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2019 (11) TMI 1727 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed ti make repayment of its dues - Financial creditors - existence of debt and dispute or not - HELD THAT - The Corporate Debtor in its reply filed has admitted that the project could not be completed for reasons beyond control. They confirm the cancellation of the unit and their undertaking to refund the principal amount. Letter to this extent is also on record. However on account of financial constraints, they are unable to do so. The AR of the company who was present in Court has also confirmed this submission. It is an admitted fact that the Corporate Debtor has defaulted in repaying the debt due to financial creditor on account of its financial crises. The prayer of the Financial Creditor merits consideration - Petition admitted - moratorium declared.
Issues Involved:
Initiation of Corporate Insolvency Resolution under Section 7 of the Insolvency & Bankruptcy Code, 2016 based on financial inability to liquidate debt. Analysis: The petitioner, a Financial Creditor, sought the initiation of Corporate Insolvency Resolution against the Respondent/Corporate Debtor under Section 7 of the Insolvency & Bankruptcy Code, 2016 due to the latter's inability to liquidate its debt. The Financial Creditor, engaged in real estate development, had purchased a booking from individuals who had initially booked a unit in a housing project. The Corporate Debtor had transferred the booking to the petitioner but failed to complete the construction, leading the petitioner to cancel the booking and request a refund. The Corporate Debtor admitted the project's non-completion due to reasons beyond its control and its inability to refund the principal amount due to financial constraints. The Corporate Debtor had defaulted in repaying the debt, acknowledging its financial crisis. The Tribunal found the Financial Creditor's petition admissible based on the facts and documents presented. Consequently, a moratorium under Section 14 of the Code was imposed immediately, halting various actions against the Corporate Debtor, including legal proceedings, asset transfers, and property recovery. Essential goods or services supply to the Corporate Debtor was to continue uninterrupted during the moratorium period. The order of moratorium would remain in effect until the completion of the corporate insolvency resolution process, ceasing upon approval of a resolution plan or liquidation order by the Adjudicating Authority. The Financial Creditor nominated Mr. Bhim Sain Goyal as the Insolvency Resolution Professional (IRP) in the case. The IRP was directed to undertake necessary actions as mandated by the Code, specifically under Sections 15, 17, 18, 20, and 21, and submit a report as per statutory requirements. The order was to be communicated to both parties and the IRP, with further consideration scheduled for January 6, 2020.
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