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2018 (10) TMI 1743 - Tri - Insolvency and BankruptcyAdmissibility of petition - Initiation of CIRP - Respondent defaulted in making payment including interest - section 7 of the Insolvency Bankruptcy Code, 2016 read with Rule 4 of Insolvency Bankruptcy (Application to Adjudicating Authority), Rules 2016 - HELD THAT - This Adjudicating Authority, on perusal of the documents filed by the Petitioner, is of the view that the Corporate Debtor defaulted in repaying the loan availed and also placed the name of the Insolvency Resolution Professional to act as Interim Resolution Professional and there being no disciplinary proceedings pending against the proposed resolution professional, therefore the Application under sub-section (2) of section 7 is taken as complete, accordingly this Bench hereby admits this Petition, subject to imposing conditions. Petition admitted.
Issues:
Petition to initiate Corporate Insolvency Resolution process under section 7 of the Insolvency & Bankruptcy Code, 2016 due to default in payment of outstanding amount. Analysis: The Petitioner, a Financial Creditor, filed a Petition against the Corporate Debtor seeking to initiate the Corporate Insolvency Resolution process under section 7 of the Insolvency & Bankruptcy Code, 2016. The Petition stated that the Corporate Debtor defaulted in making payment of a sum of ? 119,76,00,000/- as on 31.05.2018, including interest, with the date of default being 31.12.2011. The credit facilities were renewed multiple times, with the final renewal letter dated 30.03.2012 showing outstanding amounts in cash credit and term loans, totaling to ? 119.76 crores. The Petitioner submitted various security documents related to the sanctioned facilities, including Deed of Mortgage, Demand Promissory Note, Letters of Continuity and Waiver, Deeds of Guarantee and Hypothecation, and Memorandums of Confirmation of pari passu charge and arrangement. The Petition also included a list of charges, statements of account, and a notice under Section 13(2) of the SARFAESI Act, 2002. Despite some partial payments made by the Corporate Debtor, the debt was not considered barred by limitation. The Corporate Debtor's Counsel requested multiple adjournments to file a reply and proposed a one-time settlement, but failed to comply with the deadlines set by the Adjudicating Authority. Consequently, the right to file a reply was forfeited, and the matter proceeded to be heard on merits. The Adjudicating Authority found that the Corporate Debtor defaulted in loan repayment, leading to the admission of the Petition to initiate the Corporate Insolvency Resolution process. The Adjudicating Authority appointed an Interim Resolution Professional and imposed a moratorium on various actions against the Corporate Debtor, ensuring the continuity of essential goods or services during the moratorium period. The order of moratorium was effective from a specified date until the completion of the resolution process or liquidation. Additionally, the public announcement of the resolution process was mandated, and the Interim Resolution Professional was tasked with carrying out functions as per the Insolvency & Bankruptcy Code. In conclusion, the Petition was admitted, and the Registry was directed to communicate the order to both parties and the Interim Resolution Professional within a specified timeframe.
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