Santoshi Finlease Private Limited. Vs State Bank of India (NCLAT Delhi)
NCLAT Delhi held that in absence of both disbursements directly to Corporate Debtor and default, attempt to invoke proceedings u/s. 7 of IBC unsustainable. Thus, since CIRP was fraudulent and malicious, dismissal u/s. 65 of IBC upheld.
Facts- The Appellant, M/s Santoshi Finlease Pvt Ltd, filed a Section 7 Application under the Insolvency and Bankruptcy Code (IBC), 2016, against the Corporate Debtor – M/s Mothers Pride Dairy India Pvt Ltd for non- payment of a loan amount of INR 4,89,28,694/- disbursed from 08.07.2019 to 15.11.2019. The total outstanding amount due from the Corporate Debtor is INR 9,32,52,937/- including both principal INR 4,89,28,694/- and interest INR 4,43,24,243/-.
The State Bank of India (SBI), as Respondent No. 1, filed application alleging that the Appellant’s application for Corporate Insolvency Resolution Process (CIRP) was fraudulent and malicious, seeking its dismissal u/s. 65 of IBC. Against the same Corporate Debtor, earlier also CIR proceedings had been admitted on 13.11.2019 by the NCLT Delhi, but was later set aside by the NCLAT on 05.08.2022. Per contra the Appellant contends that the dismissal of the section 7 Petition was improper, as facts were overlooked and there was absence of any fraud or malice in the Application. The NCLT’s dismissal was accompanied by a penalty of Rs 10,00,000/- to be paid to the Prime Minister’s Relief Fund. Therefore, the Appellant has appealed to the Appellate Tribunal, seeking the initiation of the CIRP and justice for the non-payment of dues.
