While a written contract cannot be treated as a pre-requisite to proving the existence of Financial Debt, the AA must be satisfied that the Corporate Debtor is not being dragged into CIRP mala fide for any purpose other than the resolution of the Insolvency – Gateway Offshore Pvt. Ltd. Vs. Runwal Realtors Pvt. Ltd. – NCLT Mumbai Bench
The Adjudicating Authority observed that it is the contention of the Corporate Debtor’s that there is no written contract regarding any loan being sanctioned to the Corporate Debtor by the Financial Creditors. In this regard, we would like to rely on the stand taken by the NCLAT in Narendra Kumar Agarwal and Ors. v Monotrone Leasing Private Limited and Ors. (2021) ibclaw.in 25 NCLAT (Order dated 19.01.2021) wherein it was held that the written contract cannot be treated as an essential element or prerequisite to prove the existence of Financial Debt. However, the Financial Creditor has failed to bring on record any other evidence in the form of a loan agreement, promissory note, contract or any document to substantiate its claim that there was a financial debt and a default of the same. The Financial Creditor has produced the Corporate Debtor’s Annual reports for the Financial Years 2016-17 and 2017-18. However, the same do not reflect any debt due specifically to the Financial Creditor.