2019 (7) TMI 1625 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT - The documentary evidence which is placed on the case file is sufficient to ascertain the existence of a default on the part of the Corporate Debtor. The Financial Creditor has fulfilled all the requirements of law including the name of the Resolution Professional for appointment as the IRP. Hence, the Application stands admitted. The commencement of the Corporate Insolvency Resolution Process is ordered which ordinarily shall get completed within 180 days, reckoning from the day this order is passed. Application admitted - moratorium declared.

Summary

Issues:
Adjudication of insolvency application under Section 7 of the Insolvency & Bankruptcy Code, 2016 against a corporate debtor.

Analysis:
The Financial Creditor filed an application seeking initiation of Corporate Insolvency Resolution Process against the Corporate Debtor, claiming an outstanding amount of ?41,64,822/- as on 31.10.2018. The claim was supported by documents reflecting transactions and promissory notes executed by the Corporate Debtor. The Financial Creditor sent a legal notice to the Corporate Debtor, demanding payment. The Financial Statement of the Corporate Debtor also acknowledged the borrowing from the Financial Creditor. The Corporate Debtor disputed the claim, alleging lack of authorization for promissory notes and absence of board resolution for the loans. However, the Tribunal found the documentary evidence sufficient to establish default by the Corporate Debtor and admitted the application.

The Tribunal appointed an Interim Resolution Professional (IRP) to manage the Corporate Debtor's affairs and declared a moratorium to prohibit legal actions against the Corporate Debtor. The IRP was directed to take charge immediately and initiate the Corporate Insolvency Resolution Process. The Directors and associated persons of the Corporate Debtor were instructed to cooperate with the IRP. Essential goods or services supply to the Corporate Debtor were protected during the moratorium. The Financial Creditor, Registry, and parties were directed to comply with the orders, and the address details of the appointed IRP were provided for communication. The Order was pronounced in the presence of the parties' counsels.