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2020 (2) TMI 1653 - Tri - Companies LawMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - Non-Performing Assets - existence of debt and dispute or not - HELD THAT - The loan what ought to have been a secured loan of the banker, has become unsecured loan. And by no means the applicant banker could have recovered the lawful dues. The applicant had registered FIR against the Corporate Debtor and its Directors in respect of the illegal cheating of the Corporate Debtor under Section 120B/420 of Indian Penal Code (IPC) and dated 25th April, 2015, same is pending. The cheques which was paid towards the repayment of the loan, were dishonoured by the respondent's banker with an endorsement funds insufficient . Hence, the applicant bank filed CS No. 00007/2015 before Chief Metropolitan Magistrate at Calcutta against the Corporate Debtor and its Directors, the same is pending on the file of the Hon'ble District Court and another in 13th M.M. Court CC no 418064/2014 the same are pending on the file of the Hon'ble District Courts. The debts and the default are proved beyond reasonable doubt. The application filed by the Financial Creditor under Section 7 of the Insolvency Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process against the Corporate Debtor, M/s. Emerald Mineral Exim Private Limited is hereby admitted - Moratorium declared.
Issues:
1. Application filed for initiation of Corporate Insolvency Resolution Process under Companies Act, 1956 and Insolvency and Bankruptcy Code, 2016. 2. Jurisdiction of the Adjudicating Authority. 3. Loan disbursement and repayment details. 4. Allegations of illegal transfer of property by the Corporate Debtor. 5. Previous legal proceedings against the Corporate Debtor. 6. Admission of the application and appointment of Resolution Professional. Issue 1: Application for Corporate Insolvency Resolution Process The application was filed under Sections 433, 434, and 439 of the Companies Act, 1956, now under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process against the Corporate Debtor, M/s. Emerald Mineral Exim Private Limited. Issue 2: Jurisdiction of the Adjudicating Authority The Adjudicating Authority determined that it had jurisdiction to entertain the application based on the details provided by the applicant regarding the Corporate Debtor's incorporation under the Companies Act, 1956 and its registered office location. Issue 3: Loan Disbursement and Repayment The applicant, a bank, sanctioned a loan of Rs. 1,50,00,000/- to the Corporate Debtor for purchasing a commercial flat. The loan was disbursed, and the last instalment was paid within the limitation period, justifying the application for Corporate Insolvency Resolution Process. Issue 4: Allegations of Illegal Property Transfer The Corporate Debtor, without the bank's knowledge, transferred the property to a third party, enriching themselves and converting the secured loan into an unsecured one. This action was deemed fraudulent and an attempt to evade repayment obligations. Issue 5: Previous Legal Proceedings Previous legal actions, including cases before the Debts Recovery Tribunal and High Courts, were cited to demonstrate the Corporate Debtor's default in loan repayment and attempts by the bank to recover its dues through various legal channels. Issue 6: Admission of Application and Appointment of Resolution Professional After detailed examination of the facts and legal provisions, the Adjudicating Authority admitted the application for Corporate Insolvency Resolution Process. A moratorium was declared, and a Resolution Professional was appointed to manage the process, convene a Committee of Creditors, and oversee the resolution plan. In conclusion, the judgment by the National Company Law Tribunal, Cuttack, involved a thorough analysis of the loan transaction, property transfer, legal proceedings, and the decision to admit the application for Corporate Insolvency Resolution Process against the Corporate Debtor. The detailed order outlined the moratorium, appointment of a Resolution Professional, and further steps to be taken in the resolution process.
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