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2018 (11) TMI 1014 - Tri - Insolvency and BankruptcyCorporate Insolvency Resolution Process - adherence to form and manner of the application to be the one as prescribed - Held that - It is evident from the record that the application has been filed on the Performa prescribed under Rule 4(2) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 read with Section 7 of IBC. We are satisfied that a default has occurred and the application under sub section 2 of Section 7 is complete. The name of the IRP has been proposed and there are no disciplinary proceedings pending against the proposed Interim Resolution Professional. As a sequel to the above discussion, this petition is admitted and Mr. Pawan Kumar Garg with the address 25 - A, J - Pocket, Sheikh Sarai - II, New Delhi-110017 and Mobile No. 9873981462 and having registration number IBBI/IPA-001/IP-P00608/2017-18/11069 is appointed as the Interim Resolution Professional. In pursuance of Section 13(2) of the Code, we direct that Interim Insolvency Resolution Professional shall immediately make public announcement with regard to admission of this application under Section 7 of the Code.
Issues Involved:
1. Whether the petitioners qualify as 'financial creditors' under Section 7 of the Insolvency and Bankruptcy Code, 2016 (the Code). 2. Whether there is a default in the payment of the financial debt by the corporate debtor. 3. Whether the application for initiating Corporate Insolvency Resolution Process (CIRP) is complete and meets the requirements under the Code and associated rules. 4. Whether the proposed Interim Resolution Professional (IRP) meets the criteria set by the Code. Issue-wise Detailed Analysis: 1. Qualification as 'Financial Creditors': The petitioners, who are real estate buyers, claimed to be 'financial creditors' under Section 7 of the Code. They had applied for the allotment of a residential plot in the "IREO HAMLET" project by the corporate debtor and paid a significant amount as earnest money and further installments. The petitioners argued that the corporate debtor defaulted on refunding the amount paid, thus establishing their status as financial creditors. 2. Default in Payment of Financial Debt: The petitioners alleged that the corporate debtor defaulted on a sum of ?58,75,100, which includes the principal amount and interest. The corporate debtor had issued post-dated cheques as part of a settlement agreement, which were dishonored due to insufficient funds. The last cheque dated 11.05.2018 marked the date of default. The petitioners had previously obtained a favorable order from the State Consumer Disputes Redressal Commission for a refund and compensation, which the corporate debtor failed to comply with. 3. Completeness of Application for CIRP: The tribunal examined whether the application met the requirements under Section 7(2) and Section 7(5) of the Code. The application was found to be complete, with all necessary details of the financial debt and default provided in Part-IV of the petition. The financial creditor had also proposed the name of Mr. Pawan Kumar Garg as the IRP, who had no pending disciplinary proceedings against him. 4. Criteria for Proposed IRP: The proposed IRP, Mr. Pawan Kumar Garg, had filed his written communication as per Rule 9 of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016, declaring no pending disciplinary proceedings. The tribunal found that the proposed IRP met all the criteria set by the Code. Conclusion: The tribunal concluded that all conditions under Section 7 of the Code for initiating CIRP were satisfied: - A default had occurred. - The application was complete. - No disciplinary proceedings were pending against the proposed IRP. As a result, the petition was admitted. Mr. Pawan Kumar Garg was appointed as the Interim Resolution Professional. The tribunal directed the IRP to make a public announcement of the CIRP and declared a moratorium as per Section 14 of the Code, which includes prohibitions on suits, asset transfers, and recovery actions against the corporate debtor. The IRP was instructed to perform his duties with integrity and ensure the cooperation of the corporate debtor's personnel. The office was directed to communicate the order to all relevant parties and update the Master Data with the Registrar of Companies.
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