The NCLAT, Chennai Bench expounded that when the Appellant itself chose to join hands with the co-borrower and owned all rights and liabilities as a co-borrower,then the Section 7 application of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “IBC”) was rightly admitted against the Appellant.
Subsequently, even board resolution along with addendum agreement was executed.
Therefore, the Appellant was a co-borrower against whom Section 7 Application was maintainable.
Brief Facts:
The present appeal has been filed by 2 suspended directors of the co-borrower against the order of the NCLT vide which application under Section 7 of the IBC was admitted.
Brief Background:
4 financial facilities were granted to the Corporate Debtor by the financial creditor. Subsequently, on default, application for insolvency was filed.
Contentions of the Appellant:
It was argued that the Appellant was never disbursed any loan, so the application should not have been admitted.
It was contended that the Appellant was only added as a co-borrower and no disbursements were made to the Appellant.
Observations of the Tribunal:
It was observed that the Appellant itself chose to join hands with the co-borrower and owned all rights and liabilities as a co-borrower. Subsequently, board resolution along with addendum agreement was also executed. Therefore, the Appellant was a co-borrower against whom Section 7 Application was maintainable.
The decision of the Tribunal:
Based on the aforementioned reasonings, the Bench upheld the order of the NCLT and accordingly dismissed the appeal.
Case Title: Ashique Ponnamparambafh & Anr. v. BMW India Financial Services Pvt. Ltd.
Case No.: Company Appeal (AT) (CH) (Ins) No. 301/2021
Coram: Justice Rakesh Kumar Jain, Mrs. Shreesha Merla (Technical Member)
Advocate for Appellant: Adv. Mr. P.H. Arvindh Pandian
Advocate for Respondent: Adv. Mr. Diwahar Maheshwari
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