Whether insufficiently stamped loan/ mortgage agreements can have a bearing on the adjudication of an application u/s 7 of the IBC in case the claim can otherwise be substantiated? – Bank of India Ltd. Vs. BD & P Hotels (India) Pvt. Ltd. – NCLT Mumbai Bench

The Adjudicating Authority held that:
(i) The default arises when the debt due is not paid and the subsequent events do not give rise to any fresh date of default. The subsequent acknowledgement acknowledges the liability and does not cause any default having come into existence.
(ii) The Corporate Debtor has challenged the maintainability of this Petition on the ground of insufficiency of stamp duty paid on loan / mortgaged documents in view of decision of M/s. N.N. Global Mercantile Pvt. Ltd. Vs. M/s. Indo Unique Flame Ltd. & Others (2023) ibclaw.in 56 SC.
(iii) The Tribunal, while adjudicating upon an application for admission into Resolution Process filed by a creditor, is mandated to ascertain the existence of the debt, and any default in payment of such debt. Ascertainment of existence of debt and default is not necessarily to be evidenced by a loan agreement or ancillary agreement or mortgage agreement. Instead, it can be proved by other means, as provided in Section 7(3) of the IBC prescribing record of default recorded with the information utility or such other records or evidence such may be specified.
(iv) It shall be pertinent to note that the stamp duty even if paid by the lender, is recoverable from the borrower i.e. the Corporate Debtor in the present case. This Bench is of the considered view that interest of the state shall be protected in case IRP/RP is directed to notify the collector of stamps to file its claim for a deficiency in a stamp duty in case there is an objection raised by the Corporate Debtor.

Whether insufficiently stamped loan/ mortgage agreements can have a bearing on the adjudication of an application u/s 7 of the IBC in case the claim can otherwise be substantiated? – Bank of India Ltd. Vs. BD & P Hotels (India) Pvt. Ltd. – NCLT Mumbai Bench Read Post »