2018 (6) TMI 1764 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - Financial Creditor has also initiated SARFAESI Proceedings against the Corporate Debtor by issuing Demand Notice - existence of debt and dispute or not - HELD THAT - The loans were recalled and further reassigned to ARCIL vide Assignment Agreement dated 28.03.2014, and in their opinion, the Company has defaulted in repayment of its dues, the details of the principal and interest amount are also recorded in the said para of the Annexure. The Auditors' report along with its annexure is placed at pages 251 to 274 of the typed set filed with the Application. This clearly establishes that the Corporate Debtor has defaulted in making payment to the outstanding debt due to the Financial Creditor - the Counsel has admitted the liability of the Corporate Debtor with regard to the debt claimed. However, the Counsel for the Corporate Debtor did not place any authentic document on record to substantiate her objection. Therefore, the objections raised by the Counsel for the Corporate Debtor stand rejected. This Authority has ascertained the existence of a default on the part of the Corporate Debtor. The Financial Creditor has fulfilled all the requirements of law and has also proposed the name of IRP after obtaining his written consentin Form-2. Therefore, is admitted and the commencement of the Corporate Insolvency Resolution Process is ordered which ordinarily shall get completed within 180 days, reckoning from the day this order is passed. Application admitted - moratorium declared.

Summary

Issues involved: Application under Section 7 of the Insolvency and Bankruptcy Code, 2016 against a Corporate Debtor for outstanding debt.

Analysis:
1. The Financial Creditor filed an Application under Section 7 of the Insolvency and Bankruptcy Code, 2016 against the Corporate Debtor, seeking to initiate the Corporate Insolvency Resolution Process, declare moratorium, and appoint an Interim Resolution Professional (IRP). The Financial Creditor claimed an outstanding amount of ?1,174,383,466 against the Corporate Debtor, who failed to make the payment.

2. The case involved loans sanctioned by Indian Overseas Bank (10B) and Oriental Bank of Commerce (OBC) to the Corporate Debtor, which were later assigned to Asset Reconstruction Company (India) Limited (ARCIL). The Corporate Debtor defaulted on repayments, leading to legal actions by the Financial Creditor. The Debt Recovery Tribunal allowed the Financial Creditor to recover the outstanding amounts from the Corporate Debtor.

3. The Financial Creditor initiated SARFAESI Proceedings against the Corporate Debtor, demanding payment of outstanding dues. The Corporate Debtor objected to the assignment of debts to ARCIL, citing discrepancies in calculations and disputing the amount claimed by the Financial Creditor. However, the objections raised by the Corporate Debtor were rejected by the Authority.

4. The Authority found the existence of a default by the Corporate Debtor, admitted the Application, and ordered the commencement of the Corporate Insolvency Resolution Process. An Interim Resolution Professional was appointed to manage the Corporate Debtor's affairs, and a moratorium was declared to prohibit actions against the Corporate Debtor during the resolution process.

5. The Order directed compliance with various sections of the Insolvency and Bankruptcy Code, including provisions related to the IRP's duties, cooperation from the Corporate Debtor's directors, and communication of the Order to relevant parties. The detailed address and contact information of the appointed IRP were provided for further proceedings.