The provisions of Section 65 of IBC have been brought on statute particularly to check and prevent misuse of the provisions of law, when application u/s 7 is found to have been filed for some ulterior motive other than the resolution of insolvency of a corporate debtor – Devi Enterprises Ltd. Vs. Gurudev Infra Projects Ltd. – NCLT Allahabad Bench
June 6, 2022
The Adjudicating Authority observed that if the claim of the financial creditor that when there is a debt which is due and payable both in law and fact and a default occurs, then the Adjudicating Authority must admit this application subject to other conditions i.e. the amount of default should be more than the threshold limit and not barred by limitation. In our view, if this plea is accepted then the provisions of Section 65 of IBC, 2016 would become redundant as an empty provision in the statute. We are of the view that this is certainly not the purpose of legislature. The provisions of Section 65 of IBC, 2016 have been brought on statute particularly to check and prevent misuse of the provisions of law, when application u/s 7 is found to have been filed for some ulterior motive other than the resolution of insolvency of a corporate debtor. The twin conditions for that is the application u/s 7 of IBC, 2016 should have been filed with malicious intent and for any purposes other than the resolution of insolvency.
