2019 (8) TMI 1491 - Tri - Insolvency and Bankruptcy

Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT - The application on behalf of financial creditor/Applicant under Section 7 of IBC is complete. It further appears that there is default due to non-payment of the debt owed by the corporate debtor, applicant has annexed sufficient evidence to show the default on behalf of the corporate debtor. Further, Corporate Debtor has admitted its liability. Thus application filed U/S 7 of IBC deserves to be admitted. There is default in the payment of the financial debt. Therefore, as per section 7(5)(a) of the code, the present application filed U/s 7 of the I B Code is admitted - Application admitted - moratorium declared.

Summary

Issues:
1. Application under Section 7 of Insolvency and Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process initiation.
2. Existence of financial debt and default by the Corporate Debtor.
3. Appointment of Interim Resolution Professional and declaration of moratorium.

Analysis:

Issue 1: Application under Section 7 of IBC
The Financial Creditor, State Bank of India, filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 against the Corporate Debtor, "M/s. Feeders Electric & Engineering Limited." The petition sought the initiation of Corporate Insolvency Resolution Process due to default on financial debt.

Issue 2: Existence of Financial Debt and Default
The Financial Creditor provided evidence of the financial debt owed by the Corporate Debtor, including the loan facility details, security creation, and default on payments. The Corporate Debtor admitted its liability in response to the application. The Financial Creditor annexed documents such as sanction letters, consortium agreements, and certificates to prove the existence of the debt and default.

Issue 3: Appointment of Interim Resolution Professional and Moratorium
The Tribunal admitted the application under Section 7 of IBC as there was a default in the payment of financial debt. Mr. Ashok Kumar Gulla was appointed as the Interim Resolution Professional (IRP), and a moratorium was declared under sections 13 & 14 of the Code. The moratorium prohibited suits, asset transfers, security enforcement actions, and property recovery against the Corporate Debtor. Essential services supply was ensured during the moratorium period, and compliance with various provisions of the Code was directed.

In conclusion, the Tribunal admitted the application, appointed an IRP, and declared a moratorium to facilitate the Corporate Insolvency Resolution Process. The Directors, Promoters, and related parties were instructed to cooperate with the IRP, and the progress report filing was scheduled for a future date.