2018 (5) TMI 2001 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP process - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT - This Adjudicating Authority, on perusal of the documents filed by the Creditor, 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 - petition liable to be admitted. Petition admitted - moratorium declared.

Summary

Issues Involved:
1. Default on loan payment by Corporate Debtor
2. Res Judicata
3. Limitation of debt claim
4. Suppression of facts
5. Non-joinder of necessary parties
6. Service of notice under I&B Code 2016
7. Dispute of claim amount
8. Forum shopping
9. Delay in disbursement of loan and consequential loss
10. Authority to file the Petition
11. Inflated claim
12. CIBIL Report

Default on loan payment by Corporate Debtor:
The Petitioner, a bank, filed a petition against the Corporate Debtor for initiation of Corporate Insolvency Resolution Process due to default in loan payment. The debt amount was specified, along with relevant documents supporting the loan agreement. The Corporate Debtor challenged the petition on various grounds.

Res Judicata:
The Corporate Debtor claimed the petition was barred by Res Judicata, but the Tribunal rejected this argument as the claim had not been previously decided by any judicial authority.

Limitation of debt claim:
The Corporate Debtor argued that the debt claim was time-barred due to the initial loan sanction in 2013. However, the Tribunal found the claim valid based on subsequent loan restructuring and documentation provided by the Petitioner.

Suppression of facts:
The Corporate Debtor alleged the Petitioner initiated proceedings to pressure them into paying an unrealistic amount. The Tribunal noted that relevant proceedings were disclosed, and non-disclosure was not an issue.

Non-joinder of necessary parties:
The Corporate Debtor contended that third-party property was mortgaged for the loan, but the Tribunal ruled that such parties need not be joined in a petition against the Corporate Debtor.

Service of notice under I&B Code 2016:
The Corporate Debtor claimed no notice was served under the I&B Code, but the Tribunal clarified that no separate demand notice was required before filing the petition.

Dispute of claim amount:
The Corporate Debtor disputed the claim amount but failed to provide substantial evidence. The Tribunal stated discrepancies could be addressed during the resolution process.

Forum shopping:
The Corporate Debtor's argument of forum shopping was dismissed, citing the provisions of the I&B Code and a precedent by the NCLAT.

Delay in disbursement of loan and consequential loss:
The Corporate Debtor's claim of delay in loan disbursement was rejected, with the Tribunal noting the untimely challenge to the loan after default.

Authority to file the Petition:
The Corporate Debtor questioned the authority of the bank officer who filed the petition, but the Tribunal upheld the officer's authorization based on relevant precedents.

Inflated claim:
The Corporate Debtor alleged an inflated claim without substantial proof, leading the Tribunal to emphasize the criteria for admitting a petition based on debt and default.

CIBIL Report:
The Corporate Debtor raised concerns about the CIBIL Report's accuracy, but the Tribunal clarified that the report was only one of several documents considered in evaluating the petition.

Conclusion:
The Tribunal admitted the petition, imposed restrictions on legal actions against the Corporate Debtor, appointed an Interim Resolution Professional, and initiated the corporate insolvency resolution process.

This detailed analysis covers the various issues raised in the judgment, outlining the arguments presented by both parties and the Tribunal's reasoning for each decision.