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2019 (3) TMI 1938 - Tri - Insolvency and BankruptcyMaintainability 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 - The Corporate Debtor defaulted on the coupon payments payable by the calendar quarter ending 30.06.2018 which resulted into default in terms of the Debenture Trust Deed - As this being resulted into default, this Co-Applicant as a Debenture Trustee on 07.08.2018 issued notice to the Corporate Debtor quantifying the default committed by the Corporate Debtor and demanding the Corporate Debtor to forthwith make coupon payments due to the Financial Creditor. Since no payment has come from the Corporate Debtor by calendar quarter ending 30.06.2018, initially the Co-Applicant as the debenture Trustee issued a notice on 07.08.2018 to the corporate debtor calling upon the debtor to clear the dues, as no payment has come, these applicants have filed this application making a claim of ₹ 8,51,35,527.41 for initiation of CIRP. As against the claim made by the Financial Creditor, the counsel appeared on behalf of the Corporate Debtor has not raised any objection for initiation of Corporate Insolvency Resolution Process because the Corporate Debtor is not in a position to pay the amount as stated in the Debenture Trust Deed executed by the Corporate Debtor, this Bench, having gone through the documents and being satisfied of the material disclosing existence of debt and default, hereby admits this Company Application. Petition admitted - moratorium declared.
Issues:
Initiation of Corporate Insolvency Resolution Process under Section 7 of the Insolvency & Bankruptcy Code, 2016 based on default in repayment by the Corporate Debtor. Analysis: The Company Petition was filed by the Financial Creditor seeking initiation of Corporate Insolvency Resolution Process against the Corporate Debtor due to default in repaying an amount of ?8,51,35,527 (including taxes) as on 13.09.2018. The application was filed by two applicants, the Financial Creditor and the Co-Applicant/Debenture Trustee, who was appointed as Debenture Trustee under an agreement with the Corporate Debtor. The Corporate Debtor had issued debentures to the Financial Creditor, and upon default in coupon payments, the Co-Applicant demanded the dues, leading to the initiation of the CIRP. The Corporate Debtor did not raise objections, and the Tribunal admitted the Company Application appointing an Interim Resolution Professional. The Tribunal declared a moratorium prohibiting various actions against the Corporate Debtor, including institution or continuation of suits, transferring assets, enforcing security interests, and recovering property. Essential goods or services supply to the Corporate Debtor was not to be terminated during the moratorium period. Certain transactions exempted from Section 14 of the IBC were specified. The moratorium was effective from 27.03.2019 until the completion of the CIRP or approval of a resolution plan or liquidation order. The public announcement of the CIRP was mandated, and an Interim Resolution Professional was appointed to carry out the necessary functions in compliance with IBBI regulations. In conclusion, the Tribunal admitted the Petition, directed the Registry to communicate the order to relevant parties, and issued detailed directions regarding the moratorium, appointment of an Interim Resolution Professional, and compliance with IBBI regulations. The judgment focused on the default in repayment by the Corporate Debtor, leading to the initiation of the CIRP and the subsequent legal actions and directions to be followed during the resolution process.
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