NATIONAL COMPANY LAW APPELLATE TRIBUNAL

NEW DELHI

Company Appeal (AT) (Insolvency) No. 640 of 2019

IN THE MATTER OF:

Mrs. Bela Juneja

…Appellant

Versus

India Bulls Housing

Finance Ltd. & Anr.

…Respondents

Present:

For Appellant :

Mr. Vaibhav Tyagi, Advocate

For Respondents :

Mr. Sumesh Dhawan, Ms. Vatsala Kak and

Ms. Geetika Sharma, Advocates

O R D E R

01.07.2019

‘Indiabulls Housing Finance Ltd.’ filed an application u/s 7 of

the ‘Insolvency and Bankruptcy Code, 2016’ (for short, ‘the I&B Code’) against

‘BHA Associates Private Limited’ (Corporate Debtor). The Adjudicating Authority

(National Company Law Tribunal), Principal Bench, New Delhi having admitted

the application against ‘Mrs. Bela Juneja’, who was Director of ‘BHA Associates

Private Limited’ (Corporate Debtor). Learned counsel appearing on behalf of the

Appellant submits that the Adjudicating Authority declared the ‘Corporate

Debtor’ as ‘Non-performing Asset’ (NPA) is under challenge in view of the

agreement. However, such submission cannot be accepted under ‘Insolvency

and Bankruptcy Code, 2016’ (for short, ‘the I&B Code’). It is not necessary to

see whether ‘debt’ of ‘Corporate Debtor’ has become NPA in view of decision of

the Hon’ble Supreme Court in ‘M/s. Innoventive Industries Ltd. Vs. ICICI Bank

2

Company Appeal (AT) (Insolvency) No. 640 of 2019

Ltd. – (2018) 1 SCC 407’, wherein Hon’ble Supreme Court observed and held

as follows:

“27. The scheme of the Code is to ensure that when a

default takes place, in the sense that a debt

becomes due and is not paid, the insolvency

resolution process begins. Default is defined in

Section 3(12) in very wide terms as meaning non-

payment of a debt once it becomes due and

payable, which includes non-payment of even

part thereof or an instalment amount. For the

meaning of “debt”, we have to go to Section 3(11),

which in turn tells us that a debt means a liability

of obligation in respect of a “claim” and for the

meaning of “claim”, we have to go back to Section

3(6) which defines “claim” to mean a right to

payment even if it is disputed. The Code gets

triggered the moment default is of rupees one lakh

or more (Section 4). The corporate insolvency

resolution process may be triggered by the

corporate debtor itself or a financial creditor or

operational creditor. A distinction is made by the

Code between debts owed to financial creditors

and operational creditors. A financial creditor has

been defined under Section 5(7) as a person to

whom a financial debt is owed and a financial

3

Company Appeal (AT) (Insolvency) No. 640 of 2019

debt is defined in Section 5(8) to mean a debt

which is disbursed against consideration for the

time value of money. As opposed to this, an

operational creditor means a person to whom an

operational debt is owed and an operational debt

under Section 5(21) means a claim in respect of

provision of goods or services.

28. When it comes to a financial creditor triggering the

process, Section 7 becomes relevant. Under the

explanation to Section 7(1), a default is in respect

of a financial debt owed to any financial creditor

of the corporate debtor – it need not be a debt

owed to the applicant financial creditor. Under

Section 7(2), an application is to be made under

sub-section (1) in such form and manner as is

prescribed, which takes us to the Insolvency and

Bankruptcy

(Application

to

Adjudicating

Authority) Rules, 2016. Under Rule 4, the

application is made by a financial creditor in

Form 1 accompanied by documents and records

required therein. Form 1 is a detailed form in 5

parts, which requires particulars of the applicant

in Part I, particulars of the corporate debtor in Part

II, particulars of the proposed interim resolution

professional in part III, particulars of the financial

4

Company Appeal (AT) (Insolvency) No. 640 of 2019

d