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2018 (8) TMI 1971 - 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 - This petition is filed by the Authorized Representative of Bank. It is under Section 7 of the 1B Code hence there is only to verify whether there is debt and its default being committed by the Corporate Debtor. The Financial Creditor produce on record copy of term loan agreement, copy of deed of mortgage of immovable property held by the Promoters of the Corporate Debtor the copy of letter of sanction of cash credit facility to the Corporate Debtor. All these documents unequivocally show that the Financial Creditor has granted and disbursed the loan to the Corporate Debtor and at a time of filing of this petition there is default in paying total sum of ₹ 42,40,76,787.43/- inclusive of interest - the Corporate Debtor is unable to pay the dept as above and hence Corporate Insolvency Resolution Process required to be started against them. Application admitted - moratorium declared.
Issues:
1. Default in payment of debts by Corporate Debtor to Financial Creditor leading to the initiation of Corporate Insolvency Resolution Process under Section 7 of the Insolvency and Bankruptcy Code, 2016. Analysis: The Financial Creditor filed a petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 against the Corporate Debtor for defaulting on debts amounting to &8377; 42,40,76,787.43. The Financial Creditor had granted a term loan and cash credit facility to the Corporate Debtor on various dates from 14.01.2011 to 12.02.2013. Despite being bound by the terms of the loan agreement, the Corporate Debtor failed to repay the installments in time, leading to a breach of the agreement. Subsequently, a notice was issued under Section 13(2) of the SARFAESI Act, 2002, followed by recovery proceedings initiated by the Bank. The Corporate Debtor failed to appear, indicating their inability to clear the debt, prompting the petition for Corporate Insolvency Resolution Process. The Tribunal verified the debt and default as per Section 7 of the Insolvency and Bankruptcy Code, 2016. The Financial Creditor provided evidence, including the term loan agreement, deed of mortgage, and letter of sanction of cash credit facility, demonstrating the grant and disbursement of the loan to the Corporate Debtor. The total default amount of &8377; 42,40,76,787.43, inclusive of interest, remained uncontested as the Corporate Debtor did not participate in the proceedings. The Tribunal accepted the Financial Creditor's claim of default, concluding that the Corporate Debtor was unable to pay the debt, necessitating the initiation of Corporate Insolvency Resolution Process. The Tribunal admitted the application filed by the Financial Creditor under Section 7 of the Insolvency and Bankruptcy Code, 2016, initiating the Corporate Insolvency Resolution Process against the Corporate Debtor. A moratorium was declared as per Section 14 of the Code, prohibiting various actions against the Corporate Debtor, including legal proceedings, asset transfers, and recovery actions. The Interim Resolution Professional was appointed to ascertain creditors' particulars, convene a Committee of Creditors meeting, and finalize a resolution plan within the stipulated timeframe. The order of moratorium would remain in effect until the completion of the Corporate Insolvency Resolution Process, subject to certain conditions outlined in the judgment. The Tribunal directed necessary communications and actions to be taken by relevant parties and professionals involved in the resolution process.
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