2019 (1) TMI 1750 - Tri - Insolvency and Bankruptcy

Maintainability of petition - initiation of CIRP - Financial Debt - HELD THAT - The Applicants sent notices demanding repayment of the amount, and even though a reply dated 02.11.2017 was received from the Corporate Debtor it is seen that no valid grounds have been out forth by the Corporate Debtor to stave off the claim and the reply it is seen is rather evasive. The Tribunal is hence of the view that the loan was due and payable when the repayment was demanded and since there has been no repayment till date there is default in repayment of the financial debt and that a default has been committed in terms of Section 3(12) of the Code of a financial debt as defined under Section 5(8) of the Code and that the Applicant has rightly invoked the provisions of the Code. It is also seen from the Application that the above named IRP has given a written consent in Form 2 wherein he has agreed to accept appointment as an IRP if Application is admitted. Further, it is also evident from the said Form 2 as filed by the IRP signed under his hand that he is not a related party to the Corporate Debtor and that he is eligible to be appointed as an independent director on the Board of the Corporate Debtor - Certificate of registration of the IRP as issued by the Insolvency and Bankruptcy Board of India (IBBI) and self attested has also been enclosed along with the Application by the proposed IRP and taking into consideration all the above, this Tribunal finds that this is a fit case to be admitted in terms of Section 7 of the Code and thereby initiate corporate insolvency resolution process as against the Corporate Debtor. Application disposed off.

Summary

Issues:
Application under Insolvency and Bankruptcy Code, 2016 for default in repayment of loan by Corporate Debtor.

Analysis:
1. Default in Repayment: The Applicant claimed to be the Financial Creditor of the Respondent Company, stating that a loan was disbursed but not repaid within the agreed timeframe. The interest payable on the loan was also mentioned, along with the date of disbursement and default. The Corporate Debtor failed to repay the loan despite a notice from the Applicant.

2. Response of Respondent: The Respondent contended that there was an agreement to repay the amount in installments until a certain date. It was claimed that some amount had already been transferred to the Financial Creditor. The Respondent asserted its solvency and ability to clear debts.

3. Judicial Review: The Tribunal reviewed the Application, responses, and evidence provided. It noted the undisputed loan disbursement by the Applicant and the partial repayment claimed by the Respondent. The Tribunal found the Respondent's submission on a compromise agreement to be unsubstantiated as no executed agreement was presented.

4. Adjudication and Resolution: The Tribunal concluded that the loan was due and payable, considering the lack of repayment and evasive response from the Corporate Debtor. It invoked the provisions of the Insolvency and Bankruptcy Code, appointing an interim resolution professional (IRP) for further proceedings.

5. Appointment of IRP: The named IRP consented to the appointment and met the eligibility criteria. The Tribunal found the case suitable for admission under Section 7 of the Code, initiating the corporate insolvency resolution process against the Corporate Debtor.

6. Moratorium and Suspension: The Tribunal imposed a moratorium on the Corporate Debtor as per Section 14 of the Code, suspending legal actions against the company. The Board of Directors was suspended, and the duration of the moratorium was specified until the completion of the insolvency resolution process.

7. Operational Directions: The Tribunal directed the registry to communicate the order to the parties involved promptly. The IRP was to be provided with a copy of the order, and the IBBI was to receive a record copy. The application was disposed of with these directions in place.