Getz Cables Private Limited Vs State Bank of India (NCLAT Delhi)
NCLAT Delhi held that initiation of proceedings u/s. 13 sub-section (2) and (4) of SARFAESI Act by the creditor prior to filing of Section 10 application, cannot be a ground to hold that Section 10 application is filed with malicious and fraudulent intent. Accordingly, rejection of application u/s. 65 of IBC not justified.
Facts- This Appeal has been filed by a Corporate Applicant, challenging order dated 30.09.2024 passed by National Company Law Tribunal, New Delhi Court III rejecting application filed by the Appellant under Section 10 of the Insolvency and Bankruptcy Code, 2016 and allowing application under Section 65 of the IBC being IA No.1955 of 2024 filed by the State Bank of India. By the impugned order, a penalty of Rs.1,00,000/- was also imposed on the Applicant/ Appellant.
Conclusion- Merely because proceeding under Section 13, sub-section (2) and (4) has been initiated by the creditor prior to filing of Section 10 application, cannot be a ground to hold that Section 10 application is filed with malicious and fraudulent intent.
Held that the basis of rejection of Section 10 application is the finding by the Adjudicating Authority that application has been filed with malicious and fraudulent intent to delay and halt the recovery proceedings. There mere fact that application is filed, consequent of which the recovery proceedings may be halted, cannot lead to conclusion that intent and purpose of the application is malicious and fraudulent. We, thus, are satisfied that Adjudicating Authority committed error in allowing Section 65 application filed by the SBI.
