BGR Energy Systems Ltd.

An application under Section 9 of IBC cannot be maintained for a mere claim of interest – M/s. Macawber Beekay Pvt. Ltd. Vs. M/s. BGR Energy Systems Ltd. – NCLT Amaravati Bench

The Adjudicating Authority observed that there is a clear difference between the financial debt and operational debt. Declaring the Corporate Debtor as insolvent by ordering CIRP only because of the default in paying of interest which is not agreed upon, would be against the spirit of IBC. When by the date of admission the operational debt in terms of Section 5(21), which does not include interest, stands discharged, the interest alone which remains under the claim amount, does not qualify for an operational debt, for the default of which alone CIRP can be ordered. The Adjudicating Authority concluded that considering the clarity of the law which settled that an application under Section 9 of IBC cannot be maintained or continued for a mere claim of interest, this application is liable to be dismissed.

An application under Section 9 of IBC cannot be maintained for a mere claim of interest – M/s. Macawber Beekay Pvt. Ltd. Vs. M/s. BGR Energy Systems Ltd. – NCLT Amaravati Bench Read Post »

AA is not required to conduct a roving enquiry or examine the merits of dispute in a manner as if he were going to decide the issues on merit – Karpara Project Engineering Private Limite Vs. BGR Energy Systems Ltd. – NCLAT

The Adjudicating Authority is not required to conduct a roving enquiry or examine the merits of dispute in a manner as if he were going to decide the issues on merit. The Adjudicating Authority exercises a limited jurisdiction and cannot dwell upon the pros and cons of the claim or merits of dispute. The limited exercise required to be undertaken by the Adjudicating Authority extends only to sift the material for separating the grain from the chaff with a view to reject a palpably spurious defense. Likelihood of such defense succeeding or failing is not the concern of Adjudicating Authority. If the dispute exists in fact, is a pre-existing dispute and is not spurious, hypothetical or illusory, the Adjudicating Authority must reject the application.

AA is not required to conduct a roving enquiry or examine the merits of dispute in a manner as if he were going to decide the issues on merit – Karpara Project Engineering Private Limite Vs. BGR Energy Systems Ltd. – NCLAT Read Post »

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