2020 (3) TMI 1356 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make payment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT - Admittedly, there is a debt which is due and default has occurred in payment thereof. The amount of undisputed debt is more than Rupees One Lac after considering the claim made by the financial creditor to exclude the amount of impugned debt from the claimed amount made against M/s. Avani Projects and Infrastructure Limited in separate CIRP proceedings. The debt also falls in the category of financial debt, hence, no dispute remains as regards the nature thereof. The application is otherwise complete and defect-free - Application admitted - moratorium declared.

Summary

Issues:
1. Application under Section 7 of IBC, 2016 for corporate insolvency resolution process due to default in payment.
2. Dispute over the maintainability of the application as the claim had been included in previous proceedings.
3. Approval of the name of the Interim Resolution Professional (IRP) and declaration of moratorium.

Analysis:
1. The Tribunal received an application under Section 7 of the Insolvency and Bankruptcy Code, 2016 from a financial creditor seeking to initiate corporate insolvency resolution process against a corporate debtor for defaulting on a debt of ?5,64,72,615.80. The creditor argued that the debt was financial in nature and the non-payment constituted a default, making the application valid under the IBC. The Tribunal found that the debt was undisputed and exceeded ?1 Lac, falling under the category of financial debt, thus approving the application for admission.

2. The corporate debtor contested the application's maintainability, claiming that the same debt had been included in a previous insolvency proceeding against a builder. The financial creditor clarified that it was withdrawing the claim from the prior proceedings concerning the debt in question, allowing the current application to proceed. The Tribunal considered both sides' submissions and concluded that the application was admissible as there was an admitted debt exceeding ?1 Lac, warranting the initiation of insolvency resolution proceedings.

3. Upon reviewing the application and the submissions, the Tribunal approved the proposed name of the Interim Resolution Professional (IRP) and declared a moratorium on the corporate debtor. The moratorium prohibited various actions against the debtor, including legal proceedings and asset transfers. The IRP was tasked with making a public announcement, calling for creditor claims, and managing the resolution process. Additionally, the Tribunal directed the financial creditor to pay an advance fee to the IRP, appointed a Resolution Professional, and set a timeline for the Corporate Insolvency Resolution Process (CIRP), with a progress report due on a specified date.

In a separate judgment, the Tribunal dismissed a related application challenging the maintainability of the petition due to overlapping claims in different proceedings, as the financial creditor had withdrawn the claim from the prior case, resolving the dispute over the admissibility of the current application. The Registry was directed to communicate the order to all relevant parties, ensuring compliance with the necessary formalities for issuing a certified copy of the order.