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2019 (9) TMI 1657 - 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 facts clearly reveals that the Corporate Debtor is liable to make the payment as guarantor but defaulted in making the payment to the Financial Creditors. This Adjudicating Authority, on perusal of the documents filed by the Creditor, is of the view that the Corporate Debtor defaulted in repaying the loan availed and also placed the name of the Insolvency Resolution Professional to act as Interim Resolution Professional and there being no disciplinary proceedings pending against the proposed resolution professional, therefore the Application under sub-section (2) of Section 7 is taken as complete, accordingly this Bench hereby admits this Petition. Petition admitted - moratorium declared.
Issues:
1. Corporate Insolvency Resolution Process sought by State Bank of India against Reliance Communications Infrastructure Limited for default on loan facilities. 2. Analysis of loan facilities sanctioned to Principal Debtors and subsequent modifications. 3. Execution of Corporate Guarantee Deeds by Corporate Debtor in favor of Axis Trustee Services Limited. 4. Invocation of guarantees by Axis Trustee Services Limited and recall of outstanding loans by State Bank of India. 5. Default by Corporate Debtor in repayment, leading to admission of the Petition by the Adjudicating Authority. Issue 1 - Corporate Insolvency Resolution Process (CIRP) Petition: The State Bank of India filed a petition seeking the initiation of the Corporate Insolvency Resolution Process against Reliance Communications Infrastructure Limited (Corporate Debtor) for defaulting on loan facilities provided to the Principal Debtors under the Insolvency and Bankruptcy Code, 2016. The total default amount, including interest, was stated to be Rs. 3730,40,67,023. Issue 2 - Loan Facilities and Modifications: The State Bank of India sanctioned Rupee Term Loans to Reliance Communications Limited and Reliance Telecom Limited, which were subsequently modified. Additional Rupee Loan Facilities were also provided to the Principal Borrowers, and agreements were entered into with various lenders. Modifications and amendments to these agreements were highlighted in the petition. Issue 3 - Corporate Guarantee Deeds: The Corporate Debtor, along with other entities, executed Corporate Guarantee Deeds in favor of Axis Trustee Services Limited, as the security trustee of the lenders, for substantial sums. These deeds outlined the joint and several liability of the Guarantors in case of default by the Principal Debtors. Issue 4 - Invocation of Guarantees and Loan Recall: Axis Trustee Services Limited invoked the guarantees issued by the Corporate Debtor, demanding significant amounts in relation to the outstanding loans of the Principal Debtors. Following this, the State Bank of India recalled the outstanding loans from the Principal Debtors, indicating the default situation. Issue 5 - Default and Admission of Petition: The Corporate Debtor failed to make the required payments as a guarantor, leading to the Adjudicating Authority concluding that the Corporate Debtor was in default of loan repayment obligations. Consequently, the Adjudicating Authority admitted the Petition and appointed an Interim Resolution Professional to oversee the CIRP process, imposing a moratorium on various actions against the Corporate Debtor. This detailed analysis of the judgment outlines the sequence of events, legal implications, and the decision reached by the Adjudicating Authority in admitting the CIRP Petition against the Corporate Debtor.
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