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2020 (1) TMI 1392 - 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 - time limitation - HELD THAT - It is found, that the Petitioner Bank has submitted the documents duly executed by the Corporate Debtor and Guarantors along with a Certificate under the Banker's Book of Evidence Act, 1891, in support of their IB Petition for initiation of C.I.R.P. - The Term Loan was sanctioned and released by the Petitioner Bank and the same was availed by the Corporate Debtor, SRK Devbuild Private Limited. The CD has defaulted in making repayment of the Term Loan to the Petitioner Bank and the date of default is 31/05/2016. The Statement of accounts submitted by the applicant Bank confirm the default committed by the Corporate Debtor - The last payment to the loan was came on 31/05/2017. The OTS proposal was executed on 26/05/2017 but the same was not honoured by the Corporate Debtor - The Petitioner Bank has filed the petition on 02/08/2018 which is within the period of limitation. Considering the material, papers filed by the Petitioner and the facts mentioned, this Adjudicating Authority is satisfied that, (a) The Corporate Debtor availed loan facilities from the Financial Creditor (AU SMALL FINANCE BANK LIMITED). (b) Existence of debt is above Rs. One Lac; (c) Debt is due; (d) Default has occurred on 31/05/2016 (e) Petition has 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 IBC is found to be complete for the purpose of initiation of Corporate Insolvency Resolution Process against the Corporate Debtor. The present IB Petition is admitted.
Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) 2. Default in repayment of Term Loan 3. Objections by the Corporate Debtor 4. Admissibility of the Petition 5. Appointment of Interim Resolution Professional (IRP) 6. Declaration of Moratorium Detailed Analysis: 1. Initiation of Corporate Insolvency Resolution Process (CIRP): The Financial Creditor, AU Small Finance Bank Limited, filed the I.B. Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking the initiation of CIRP against SRK Devbuild Private Limited due to default in repayment of a Term Loan facility. 2. Default in Repayment of Term Loan: The Petitioner Bank sanctioned a Term Loan of ?4,00,00,000 to the Corporate Debtor on 09.02.2015, with repayment terms involving a moratorium period of 12 months followed by 84 EMIs. The Corporate Debtor created a Security Interest by depositing title deeds of immovable property. However, the Corporate Debtor defaulted, resulting in the loan account being classified as NPA on 31.05.2016. Despite a Demand Notice issued under Section 13(2) of the SARFAESI Act and subsequent settlement attempts, the Corporate Debtor failed to repay the outstanding amount of ?3,34,96,299 as on 25.07.2018. 3. Objections by the Corporate Debtor: The Corporate Debtor raised several objections: - The application was not in the prescribed form. - The Statement of Account was not properly certified. - The Corporate Debtor was not the sole borrower; co-borrowers were not included in the action. - No security document was executed in favor of the Petitioner. - The Corporate Debtor is a going concern with significant assets. - The petition lacked complete facts and was based on incomplete documents. - The loan agreement was not sufficiently stamped or registered. - The claim was disputed and allegedly barred by limitation. 4. Admissibility of the Petition: The Tribunal found that the Petitioner Bank submitted all necessary documents, including the loan agreement, sanction letter, demand notice, possession notice, terms of settlement, ledger account, and foreclosure statement. The petition was filed within the limitation period, and the Corporate Debtor's default was confirmed by the Statement of Accounts. The Tribunal concluded that the petition met the requirements of Section 7 of the IBC. 5. Appointment of Interim Resolution Professional (IRP): The Tribunal appointed Mr. Ravi Kapoor as the Interim Resolution Professional, directing him to make a public announcement of the moratorium and to proceed as per the IBC provisions. 6. Declaration of Moratorium: The Tribunal declared a moratorium effective from the date of the order, prohibiting: - Institution or continuation of suits or proceedings against the Corporate Debtor. - Transfer, encumbrance, or disposal of the Corporate Debtor's assets. - Actions to foreclose or enforce security interests. - Recovery of property by owners or lessors. The supply of essential goods or services to the Corporate Debtor was to continue uninterrupted during the moratorium. The Tribunal directed the IRP to adhere to the CIRP timeline and perform duties under Sections 17, 18, 20, and 21 of the IBC, with cooperation from the Corporate Debtor's personnel. The Petitioner Bank's claim of ?3,34,96,299 was acknowledged, and the Tribunal emphasized exploring viable resolution plans with competitive interest rates. The Registry was instructed to communicate the order to all relevant parties and update the Corporate Debtor's status on the Registrar of Companies' website. Conclusion: The I.B. Petition filed under Section 7 of the IBC was admitted, initiating the CIRP against SRK Devbuild Private Limited with the appointment of an IRP and declaration of a moratorium. The Tribunal addressed all objections raised by the Corporate Debtor and found the petition to be complete and within the limitation period.
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