2019 (8) TMI 1657 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - corporate debtor committed default in repayment of facilities granted to the corporate debtor - existence of debt and dispute or not - HELD THAT - The petitioner enclosed the statement of account for the loan wherein it was found that the amount claimed in the petition is as per the statement of account. The statement of account further reveals that there are defaults in payment of dues - On various occasions various opportunities had been given to the corporate debtor to repay its creditors. However, despite these opportunities the corporate debtor failed in making the payments. This Adjudicating Authority, on perusal of the documents filed by the creditor, is of the view that the corporate debtor defaulted in repaying the loan availed and also placed the name of the insolvency resolution professional to act as interim resolution professional and there being no disciplinary proceedings pending against the proposed resolution professional, therefore the application under sub-section (2) of section 7 is taken as complete, accordingly this Bench hereby admits this petition - Petition admitted - moratorium declared.

Issues:
1. Petition seeking corporate insolvency resolution process of a corporate debtor due to default in repayment.
2. Default on non-convertible debentures and term loan facilities by the corporate debtor.
3. Legal proceedings and actions taken by the petitioner against the corporate debtor.
4. Admission of the petition and appointment of an interim resolution professional.

Issue 1 - Petition for Corporate Insolvency Resolution Process:
The petitioner, Bank of India, filed a petition seeking the corporate insolvency resolution process of a corporate debtor, Housing Development and Infrastructure Ltd., based on default committed on December 4, 2018, in repayment of facilities amounting to ?522,29,06,768. The petition was filed under section 7 of the Insolvency and Bankruptcy Code, 2016, alleging default as per the Code and relevant rules.

Issue 2 - Default on Non-Convertible Debentures and Term Loan Facilities:
The petitioner subscribed to non-convertible debentures (NCDs) and extended a term loan facility to the corporate debtor. Various documents were submitted in support of the financial debts, including debenture trust deeds, application forms, letters, certificates, financial contracts, CIBIL report, banker's book entries, and audited financial statements. Despite the security provided, the corporate debtor defaulted on debt servicing, leading to the classification of the account as a non-performing asset (NPA).

Issue 3 - Legal Proceedings and Actions Taken:
The petitioner made several attempts to recover the dues, including issuing notices and reminders. The corporate debtor failed to repay the outstanding amount, leading to the initiation of legal proceedings. The corporate debtor proposed a one-time settlement, which was accepted, but subsequently failed to honor the settlement terms. Post-dated cheques issued by the corporate debtor were dishonored due to insufficient funds. During court proceedings, the corporate debtor admitted default, leading to the admission of the petition for insolvency resolution.

Issue 4 - Admission of the Petition and Appointment of Interim Resolution Professional:
After reviewing the documents and evidence submitted by the petitioner, the Adjudicating Authority found merit in the petition and admitted it. The Authority appointed an interim resolution professional to oversee the corporate insolvency resolution process. The order included provisions prohibiting legal actions against the corporate debtor, ensuring the supply of essential goods and services, and appointing the interim resolution professional to carry out duties as per the Insolvency and Bankruptcy Code.

In conclusion, the judgment granted the petition for corporate insolvency resolution process based on the default committed by the corporate debtor, leading to the appointment of an interim resolution professional to manage the resolution process effectively.

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