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IBC

 

Insolvency and Bankruptcy Code, 2016,  Section 7 – Admission made in an affidavit filed in another proceedings shall not be considered as a pleading but a document while ascertaining admission in a subsequent proceeding -  Counter affidavit qua admission of liability filed in an earlier proceeding - Admission made in the counter affidavit that was made in the first round of litigation, can by no means be described as a 'document' in an earlier petition that could not be relied upon -  The 'document' was not a pleading by the appellant - It was a counter affidavit by the corporate debtor in which a clear admission of the debt being outstanding was made -  NCLT order admitting application upheld. #2020 SCeJ 1667

 

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Held,

NCLT after a perusal of the documents, pleadings, and the supplementary affidavit of 03.08.2018, including the counter affidavit in the earlier section 7 application, came to the conclusion that a loan amount remained outstanding.   NCLAT recorded that documents which were already rejected by the adjudicating authority (NCLT) could not have been the basis of the order of admission.  NCLAT also recorded that there was no further evidence in support of the fact that any amount was outstanding.   Further, NCLAT also held that a 'document' filed in the earlier petition that was dismissed as withdrawn could not have been relied upon by the adjudicating authority .  The NCLAT is wrong on all these counts.

 

Documents evidencing an outstanding loan amount were produced; a supplementary affidavit dated 03.08.2018 was also relied upon; and the admission made in the counter affidavit that was made in the first round of litigation, can by no means be described as a 'document' in an earlier petition that could not be relied upon.  The 'document' was not a pleading by the appellant - it was a counter affidavit by the corporate debtor in which a clear admission of the debt being outstanding was made 

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