Indian Kanoon - Search engine for Indian Law

2. The Appellant company, which claims to be a financial creditor has assailed the Impugned Order by which the Adjudicating Authority has admitted Section 7 application filed by the Financial Creditor- Stressed Asset Stabilization Fund (in short 'SASF') against the 'Corporate Debtor'- IC Textiles Limited.

3. The Appellant's case is that he is a secured financial creditor of the corporate debtor, who is assignee of the debts of IFCI owed to the corporate debtor and is pari passu charge holder of the said debts. He has claimed that Respondent No. 1- SASF, which is a financial creditor, had entered into a 'One Time Settlement' (in short 'OTS') and the corporate debtor had paid a substantial amount to SASF in pursuance of the OTS and only an amount of Rs. 88.75 Lakhs remained due and payable by the corporate debtor to SASF under the OTS, and therefore, SASF wrongfully revoked the OTS and subsequently filed an application under Section 7 of the IBC, which was admitted by the Impugned Order.

5. We note that the Appellant- Suzlon Synthetics Limited has filed this appeal claiming to be a financial creditor who is adversely affected by the admission of Section 7 application. The Appellant was not a party before the Adjudicating Authority, but since it has claimed to be adversely affected by the Impugned Order, we decided to hear this appeal.

6. The Learned Counsel for the Appellant has argued that the financial creditor- SASF has stated an exorbitant debt amount of Rs. 39,30,000,000 (Thirty Nine Crores and Thirty Lakhs Only), in Part IV of the Section 7 application in Form-1, whereas in reality there was an OTS entered into between the corporate debtor and SASF, and in pursuance of this OTS a substantial amount was paid by the corporate debtor to the financial creditor-SASF and Company Appeal (AT) (Insolvency) No. 662-663 of 2022 only an amount of Rs. 88.75 Lakhs remained due and payable to the financial creditor-SASF.

7. The Learned Counsel for the Appellant has further submitted that the Impugned Order in paragraph 56 notes that the Applicant/SASF has claimed of sum of Rs. 10,82,94,94,335/- as due and payable by the corporate debtor and if such a large claim is considered for SASF, the amounts claimed by the other financial creditors including the Appellant would become very small in proportion and thus, the Appellant along with other financial creditors would suffer a huge financial loss in case the CIRP were to proceed against the corporate debtor. She has contended that, therefore, this is not a fit case for initiating CIRP of the corporate debtor, and for SASF should take action against the corporate debtor for recovery of the said amount of Rs. 88.75 lakhs.

8. The Learned Counsel for the Respondent No. 1- SASF has argued that the Appellant has no locus standi to file this appeal as the section 7 petition was filed by SASF and the CIRP has been initiated after admission of the said Section 7 application. He has further argued that in the CIRP against the corporate debtor, in due course claims of all creditors will be obtained which will be duly scrutinized by IRP after every creditor submits proof with regard to its claim when the Appellant will also get an opportunity Company Appeal (AT) (Insolvency) No. 662-663 of 2022 to file his claim before the IRP which will be duly scrutinized and finalized and thus no prejudice will be caused to the financial interest of the Appellant. He has also argued that the promoters/ erstwhile director/ guarantors of the corporate debtor have not filed any appeal against the Impugned Order when it is the corporate debtor against which the Impugned Order has been passed and the Appellant appears to be acting as a front for the promoters of the corporate debtor.