2021 (2) TMI 1188 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - Existence of debt and dispute or not - HELD THAT - Admittedly there is an outstanding debt which is more than Rs. 1 lakh being the minimum at the relevant time for filing of an application under Section 7 of IBC 2016. The debt is due and payable to the Financial Creditor by the Corporate Debtor has committed default in repayment. The first acknowledgement of debt is well within the original period of limitation from the date of default. Second confirmation/acknowledgement also extends the limitation for filing this application. Thus the debt is not barred by limitation. The application is otherwise complete and compliances with the requirements of IBC 2016 r.w. IBBI (Insolvency Resolution Process for Corporate Persons) Regulations 2016 - Application admitted - moratorium declared.

Summary

Issues:
- Application filed under Section 7 of Insolvency and Bankruptcy Code, 2016 to initiate Corporate Insolvency Resolution Process against the Corporate Debtor.
- Default amount claimed at Rs. 8,44,15,488.00 including interest.
- Failure of Corporate Debtor to make payment of outstanding dues.
- Consideration of application validity, debt acknowledgment, and appointment of Interim Resolution Professional (IRP).
- Compliance with IBC, 2016 and IBBI Regulations.
- Admittance of Corporate Debtor in Corporate Insolvency Resolution Process.
- Appointment of IRP and imposition of Moratorium under Section 14 of the Code.
- Prohibition of suits or proceedings against the Corporate Debtor during the Moratorium.
- Continuation of essential goods or services supply to the Corporate Debtor.
- Duties and obligations of the IRP.
- Payment of fees and expenses to the IRP.
- Communication of order to relevant parties and commencement of CIRP.

Analysis:
1. The judgment pertains to an application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 by a Financial Creditor against the Corporate Debtor, M/s. Mean Impex Pvt. Limited, claiming a default amount of Rs. 8,44,15,488.00. The Financial Creditor provided various loan facilities to the Corporate Debtor, who failed to make payments, leading to the initiation of the Corporate Insolvency Resolution Process (CIRP).

2. The Adjudicating Authority proceeded ex-parte against the Corporate Debtor as they failed to respond after being served notice. The Financial Creditor's counsel argued that the application was not time-barred, as the debt acknowledgment documents were within the limitation period. The counsel also highlighted the proposal of an Interim Resolution Professional (IRP) with no pending disciplinary actions against them.

3. The Tribunal considered the submissions and found the application compliant with IBC, 2016 and IBBI Regulations. It acknowledged the outstanding debt exceeding the minimum threshold for filing under Section 7, the debt acknowledgment, and the proposed IRP's suitability. Consequently, the Tribunal admitted the application, initiating the Corporate Insolvency Resolution Process against the Corporate Debtor.

4. The judgment further appointed the proposed IRP, imposed a Moratorium under Section 14 of the Code, and prohibited legal actions against the Corporate Debtor during the Moratorium period. It emphasized the continuation of essential services to the Corporate Debtor and outlined the duties and obligations of the IRP in managing the Corporate Debtor's operations.

5. Additionally, the Tribunal directed the Financial Creditor to pay fees and expenses to the IRP, communicated the order to relevant parties, and officially commenced the Corporate Insolvency Resolution Process. The judgment ensured comprehensive compliance with legal procedures and safeguards under the Insolvency and Bankruptcy framework, securing the interests of all involved parties.