Dhani Loans And Service Limited vs. Champa Impex Pvt. Ltd. - (NATIONAL COMPANY LAW APPELLATE TRIBUNAL) (24 May 2023)

When a finding is recorded by the Adjudicating Authority that agreement was entered, there is no question of doubting its genuineness

MANU/NL/0496/2023

Insolvency

Present appeal has been filed against the order passed by Adjudicating Authority (NCLT Kolkata) by which order Section 7 of the Insolvency & Bankruptcy Code, 2016 (IBC) Application filed by the Appellant has been rejected. Appellant filed Section 7 Application claiming to be Financial Creditor and the case of the Appellant is that, Appellant entered into a loan agreement dated 5th February, 2018 for a loan of Rs. 30 lakhs. The loan was repayable by 24 equal instalments. Most important documents were exchanged between the parties and EMIs of Rs. 1,55,226 was fixed with monthly instalment having interest. Loan was disbursed on 6th February, 2018. Corporate Debtor also paid certain interest and EMIs. On default, Section 7 Application was filed.

Adjudicating Authority while rejecting Section 7 Application has given certain contradictory reasoning as can be noted in paragraphs 33 and 34 of impugned order. The claim of the Corporate Debtor that signature on the loan agreement are forged has been repelled holding that document of the agreement dated 5th February, 2018 were executed. When the finding is recorded in paragraph-34, the document was executed again in paragraph -38, it has been observed that reliability of the document jural relationship between the parties itself is in question and onus to prove the bonafides of the same lies with the party claiming it to be genuine. Thus, paragraphs 33,34 and 38 are clearly contradictory to each other. When a finding is recorded by the Adjudicating Authority that agreement was entered, there was no question of doubting its genuineness.

Further in paragraph 37, the Adjudicating Authority has observed that possibility of collusion between the parties cannot be ruled out. The Application cannot be rejected on mere conjectures and surmises. There has to be categorical finding and clear reasoning for rejecting the Application. In the facts and circumstances of the case, ends of justice will be served in setting aside the impugned order rejecting Section 7 Application and reviving Section 7 Application before the Adjudicating Authority to be heard afresh in accordance with law. Impugned order is set aside and appeal is disposed of accordingly.

Tags : DEFAULT APPLICATION REJECTION