Take notes as you read a judgment using our Virtual Legal Assistant and get email alerts whenever a new judgment matches your query (Query Alert Service). Try out our Premium Member services -- Free for one month.\n\nNational Company Law Appellate Tribunal\nM/S Devi Enterprises Ltd vs M/S Gurudev Infra Projects Ltd on 18 August, 2022\nAuthor: Ashok Bhushan\nBench: Ashok Bhushan\n         NATIONAL COMPANY LAW APPELLATE TRIBUNAL\n                PRINCIPAL BENCH, NEW DELHI\n            Company Appeal (AT) (Insolvency) No. 895 of 2022\n\nIN THE MATTER OF:\n\nDevi Enterprises Ltd.                                            ...Appellant\n\nVersus\n\nGurudev Infra Projects Ltd.                                    ...Respondent\n\nPresent:\n   For Appellant:       Mr. Santosh Kumar, Mr. Rajiv R. Mishra, Mr.\n                        Saurabh, Advocates\n     For Respondent:    Appearance not marked\n\n\n                                  ORDER\n\n18.08.2022:         Heard Learned Counsel for the Appellant and Learned\n\nCounsel for the Respondent.\n\n\n2.     This Appeal has been filed against the Order dated 23rd May, 2022 by\n\nwhich Order, the Adjudicating Authority has rejected the Section 7 Application\n\nfiled by the Appellant. The Adjudicating Authority while rejecting has also\n\nimposed a cost of Rs. 05 Lakhs on the appellant referring to Section 65 of the\n\nInsolvency and Bankruptcy Code, 2016. The Adjudicating Authority has\n\nreturned a finding that Section 7 Application have been filed for some ulterior\n\nmotive other than the resolution of the insolvency of a Corporate Debtor.\n\nConsequently, the Section 7 Application was rejected.\n\n\n3.      Learned Counsel for the Appellant challenging the Order contends that\n\nthe mere fact that Appellant and Respondent Company, the Directors are\n\nfather and son, the Directors are not common in both the Companies and in\n\nthe financial document, the amount of loan is mentioned. He further submits\n\nthat the Adjudicating Authority, there being admission of debt, ought to have\n\nadmitted Section 7 Application.\n                                        -2-\n4.    Learned Counsel for the Respondent refuting the submissions of\n\nLearned Counsel for the Appellant submits that present is a case where to\n\nsettle some dispute between the parties, Section 7 Application was filed and\n\nthe Adjudicating Authority has rightly rejected the same. Learned Counsel for\n\nthe Respondent pointed out the address of registered office of both the\n\nCompanies is the same, as reflected in the memo of Appeal.\n\n\n5.    We have considered the submissions of Learned Counsel for the parties\n\nand have perused the record.\n\n\n6.    The Adjudicating Authority has after considering the submissions of\n\nLearned Counsel for the parties, made following observations in Paragraph 16\n\nand 17:\n\n\n            "16.   Further, if the claim of the financial creditor that\n            when there is a debt which is due and payable both in\n            law and fact and a default occurs, then the\n            Adjudicating Authority must admit this application\n            subject to other conditions i.e. the amount of default\n            should be more than the threshold limit and not barred\n            by limitation. In our view, if this plea is accepted then\n            the provisions of Section 65 of IBC, 2016 would become\n            redundant as an empty provision in the statute. We are\n            of the view that this is certainly not the purpose of\n            legislature. The provisions of Section 65 of IBC,2016\n            have been brought on statute particularly to check and\n            prevent misuse of the provisions of law, when\n            application u/s 7 is found to have been filed for some\n            ulterior motive other than the resolution of insolvency\n            of a corporate debtor. The twin conditions for that is the\n                                       Company Appeal (AT) (Insolvency) No. 895/2022\n                                         -3-\n\n\n\n              application u/s 7 of IBC, 2016 should have been filed\n              with malicious intent and for nay purposes other than\n              the resolution of insolvency.\n\n              17.   In our view, this application has been filed for\n              such extraneous considerations and to settle personal\n              scores, which most unfortunately, is happening\n              between a father and son."\n\n7.    From the facts which has been brought on record it does appear that\n\nthere has been a contract with NHAI between the parties where dispute arose\n\nregarding their entitlement. When the Adjudicating Authority has come to the\n\nconclusion that Section 7 Application was filed for some ulterior motive other\n\nthan the resolution of insolvency of a Corporate Debtor, we do not find any\n\nerror in the Order rejecting Section 7 Application.\n\n\n8.    Learned Counsel for the Appellant lastly contended that amount of cost\n\nimposed is too heavy and present was not a case for imposition of such heavy\n\ncost. Considering the above, we reduce the amount of cost to Rs. 2 Lakhs. Rest\n\nof the Order is affirmed. The Appeal is dismissed subject to above. Learned\n\nCounsel for the Appellant seeks and allowed four weeks' time to deposit the\n\nabove cost.\n\n\n                                                       [Justice Ashok Bhushan]\n                                                                   Chairperson\n\n\n                                                               [Mr. Barun Mitra]\n                                                             Member (Technical)\n\nBasant/nn\n\n\n                                        Company Appeal (AT) (Insolvency) No. 895/2022