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2019 (9) TMI 1377 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT - The CD has defaulted in making repayment of loan/CC to the petitioner-bank and the date of default is January 5, 2014. The statement of accounts and the CIBIL reports submitted by the applicant-bank confirm the default committed by the corporate debtor - The petitioner-bank has filed the petition within the period of limitation, as the date of mortgage of the property is November 18, 2010, the SARFAESI proceeding initiated in 2014, the Debts Recovery Tribunal proceedings started in 2017, one-time settlement (OTS) revised offer (from ₹ 12 crores to ₹ 14.56 crores) letter dated June 1, 2016 was submitted by the corporate debtor to the applicant-bank and the credits have come into the loan accounts on March 31, 2017. The present IB petition is filed by duly authorised official of the petitioner-bank in a prescribed format under section 7 of the I and B Code annexing copies of loan documents confirming the existence of debt default and proposed a name of resolution professional to act as an interim resolution professional (IRP). This Adjudicating Authority is satisfied that,- (a) the corporate debtor availed of the loan/cash credit from the petitioner ; (b) existence of debt above rupees one lakh ; (c) debt is due ; (d) default has occurred on November 5, 2014 ; (e) the petition had been filed within the limitation period ; (f) copy of the application filed before the Tribunal has been sent to the corporate debtor and the application filed by the petitioner-bank under section 7 of the IBC is found to be complete for the purpose of initiation of the corporate insolvency resolution process against the corporate debtor-company. Hence, the present IB petition is admitted with certain directions/ observations - The date of admission of this petition is September 20, 2019.
Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) 2. Existence and default of debt 3. Limitation period for filing the application 4. Pendency of SARFAESI proceedings 5. Appointment of Interim Resolution Professional (IRP) 6. Declaration of moratorium 7. Admissibility of the petition Issue-wise Detailed Analysis: 1. Initiation of Corporate Insolvency Resolution Process (CIRP): The financial creditor, Bank of India, filed an application under section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of CIRP against the corporate debtor, Radheshyam Agro Products P. Ltd., for default in repayment of loans. The application was filed by a duly authorized officer of the bank. 2. Existence and Default of Debt: The corporate debtor availed various loan facilities from the petitioner-bank, including term loans and cash credit, which were subsequently enhanced. The corporate debtor defaulted on repayment, with the date of default being November 5, 2014. The petitioner-bank submitted statements of accounts and CIBIL reports confirming the default. 3. Limitation Period for Filing the Application: The petitioner-bank filed the application on August 30, 2018. The mortgage was created on October 18, 2010, and the last deposit was made on March 31, 2017. The tribunal found that the application was filed within the limitation period as per the Insolvency and Bankruptcy Code, 2016. 4. Pendency of SARFAESI Proceedings: The tribunal noted that the pendency of SARFAESI proceedings or other disputes does not prevent a financial creditor from triggering the CIRP, as the nature of remedy sought under the IBC is "remedy in rem." 5. Appointment of Interim Resolution Professional (IRP): The petitioner-bank suggested the name of an insolvency professional to be appointed as IRP, who gave his consent in writing. The tribunal appointed Mr. Chandra Prakash Jain as the IRP and directed him to make a public announcement of the moratorium and follow the provisions under sections 13 and 14 of the IBC. 6. Declaration of Moratorium: The tribunal declared a moratorium with effect from the date of the order, prohibiting the institution or continuation of suits, transferring or disposing of assets, foreclosure actions, and recovery of property occupied by the corporate debtor. The supply of essential goods or services to the corporate debtor was not to be terminated during the moratorium period. 7. Admissibility of the Petition: The tribunal found that the corporate debtor availed the loan/cash credit, the existence of debt above rupees one lakh, the debt was due, default occurred on November 5, 2014, the petition was filed within the limitation period, and the application was complete for initiation of CIRP. Hence, the petition was admitted. Separate Judgment by Judicial Member: While concurring with the findings for the admission of the petition, the Judicial Member referenced a previous decision in Satish Kumar Gupta v. Essar Steel (India) Ltd., emphasizing that the tribunal has limited jurisdiction to suggest or recommend to the Committee of Creditors (CoC) but cannot reverse the commercial wisdom of the CoC. The Judicial Member suggested that paragraph 24 of the judgment be considered by the CoC in light of the Supreme Court's decision in K. Sashidhar v. Indian Overseas Bank. Conclusion: The petition under section 7 of the IBC was admitted, initiating the CIRP against the corporate debtor-company, with the appointment of an IRP and declaration of a moratorium. The tribunal directed the petitioner-bank and registry to communicate the order to relevant parties.
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