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2019 (9) TMI 1400 - 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 - On perusal of the documents submitted by the financial creditor, it is clear that debt amounting to around ₹70 crore is due and payable by the Corporate Debtor to the Applicant as on the date of filing of this application. The outstanding debt is even admitted by the Corporate Debtor in its affidavit in reply by stating that the amount of debt outstanding is ₹70 crore. The outstanding amount that is admittedly in default is more than ₹1,00,000/- - The application filed by the financial creditor is on proper form 1, as prescribed under the Adjudicating Authority Rules and application is complete. The Application under sub-section (2) of Section 7 of I B Code, 2016 filed by the financial creditor for initiation of CIRP in prescribed Form No1, as per the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 is complete. The existing financial debt of more than rupees one lakh against the corporate debtor and its default is also proved. Accordingly, the petition filed under section 7 of the Insolvency and Bankruptcy Code for initiation of corporate insolvency resolution process against the corporate debtor deserves to be admitted. Petition admitted.
Issues:
1. Application under section 7 of Insolvency & Bankruptcy Code, 2016 (I&B Code) for initiating Corporate Insolvency Resolution Process (CIRP) against Corporate Debtor. 2. Admissibility of the application based on outstanding debt and default. 3. Appointment of Interim Resolution Professional. 4. Declaration of moratorium under section 14 of I&B Code. Analysis: 1. The application (CP 990/2019) was filed by a Financial Creditor, Jammu and Kashmir Bank Limited, against Pan India Utilities Distribution Company Limited, seeking initiation of CIRP under section 7 of I&B Code. The Petition was filed on 11.03.2019 by the Branch Head of the bank, authorized to do so, based on a Line of Credit Facility of ?200 crore granted to the Corporate Debtor, with default amounting to ?70,38,74,189.51 as of 07.03.2019. 2. The Financial Creditor provided evidence of default, including demand notices and acknowledgment of debt by the Corporate Debtor. The Corporate Debtor admitted to taking a loan and the outstanding amount, further confirming the default. The debt amounting to around ?70 crore was due and payable, with the Corporate Debtor failing to repay, justifying the initiation of CIRP. 3. The Financial Creditor proposed the appointment of Mr. Hemant J Mehta as the Interim Resolution Professional, a registered Insolvency Resolution Professional, for conducting the functions under the I&B Code. The proposed IRP declared no pending disciplinary proceedings against him, ensuring his suitability for the role. 4. The Tribunal, comprising Hon'ble Members, admitted the petition under section 7 of I&B Code, initiating the corporate insolvency resolution process against the Corporate Debtor. A moratorium was declared under section 14 of I&B Code, prohibiting various actions against the Corporate Debtor, ensuring the continuity of essential goods or services, and specifying the effective period of the moratorium until the completion of the resolution process or liquidation. The appointment of the Interim Resolution Professional was confirmed, with directions for compliance and communication to all relevant parties. This detailed analysis of the judgment provides a comprehensive understanding of the legal proceedings, evidentiary submissions, and consequential orders issued by the Tribunal in response to the application for initiating CIRP against the Corporate Debtor.
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