2019 (9) TMI 1449 - 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 petitioner has succeed in establishing that the loan of ₹ 20,00,00,000 is given to corporate debtor and that has not been paid by the Corporate Debtor and Corporate debtor has admitted this fact by filing an additional affidavit on 05.09.2019 stating in para 3 that the corporate debtor has no objection if this Adjudicating Authority appoints IRP in the case. Hence, the application filed on behalf of financial creditor/Applicant under Section 7 of IBC is found complete. It further appears that there is default in 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. Therefore application filed U/S 7 of IBC deserves to be admitted. Application admitted - moratorium declared.

Summary

Issues Involved:
1. Maintainability of the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016.
2. Existence of financial debt and default by the corporate debtor.
3. Appointment of Interim Resolution Professional (IRP).
4. Declaration of moratorium.

Detailed Analysis:

1. Maintainability of the Petition:
The petition was filed by Corporation Bank under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Corporate Insolvency Resolution Process (CIRP) against the corporate debtor, M/s. Multiwal Duplex Private Limited. The respondent contested the maintainability on grounds that the application lacked verification of pleadings and concealed facts regarding pari passu charge over the property. However, it was established that the application was duly signed, stamped, and verified by the authorized signatory of the financial creditor, and there was no concealment of facts. The tribunal found the application maintainable as it complied with Section 7 of the IBC and relevant rules.

2. Existence of Financial Debt and Default:
The financial creditor sanctioned a loan of ?20 Crores to the corporate debtor, which was secured by personal guarantees from the directors. The corporate debtor defaulted, and the account was classified as Non-Performing Asset (NPA) on 30.08.2015. The amount claimed as default was ?34,73,29,389.00 as on 22.01.2019. The corporate debtor acknowledged the debt on 22.02.2016, and the petition was filed within the limitation period as per Section 18 of the Limitation Act, 1963. The tribunal reviewed the documents, including the credit sanction letter, guarantee agreement, and acknowledgment of debt, and concluded that there was a financial debt and default by the corporate debtor.

3. Appointment of Interim Resolution Professional (IRP):
The financial creditor proposed Mr. Manish Agarwal as the IRP, and he submitted a declaration affirming his registration and that no disciplinary proceedings were pending against him. The corporate debtor had no objection to the appointment of the IRP. The tribunal, satisfied with the proposal, appointed Mr. Manish Agarwal as the IRP.

4. Declaration of Moratorium:
Upon admission of the application, a moratorium was declared under Sections 13 and 14 of the IBC, prohibiting:
- Institution or continuation of suits or proceedings against the corporate debtor.
- Transfer, encumbrance, or disposal of any assets by the corporate debtor.
- Foreclosure or enforcement of security interest created by the corporate debtor.
- Recovery of property occupied by the corporate debtor.

The IRP was directed to comply with Sections 13(2), 15, 17, and 18 of the Code, and the corporate debtor's management was instructed to cooperate with the IRP as per Section 19.

Conclusion:
The petition filed by the financial creditor was found to be complete and maintainable. The tribunal admitted the application under Section 7 of the IBC, appointed an IRP, and declared a moratorium to facilitate the CIRP. The case was listed for the filing of the progress report on 27.09.2019.