2019 (8) TMI 1786 - 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 - On perusing the documents produced on record, it is understood that the Corporate Debtor has defaulted in repayment of debt. The Financial Creditor has made out its case with ample evidences for his claim. The Corporate Debtor has chosen not to challenge this petition by not filing an affidavit in reply. It seems like there is no defence left with the Corporate Debtor with regard to this petition. Therefore, owing to the inability of the Corporate Debtor to pay its dues, this is a fit case to be moved u/s 7 of the I B Code. It is concluded that the Financial Creditor has established that the loan was duly sanctioned and duly disbursed to the Corporate Debtor but there has been default in payment of Debt on the part of the Corporate Debtor - the nature of Debt is a Financial Debt as defined under section 5 (8) of the Code. It has also been established that there is a Default as defined under section 3 (12) of the Code on the part of the Debtor. It is found that the Petitioner has not received the outstanding Debt from the Respondent and that the formalities as prescribed under the Code have been completed by the Petitioner - this Petition deserves Admission . Petition admitted - moratorium declared.

Summary

Issues:
1. Default in repayment of debt by the Corporate Debtor.
2. Establishment of financial debt and default by the Financial Creditor.
3. Admission of the petition under Section 7 of the Insolvency and Bankruptcy Code.
4. Appointment of Interim Resolution Professional and initiation of Insolvency Resolution Process.

Default in Repayment of Debt by the Corporate Debtor:
The Petitioner, a Financial Creditor, filed a petition against the Corporate Debtor for defaulting on a debt of &8377;2,68,88,44,690/- as on 01.04.2019. The debt arose from financial assistance provided by IL&FS to Wind World Wind Farms, which was later assigned to the Financial Creditor. Despite notices and reminders, the Corporate Debtor failed to repay the outstanding amount, leading to the petition under Section 7 of the Insolvency and Bankruptcy Code.

Establishment of Financial Debt and Default by the Financial Creditor:
The Financial Creditor presented evidence of the debt amount and default through bank statements, loan agreements, and guarantees. The loan facilities were secured by movable properties and guarantees from various entities. The Corporate Debtor did not contest the claim or respond to communications, indicating its liability. The Financial Creditor substantiated the claim with financial statements and documents, proving the disbursal of the loan amount and the default in repayment.

Admission of the Petition under Section 7 of the Insolvency and Bankruptcy Code:
After reviewing the submissions and evidence, the Tribunal found that the Financial Creditor had established the financial debt and default by the Corporate Debtor. The nature of the debt fell under the definition of "Financial Debt" as per the Code, and a clear default existed. Consequently, the petition was admitted, and an Interim Resolution Professional was appointed to oversee the insolvency resolution process.

Appointment of Interim Resolution Professional and Initiation of Insolvency Resolution Process:
The Tribunal appointed Mr. Shailen Shah as the Interim Resolution Professional to conduct the Insolvency Resolution Process. The provisions of Moratorium under Section 14 of the Code were enforced, prohibiting legal actions against the Debtor's assets. The Interim Resolution Professional was tasked with making a public announcement, performing duties under the Code, and updating the Tribunal on the progress within 30 days. The Corporate Insolvency Resolution Process commenced from the date of the order, ensuring continuity of essential services to the Corporate Debtor during the process.