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2018 (1) TMI 1356 - Tri - Insolvency and BankruptcyCorporate insolvency resolution process - debt or disputed debt - Held that - The Corporate Debtor has utterly failed to show any dispute and further failed to show that amount as claimed was not due. This is a petition filed by the Financial Creditor under Section 7 of I&B Code. Section 7 deals with initiation of Corporate Insolvency Resolution Process by Financial Creditor. The Financial Creditor has complied the provisions of Section 7 of I&B Code. Financial Creditors/Petitioners has produced evidence of default and also furnished the name of Resolution Professional. Therefore there are grounds to admit the Petition. Here the Petitioners have given full details of Corporate Debtor in Form No.l in the relevant columns. The ID number of the Company/Corporate Debtor is given and details of Registered Office and Corporate Office and address details. This Bench admits the petition under Section 7 of Insolvency and Bankruptcy Code 2016 declaring moratorium for the purposes referred to in Section 14 .
Issues Involved:
1. Initiation of Insolvency Resolution Process under Section 7 of Insolvency and Bankruptcy Code. 2. Dispute over the existence and repayment of debt. 3. Allegations of document fabrication and misuse of cheques. 4. Admissibility of evidence and documents. 5. Appointment of Interim Resolution Professional (IRP). Issue-Wise Detailed Analysis: 1. Initiation of Insolvency Resolution Process under Section 7 of Insolvency and Bankruptcy Code: The petition was filed by the Financial Creditors under Section 7 of the Insolvency and Bankruptcy Code (I&B Code) to initiate the Insolvency Resolution Process against the Corporate Debtor. The Financial Creditors provided a loan of ?1.00 Cr. to the Corporate Debtor, and a loan agreement was executed on 17.07.2014, with a repayment schedule agreed upon. The Corporate Debtor defaulted on the repayment from February 2015, leading to the initiation of proceedings by the Financial Creditors. 2. Dispute over the Existence and Repayment of Debt: The Corporate Debtor contended that the debt claimed by the Financial Creditors was disputed and had been repaid. The Corporate Debtor argued that the amount was paid through open cheques and cash, and alleged that no amount was due. However, the tribunal noted that the Corporate Debtor failed to provide detailed evidence of the alleged repayments, such as cheque numbers, amounts, dates, and bank details. The tribunal found the Corporate Debtor's claims unsupported and concluded that the debt remained unpaid. 3. Allegations of Document Fabrication and Misuse of Cheques: The Corporate Debtor alleged that the Financial Creditors fabricated letters and misused blank cheques collected during previous dealings. The tribunal found no material evidence to support these allegations. The tribunal noted that the Corporate Debtor had admitted default in several letters and had issued fresh cheques, which were dishonored due to insufficient funds. These actions indicated acknowledgment of the debt and default. 4. Admissibility of Evidence and Documents: The tribunal examined the documents provided by both parties. The Financial Creditors submitted the loan agreement, mortgage deed, personal guarantees, hundis, bank statements, and repayment schedule. The Corporate Debtor's documents, including payment sheets and cancelled cheques, were found irrelevant or disconnected from the loan transaction. The tribunal emphasized that unsupported allegations and irrelevant documents could not establish a dispute. 5. Appointment of Interim Resolution Professional (IRP): The Financial Creditors proposed Shri Ravi Sankar Devarakonda as the Interim Resolution Professional (IRP), providing his consent and confirming no disciplinary proceedings against him. The tribunal found the proposal compliant with Section 7 of the I&B Code and appointed him as the IRP. The tribunal also declared a moratorium as per Section 14 of the Code, prohibiting suits, asset transfers, and recovery actions against the Corporate Debtor during the resolution process. Conclusion: The tribunal admitted the petition under Section 7 of the I&B Code, initiating the Corporate Insolvency Resolution Process. The tribunal declared a moratorium and appointed Shri Ravi Sankar Devarakonda as the Interim Resolution Professional. The petition was allowed, and the resolution process was to proceed as specified under the Code.
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