The scope and jurisdiction of Adjudicating Authority under IBC being summary in nature, it is distinctly not as extensive as that of a civil court to enquire into disputes arising out of MoUs and related specific performance – Sanjay Pandurang Kalate, Suspended Director of Evirant Developers Pvt. Ltd. Vs. Vistra ITCL (India) Ltd. – NCLAT New Delhi
Hon’ble NCLAT held that:
(i) It is a settled proposition of law that to prove any transaction to be collusive and fraudulent in nature, the degree of proof and evidence required should be of unimpeachable nature and beyond reasonable doubt.
(ii) The scope and jurisdiction of the Adjudicating Authority being summary in nature, it is distinctly not as extensive as that of a civil court to enquire into disputes arising out of MoUs and related specific performance which have been agitated in the IA.
(iii) Allowing such meritless and unscrupulous litigation would logically entail derailing the insolvency resolution process which goes against the twin objectives of the IBC of maximization of the value of assets and time-bound insolvency resolution.
(iv) There is no infirmity in the findings of the Adjudicating Authority that the Financial Creditor having successfully proved the financial debt and default on the part of the Corporate Debtor, Section 7 application has been admitted.
(v) Even if for arguments sake we accept the contention raised by the Appellant that there were serious internal disputes amongst the Respondents that cannot be a cogent and reasonable ground for denying the Financial Creditor their right to claim payment towards the debt owed to them by the Corporate Debtor.
