Ravi Mahajan Vs. Sunrise Denmark A/S, Denmark [Company Appeals (AT) (Insolvency) Nos. 141 & 146 of 2017] - Synopsis
Team SoOLEGAL 26 Apr 2021
In this case, Ravi Mahajan Vs. Sunrise Denmark A/S, Denmark [Company Appeals (AT) (Insolvency) Nos. 141 & 146 of 2017], the respondent company Sunrise 14 A/S Denmark had filed an application under Section 7 of Insolvency Bankruptcy Code, 2016 against M/S Muskan Power Infrastructure Limited (Corporate Debtor). On 28th July, 2017, the Adjudicating Authority had accepted the application and declared moratorium and also appointed an Interim Resolution Professional. Being aggrieved, the appellant had filed an appeal to the National Company Law Appellate Tribunal. Learned Counsel on behalf of the appellant had submitted that, it is necessary to submit record of default or certificate as per Section 7(3)(a) along with the application under Section 7 of Insolvency Bankruptcy Code, 2016. It was contended that, as no such documents for record of default were submitted by the financial creditor hence, this particular application was not maintainable. According to the respondent, no objection was made before the Adjudicating Authority by the appellant. The respondent had also stated that Adjudicating Authority should obey the Golden Rule of Principles of Interpretation to interpret the presence of default. The Court should obey the purposive interpretation to achieve the objective i.e. presence of default to the satisfaction of the Appellate Authority which has been achieved.

The Bench had stated that, in part V of Form1, financial contract details have been listed to prove the presence of financial debt and the date of default, but no record of default has been documented with information utility or any other proof of default has been enclosed in accordance with Insolvency Bankruptcy Code, 2016. According to Rule 6 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, a Financial Creditor must file an application under Section 7 in Form 5 along with the required documentation and records. It is mandatory to provide documents for record of default and if there is no record of default then the application must be treated as incomplete and must be rejected. The order of the Adjudicating Authority was set aside and the appellant company was allowed to function independently. 

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