Oral agreement cannot per se be enforced by the court unless corroborated with other substantive documents – M/s Catalyst Refinery Services Pvt. Ltd. Vs. M/s Ganpati Global Pvt. Ltd. – NCLT Jaipur Bench
To prove the oral contractual obligation on the part of the Corporate Debtor to repay the loan on demand, the Financial Creditor has relied on payment of unspecific irregular rate of interest and deduction of TDS whereas this neither reveals when the debt became due and payable nor it proves the default on part of the Corporate Debtor thereon. In the absence of a ‘Financial Contract’ specifying what is the actual amount disbursable, tenure of the debt, interest payable and date of repayment, such contention of the Financial Creditor is not-tenable.
The mere plain reading of the provisions under Section 7 of the IBC shows that to initiate CIRP under Section 7 of the Code, the Applicant must prima facie establish that there is a financial debt and the default has been committed in respect of that financial debt by the Corporate Debtor. All of these documents annexed by the Applicant are unable to prove any default of any debt which was owed by the Corporate Debtor to the Applicant.
