2019 (4) TMI 1608 - Tri - Insolvency and Bankruptcy

Corporate insolvency process - outstanding debt - existence of default committed by the Corporate Debtor - HELD THAT - Looking at the documents filed by the Financial Creditor, we are of the view that the Financial Creditor filed all the requisite documents proving the existence of debt as well as existence of default committed by the Corporate Debtor, therefore, we hereby hold that this Company Petition is fit for admission, whereby, since the Financial Creditor has placed the consent letter of the Resolution Professional. Moratorium is hereby declared prohibiting accordingly.

Summary

Issues:
1. Default in repayment by the Corporate Debtor leading to initiation of Corporate Insolvency Resolution Process under Section 7 of the Insolvency and Bankruptcy Code, 2016.
2. Existence of debt and default by the Corporate Debtor as per the loan agreement.
3. Admissibility of the Company Petition filed by the Financial Creditor.
4. Appointment of an Interim Resolution Professional and declaration of moratorium.

Analysis:
1. The Financial Creditor filed a Company Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, citing a default by the Corporate Debtor in repaying an amount of ?16,20,91,564 as on 03.08.2018, seeking initiation of Corporate Insolvency Resolution Process. The debt arose from a loan agreement for a construction project named "P Dot G Flora," with the Corporate Debtor failing to repay the outstanding balance, leading to the petition.

2. The Financial Creditor provided evidence of the debt and default committed by the Corporate Debtor, including a loan agreement, bank statements showing partial payment, and affidavits reflecting liability. The Corporate Debtor failed to repay the remaining balance, resulting in the account becoming irregular, justifying the initiation of insolvency proceedings.

3. The Tribunal, after reviewing the documents filed by the Financial Creditor, found them sufficient to prove the existence of debt and default by the Corporate Debtor. Consequently, the Tribunal held the Company Petition fit for admission, leading to the declaration of moratorium and appointment of an Interim Resolution Professional to oversee the insolvency resolution process.

4. The Tribunal issued directions for the moratorium, ensuring the protection of assets and prohibiting certain actions against the Corporate Debtor during the resolution process. The appointment of the Interim Resolution Professional was made to facilitate the resolution proceedings in compliance with the Insolvency and Bankruptcy Code, with specific instructions regarding the professional's responsibilities and fee structure.

This comprehensive analysis outlines the key issues addressed in the judgment, focusing on the default, admissibility of the petition, and the procedural steps taken to initiate the Corporate Insolvency Resolution Process.