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2020 (1) TMI 1615 - Tri - Insolvency and BankruptcyMaintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - Existenc eof debt and dispute or not - HELD THAT - The restructuring proposal vide letter dated 03.02.2017 regarding settlement of its outstanding debt was sent by the Respondent. Subsequently vide letter dated 13.02.2017 the petitioner approved restructuring of debt of the Respondent. The total lability which was determined by way of restructuring was to be paid in four tranches i.e. (i) Rs. 10,00,000/- on the approval, (ii) Rs. 11,00,000/- on 25.03.2017, (iii) Rs. 62,67,085/- on 15.06.2017 and (iv) Rs. 75,86,471/- on 15.09.2017. The instalment which fell due on June 15, 2017 was not cleared within the default period i.e. 30 days as stipulated in clause 10 of the restructuring letter. As a result, restructuring dated 13.02.2017 was revoked by the Petitioner and a letter of revocation was issued to the Corporate Debtor. It is pertinent to note that in any case we are not to determine the amount of unpaid debt (default) and it shall be open for determination by Committee of Creditors. After a reading of Section 7 of the Code along with Rule 4 (2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, we are satisfied that a default has occurred and the application under sub section 2 of Section 7 is complete. The IRP proposed does not have any disciplinary proceedings pending against him. Petition admitted - moratorium declared.
Issues:
1. Application under Section 7 of the Insolvency and Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process. 2. Default in payment by the Corporate Debtor to the Financial Creditor. 3. Discrepancies in the statement of account presented by the Financial Creditor. 4. Compliance with the provisions of the Insolvency and Bankruptcy Code, 2016. Analysis: Issue 1: Application under Section 7 of the Insolvency and Bankruptcy Code, 2016 The Financial Creditor, Edelweiss Asset Reconstruction Company Limited, filed a petition under Section 7 of the Code seeking initiation of Corporate Insolvency Resolution Process against CLC Industries Limited, the Corporate Debtor. The Financial Creditor proposed the name of Mr. Subhash Kumar Kundra as the Interim Resolution Professional, fulfilling the requirements of Rule 9(1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016. Issue 2: Default in payment by the Corporate Debtor to the Financial Creditor The Financial Creditor detailed the financial debt granted to the Corporate Debtor by ICICI Bank Limited, highlighting the default amount as of 15.03.2019 to be Rs. 1,04,39,98,947.78. The Financial Creditor asserted that the Corporate Debtor repeatedly defaulted on repayment schedules, leading to the issuance of various notices to clear the unpaid debt/liability. Issue 3: Discrepancies in the statement of account presented by the Financial Creditor The Respondent raised objections regarding an alleged settlement document, claiming novation of the contract and disputing the liability. However, the Petitioner provided evidence of restructuring approval and subsequent non-compliance by the Corporate Debtor, leading to the revocation of the restructuring agreement. Issue 4: Compliance with the provisions of the Insolvency and Bankruptcy Code, 2016 The Tribunal found that the provisions of Section 7(2) and Section 7(5) of the IBC were duly complied with, referencing a previous judgment for clarification. After thorough examination, the Tribunal admitted the petition, appointed an Interim Resolution Professional, declared a moratorium, and directed the Financial Creditor to deposit funds for the resolution process. Additionally, directions were issued for document submission and information provision by the Ex-Management/Auditors. In conclusion, the Tribunal admitted the petition under Section 7 of the Code, ensuring compliance with legal provisions and initiating the Corporate Insolvency Resolution Process for the Corporate Debtor, CLC Industries Limited.
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