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2020 (10) TMI 536 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - debt dues to financial creditor or not - HELD THAT - The respondent has not filed reply even after given sufficient opportunities from 11.09.2019. On perusal of the records it is found that on 20.01.2020 the matter was fixed for filing affidavit from the side of the corporate debtor in view of admitting the debt, but, the corporate debtor has failed to file affidavit. However, during the course of hearing, the learned lawyer appearing on behalf of the corporate debtor admitted the debt on receiving instructions from the corporate debtor - On perusal of the records it is found that the letter of authority dated 06.08.2019 issued by Legal head of the applicant company authorising Mr. Kaushik Harjani, is proper and valid. The Adjudicating Authority is of the considered view that there is a debt due to financial creditor and there is default on the part of the corporate debtor. In the instant application, from the material placed on record by the Applicant, this Authority is satisfied that the application is complete in all respect and the Corporate Debtor committed default in paying the financial debt to the Applicant and the respondent company has acknowledged the debt - Application admitted - moratorium declared.
Issues Involved:
1. Filing of the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016. 2. Default in repayment by the corporate debtor. 3. Admission of debt by the corporate debtor. 4. Appointment of Interim Resolution Professional (IRP). 5. Declaration of moratorium. Issue-wise Detailed Analysis: 1. Filing of the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016: The petition was filed by the authorized signatory of the financial creditor, India Bulls Consumer Finance Limited, under Section 7 of the Insolvency and Bankruptcy Code, 2016, read with Rule 4 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. The financial creditor sought reliefs under Section 7(5)(a) and Section 13(1)(a)(b)(c) of the Code. 2. Default in repayment by the corporate debtor: The corporate debtor had availed a loan of ?35,37,646/- from the financial creditor, with an agreement to repay the loan in 36 equal monthly installments. However, the corporate debtor defaulted on the repayment schedule starting from 05.09.2018 and continued to default on subsequent installments. Despite repeated reminders and legal notices dated 20.02.2019 and 30.04.2019, the corporate debtor failed to make payments, leading to a total outstanding amount of ?38,25,124/- as per the foreclosure statement dated 18.06.2019. 3. Admission of debt by the corporate debtor: The corporate debtor did not file a reply despite multiple opportunities and failed to submit an affidavit admitting the debt. However, during the hearing, the corporate debtor's lawyer admitted the debt on instructions from the corporate debtor. The tribunal found the letter of authority dated 06.08.2019 issued by the legal head of the applicant company authorizing Mr. Kaushik Harjani to be proper and valid. 4. Appointment of Interim Resolution Professional (IRP): The tribunal found the application complete in all respects, with the financial creditor proposing the name of Mr. Navin Khandelwal as the Interim Resolution Professional. Mr. Khandelwal's declaration confirmed no pending disciplinary proceedings against him. The tribunal appointed Mr. Khandelwal as the IRP under Section 13(1)(c) of the Code. 5. Declaration of moratorium: The tribunal admitted the petition, declaring a moratorium under Section 14 of the Code, prohibiting: (i) Institution or continuation of suits or proceedings against the corporate debtor. (ii) Transfer, encumbrance, alienation, or disposal of any assets or legal rights of the corporate debtor. (iii) Foreclosure, recovery, or enforcement of any security interest. (iv) Recovery of any property by an owner or lessor. The tribunal directed that the supply of essential goods and services to the corporate debtor should not be interrupted during the moratorium. The moratorium would remain effective until the completion of the corporate insolvency resolution process or until the tribunal approves a resolution plan or orders liquidation. Conclusion: The application under Section 7 of the Insolvency and Bankruptcy Code, 2016, was found to be complete, and the corporate debtor's default was established. The tribunal admitted the petition, appointed an IRP, and declared a moratorium, thereby initiating the corporate insolvency resolution process. The petition was disposed of with no order as to costs, and a copy of the order was directed to be communicated to all relevant parties.
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