debt’ and ‘default’, for admission of a petition under section 7 of the I&B Code, have been met in this case. Hence, this Petition deserves to be admitted.