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2019 (5) TMI 918 - Tri - Insolvency and BankruptcyInitiation of Corporate Insolvency Resolution Process - Corporate Debtor - Corporate Debtor failed to make payment of ₹ 4650.66 lakhs (including interest) - HELD THAT - The Hon ble Supreme Court in the matter of Innoventive Industries Limited V. ICICI Bank Anr. 2017 (9) TMI 58 - SUPREME COURT , has held that the provisions of Section 7 become applicable as soon as a financial debt is established and there is an existence of a default. The Hon ble court has expressed that the moment the Adjudicating Authority is satisfied that a default in repayment of debt had occurred; the process of insolvency is to be triggered unless the application is incomplete. The Financial Creditor has stated that as on 31.07.2018, ₹ 4650.66 lakhs (including interest) is due and payable by the Corporate Debtor to the Financial Creditor. The Financial Creditor has stated that the total amount of debt granted, disbursed and restructured from 21.03.12016 and at present aggregate credit limit is of ₹ 2750.00/- lakhs. It is further stated that the account of the Corporate Debtor was declared as Non-Performing Asset w.e.f. 31.03.2016 on account of default in making payment to the Financial Creditor - This Petition reveals that there is a debt as defined in Section 3(11) of IBC; there is a default within the meaning of Section 3(12) of IBC; the application of the Financial Creditor is complete; the amount of more than Rs one lac is a due and no disciplinary proceedings are pending against the proposed resolution professional. Therefore, this petition deserves to be admitted. Petition admitted.
Issues Involved:
Company petition under Section 7 of Insolvency & Bankruptcy Code, 2016 by Financial Creditor against Corporate Debtor for non-payment of debt. Detailed Analysis: 1. Debt Default and Petition Filing: The Company Petition was filed by a Financial Creditor, the Cosmos Co-operative Bank Ltd., against the Corporate Debtor, Parshuram Forge Pvt. Ltd., under Section 7 of the Insolvency & Bankruptcy Code, 2016, due to the Corporate Debtor's failure to pay &8377; 4650.66 lakhs, including interest. 2. Debt Details and Charge Creation: The Financial Creditor mentioned in the petition that the debt was granted, disbursed, and restructured from 21.03.2016, with an aggregate credit limit of &8377; 2750.00 lakhs. Additionally, the Corporate Debtor created a charge on its movable and immovable assets to secure the credit facilities. 3. Legal Actions and Non-Performing Assets: The Financial Creditor classified the Corporate Debtor's account as Non-Performing Assets on 31.03.2016 due to non-payment. Legal actions were taken, including a recall notice and notices under the SARFAESI Act, 2002, to recover the outstanding amount. 4. Interim Resolution Professional Appointment: The Financial Creditor proposed Mr. Laxman Digambar Pawar for the appointment of the Interim Resolution Professional in the petition. 5. Corporate Debtor's Defense: The Corporate Debtor, in its reply, argued that the petition was not maintainable, citing industry-wide challenges leading to heavy losses. They also mentioned a pending one-time settlement proposal with the bank. 6. Judicial Precedent and Decision: Referring to the Supreme Court's decision in Innoventive Industries Limited v. ICICI Bank, the Tribunal emphasized that once a default in repayment of debt is established, the insolvency process must be initiated. The Tribunal found the petition complete and admitted it, as per the requirements under the IBC. 7. Final Order and Directions: The Tribunal admitted the Company Petition, initiating the corporate insolvency resolution process against the Corporate Debtor. Various restrictions were imposed, including a moratorium period, appointment of the Interim Resolution Professional, and communication of the order to all parties involved. This detailed analysis covers the key aspects of the judgment, including debt default, legal actions, defense arguments, judicial precedent application, and the final decision and directives issued by the Tribunal.
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