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2019 (5) TMI 1740 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor defaulted in making repayment - existence of default or not - HELD THAT - The Corporate Debtor, despite notice has failed to make its appearance before this Tribunal and defend its cause against the petition as filed by the Financial Creditor claiming the defaulted amount. The records as filed by the petitioner clearly discloses that there is an existence of 'financial debt' and that the petitioner is a Financial Creditor taking into consideration the provisions of IBC, 2016 and of which the Corporate Debtor/respondent company has committed default - Under the circumstances, this Tribunal is of the view that the petition is required to be admitted and Corporate Insolvency Resolution Process (CIRP) to be initiated as against the Corporate Debtor. Application admitted.
Issues:
Initiation of Corporate Insolvency Resolution Process under IBC, 2016 against the respondent company. Analysis: The petitioner filed a petition under IBC, 2016 as a Financial Creditor against the respondent company, Raj Buildhome Pvt. Ltd., seeking to initiate the Corporate Insolvency Resolution Process (CIRP). The petitioner claimed that a loan of ?41,90,000 was granted to the respondent company for the purchase of land, and the funds were transferred to the company's bank account from the petitioner, his wife, and mother. The respondent company allegedly promised to pay 24% annual interest compounded annually and agreed to share monthly receipts with the petitioner. Despite several emails, the loan amount, interest, and guaranteed amount were not repaid by the respondent, leading to allegations of fraud and cheating by the petitioner. The respondent company issued post-dated cheques to the petitioner, which were subsequently dishonored, leading to criminal proceedings under the Negotiable Instruments Act. Despite notice, the respondent failed to appear before the Tribunal, and the petitioner provided evidence of the financial debt owed by the respondent. The Tribunal found that the petition disclosed the existence of financial debt and that the petitioner qualified as a Financial Creditor under IBC, 2016. Consequently, the Tribunal decided to admit the petition and initiate the CIRP against the respondent company. The Tribunal appointed an Insolvency Resolution Professional (IRP) to act as the Interim Resolution Professional for the respondent company. A moratorium under section 14 of IBC, 2016 was imposed from the date of the order, suspending the powers of the Board of Directors of the respondent company. The IRP was tasked with taking charge of the company's affairs and assets, with the Board of Directors' powers suspended. The Board of Directors and all personnel were directed to cooperate with the IRP, who was mandated to file status reports on the progress of the CIRP. The order was to be communicated to all relevant parties, including the Financial Creditor, Corporate Debtor, and the appointed IRP. The IRP was instructed to inform the Registrar of Companies (ROC) in Jaipur about the admission of CIRP against the respondent company for proper registration. In conclusion, the application for initiating the CIRP against the respondent company was admitted, and the necessary steps were taken to commence the resolution process in accordance with the provisions of IBC, 2016.
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