{"id":201242,"date":"2018-09-03T14:30:01","date_gmt":"2018-09-03T09:00:01","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=201242"},"modified":"2018-12-13T17:14:04","modified_gmt":"2018-12-13T11:44:04","slug":"application-under-sections-7-9-or-10-i-nclt-not-required-to-record-detailed-decision-thereunder-nclat","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2018\/09\/03\/application-under-sections-7-9-or-10-i-nclt-not-required-to-record-detailed-decision-thereunder-nclat\/","title":{"rendered":"Application under Sections 7, 9 or 10 I&B Code not adversarial litigation; NCLT not required to record detailed decision thereunder: NCLAT"},"content":{"rendered":"

National Company Law Appellate Tribunal (NCLAT):<\/strong> A two-member bench comprising of Justice S.J. Mukhopadhaya, Chairperson and Justice Bansi Lal Bhat, Member (Judicial)\u00a0 dismissed an appeal filed against the order of the National Company Law Tribunal, Chennai whereby the application filed by the Financial Creditor under Section 7 of the Insolvency and Bankruptcy Code, 2016 was admitted.<\/p>\n

Firstly<\/em>, the appellant (shareholder of the Corporate Debtor) submitted that the respondent is not a Financial Creditor as defined in Section 5(7) read with Section 5(8). However, on facts, the Appellate Tribunal rejected the submission. It was found that the Rajkumar Impex Ghana Ltd. (subsidiary of the Corporate Debtor) had applied for a loan which was provided by Stanbic Bank Ghana Ltd. The Corporate Debtor executed guarantee <\/em>in favour of the Bank for the said loan. As such, the Bank became a Financial Creditor. Secondly<\/em>, the admission of application filed by the respondent under Section 7 for initiation of Corporate Insolvency Resolution Process was assailed. It was challenged on the ground that NCLT while admitting the application, did not record reasons in writing.<\/p>\n

The Appellate Tribunal rejected the second submission filed by the appellant as well. It observed that application under Section 7 is not a recovery proceeding or proceeding for determining of a claim on merit that can be decided only by a court of competent jurisdiction. An application under Sections 7, 9 or 10 of the Code not being a money claim or suit and not being an adversarial litigation, NCLT is not required to write a detailed decision as to which are the evidence relied upon for its satisfaction. NCLT is only required to be satisfied that there is a debt<\/em> and default <\/em>had occurred. In the present case, NCLT had held that a prima facie case was made out<\/em> by the applicant. As such, NCLT expressed its satisfaction about existence of debt <\/em>and default<\/em>. Thus, the appeal was dismissed holding it to be sans merit. [V.R. Hemantraj v. Stanbic Bank Ghana Ltd.,2018 SCC OnLine NCLAT 451<\/b><\/a>, dated 29-08-2018]<\/p>\n","protected":false},"excerpt":{"rendered":"

National Company Law Appellate Tribunal (NCLAT): A two-member bench comprising of Justice S.J. 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