ORDER

09.05.2023: Heard learned counsel for the Appellant. This Appeal has been filed against order dated 02.03.2023 passed by the Adjudicating Authority by which order Section 7 application filed by the Financial Creditor has been admitted. The Financial Creditor filed application under Section 7 for a Principal Amount of Rs.1.80 Crore. The application was filed in the year 2020. Notices were issued to the Corporate Debtor. Affidavit of service was filed but none appeared for the Corporate Debtor. The Adjudicating Authority proceeded to hear the application and admitted the Section 7 application. The Financial Creditor relied on the Balance Sheet of the Corporate Debtor, where the amount was shown as unsecured loan. Relying on the said statement, the Adjudicating Authority has directed for admission of the application. In Para 8 of the order, the Adjudicating Authority has made following observations:

Company Appeal (AT) (Insolvency) No.577 of 2023 “8.

As regards the financial debt, for which default has occurred, it is declared in Sl. No. 1 of Part IV of the amended application in Form I that a total amount of Rs.1,80,00,000/- was disbursed as loan to the Corporate Debtor. Details of disbursement of this loan is supported by the Bank Statements of the Applicant- Financial Creditor maintained with Punjab National Bank, Civil Lines, Meerut Branch, and State Bank of India, Meerut Cantt., Meerut Branch annexed as Annexure A-3 at St. No. 7 of Part V of the Application in Form 1. As per the bank statement, the details of disbursement of loan by the Financial Creditor to Corporate Debtor is as under:

The above-captioned financial debt has also been found to be supported with the ledger account of the Corporate Debtor maintained in the books of the Financial Creditor and the Audited Balance Sheet of the Corporate Debtor for the F.Y. 2016-17 duly signed by its directors and Statutory auditor, annexed as Annexure A-2 and Annexure A-5 respectively at Sl.

S. No.	Date	Amount (Rs.)	Page No. (relevant pages of amended application)
1.	22.12.2014	50,00,000/-	21
2.	30.12.2014	1,00,00,000/-	22
3.	16.01.2015	30,00,000/-	23

S. No.	Date	Amount (Rs.)	Page No. (relevant pages of amended application)
1.	22.12.2014	50,00,000/-	21
2.	30.12.2014	1,00,00,000/-	22
3.	16.01.2015	30,00,000/-	23

No. 8 of Part V of the amended application in Form 1. In this Balance-Sheet, while providing the details of the related parties transactions in Notes to Accounts, Rs.1,80,00,000/- is shown in the name of the Financial Creditor at Sl. No. 8 as part of total amount of Rs.11,25,70,488/- declared as Loan and Advances Company Appeal (AT) (Insolvency) No.577 of 2023 under the Head of "Long Term Borrowings" of the said Balance Sheet. Thus, we find that this debt is an admitted debt duly reflected in the records of the Corporate Debtor also. As this financial debt remained outstanding the Applicant Financial Creditor computed interest amounting to Rs.1,99,07,506/- shown at Sl. No. 2 of Part IV of the application in Form 1 and total amount claimed to be in default is shown at Rs.3,79,07,506/- including Principal amount of Rs.1,80,00,000/- and interest of Rs.1,99,07,506/-. We have also found that the Financial Creditor on account of failure of the Corporate Debtor to repay the said debt, served a recalling notice dated 15.05.2019, annexed as A-7 of the amended application for recalling the outstanding debt. However, no reply to said recall notice has been filed by the Corporate Debtor. We clearly find that the Corporate Debtor did not make any effort to settle the claims of the Financial Creditor and defaulted on repayment of financial debt. It has not only defaulted in repaying the amount of the financial debt but also defaulted on giving the built-up and complete units at the building construction project (for which the said financial debt was taken) equivalent to the value of the principal amount alongwith interest payable to the Financial Creditor in lieu of repayment of financial debt.