2018 (1) TMI 1696 - 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 - By the admission of the corporate debtor, it is undisputed that corporate debtor has taken various financial credit facilities from the applicant-financial creditor and has withdrawn money from the financial creditor. By certified copy of the statement of account, Annexure 74, clearly shows that up to 30/9/2017 total amount of Rs.975,27,33,040.53 was due from the corporate debtor. Applicant/financial creditor has also filed Reserve Bank of India s willful defaulter s list annexed with the application as Annexure 77 - Corporate debtor has not raised any objection regarding default amount i.e. Rs.975,27,33,040.53. In spite of recalling the loan, the corporate debtor has failed to make payment and thereby committed default. Petitioner has filed this application in the proper format as prescribed in I B Code and Adjudicating Authority Rules which is complete. The petition filed by the financial creditor under Sec.7 of the Insolvency Bankruptcy Code, 2016 is hereby admitted for initiating the Corporate Resolution Process and declare a moratorium and public announcement as stated in Sec.13 of the IBC, 2016.

Summary

Issues Involved:
1. Application under Sec.7 of the Insolvency and Bankruptcy Code, 2016 for initiating corporate insolvency process against the corporate debtor, Coastal Projects Ltd.
2. Admittance of the petition by the financial creditor under Sec.7 of the Insolvency & Bankruptcy Code, 2016.
3. Declaration of moratorium and public announcement as per Sec.13 and Sec.14 of the IBC, 2016.
4. Appointment of Interim Resolution Professional (IRP) and convening a meeting of the Committee of Creditors for evolving a resolution plan.

Issue 1: Application under Sec.7 of the Insolvency and Bankruptcy Code, 2016
The petitioner filed an application under Sec.7 of the I&B Code, 2016, seeking to initiate the corporate insolvency process against Coastal Projects Ltd. The petitioner alleged a default in payment amounting to Rs.975,27,33,040.53 by the corporate debtor. The petitioner provided detailed documentation, including agreements, statements of accounts, and reports from relevant authorities to substantiate the default claim.

Issue 2: Admittance of the petition by the financial creditor under Sec.7 of the Insolvency & Bankruptcy Code, 2016
After considering the arguments and evidence presented by both parties, the Tribunal admitted the petition filed by the financial creditor under Sec.7 of the I&B Code, 2016. The Tribunal found that the application was complete and in accordance with the prescribed format under the I&B Code. The corporate debtor did not dispute the default amount, further strengthening the case for admission of the petition.

Issue 3: Declaration of moratorium and public announcement
The Tribunal, upon admitting the petition, declared a moratorium and ordered a public announcement in accordance with Sec.13 and Sec.14 of the IBC, 2016. The moratorium prohibits various actions against the corporate debtor, including the institution of suits, transferring assets, and enforcing security interests. Essential supplies to the debtor are protected during this period, and certain transactions may be exempted as notified by the Central Government.

Issue 4: Appointment of Interim Resolution Professional (IRP)
Mr. Ravi Sankar Devarakonda was appointed as the Interim Resolution Professional (IRP) to manage the insolvency resolution process. The IRP's responsibilities include ascertaining creditor details, convening a Committee of Creditors meeting, and submitting a resolution plan. The Tribunal directed the IRP to convene the creditors' meeting and submit the resolution plan for further proceedings.

In conclusion, the Tribunal admitted the petition under Sec.7 of the I&B Code, declared a moratorium, and appointed an IRP to oversee the corporate insolvency resolution process. The detailed analysis of the issues involved in the judgment reflects a thorough consideration of the legal and factual aspects of the case, ensuring compliance with the provisions of the Insolvency and Bankruptcy Code, 2016.