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Home Case Index All Cases Insolvency and Bankruptcy Insolvency and Bankruptcy + Tri Insolvency and Bankruptcy - 2021 (2) TMI Tri This

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2021 (2) TMI 51 - Tri - Insolvency and Bankruptcy


Issues Involved:
1. Validity of the financial debt claimed by the petitioner.
2. Existence of default on the part of the corporate debtor.
3. Completeness and admissibility of the application under Section 7 of the Insolvency and Bankruptcy Code, 2016.
4. Appointment of the Interim Resolution Professional (IRP).
5. Declaration of moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016.

Issue-wise Detailed Analysis:

1. Validity of the Financial Debt Claimed by the Petitioner:
The petitioner, a non-banking finance company, sanctioned multiple loans to the respondent, an unlisted public limited company engaged in waste management. The loans include:
- A working capital loan of ?4 crores on 26-12-2014.
- An additional loan of ?1.5 crores on 27-05-2015.
- A loan of ?80 lakhs and another ?20 lakhs on 17-06-2016.
The petitioner provided evidence such as facility agreements, deeds of personal guarantee, and promissory notes. The respondent admitted to taking these loans but disputed the calculations and the absence of a repayment schedule. However, the petitioner presented a duly signed repayment schedule, confirming the validity of the financial debt.

2. Existence of Default on the Part of the Corporate Debtor:
The petitioner issued a notice on 17-10-2018 demanding payment of the unpaid financial debt. The respondent failed to make the payment, leading to a default amounting to ?2,24,74,685 as of 20-05-2019. The respondent's objection regarding the absence of a repayment schedule was dismissed as the petitioner provided sufficient documentation, including a signed repayment schedule, proving the existence of default.

3. Completeness and Admissibility of the Application under Section 7 of the Insolvency and Bankruptcy Code, 2016:
The application was found to be complete in all respects, including the prescribed Form 1 and necessary documents. The adjudicating authority confirmed that the application was filed within the limitation period and that the financial debt and default were established. The application met the requirements under Section 7(2) of the Insolvency and Bankruptcy Code, 2016, and was deemed admissible.

4. Appointment of the Interim Resolution Professional (IRP):
The petitioner proposed the name of Mr. Manish Shah as the Interim Resolution Professional. The adjudicating authority appointed Mr. Manish Shah, confirming that no disciplinary proceedings were pending against him. His appointment was in accordance with the prescribed rules and regulations.

5. Declaration of Moratorium under Section 14 of the Insolvency and Bankruptcy Code, 2016:
The adjudicating authority declared a moratorium, prohibiting:
- Institution or continuation of suits or proceedings against the corporate debtor.
- Transferring, encumbering, or disposing of any assets of the corporate debtor.
- Actions to foreclose, recover, or enforce any security interest.
- Recovery of any property by an owner or lessor.
The moratorium ensures that the supply of goods and essential services to the corporate debtor continues without interruption during the resolution process.

Conclusion:
The application under Section 7 of the Insolvency and Bankruptcy Code, 2016, was admitted, and a moratorium was declared. The Interim Resolution Professional was appointed, and the corporate insolvency resolution process was initiated, confirming the existence of financial debt and default by the corporate debtor. The petition was disposed of with no order as to costs.

 

 

 

 

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