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2019 (5) TMI 1047 - Tri - Insolvency and BankruptcyInitiation of Corporate Insolvency Resolution Process (CIRP) - Corporate Debtor - Default in repayment of amount - proposal for restructuring of financial assistance availed by the Corporate Debtor on 30.12.2014 - HELD THAT - On 13.04.2017, the Financial Creditor cancelled the restructuring arrangement since the Corporate Debtor has continuously defaulted in repayment obligations beyond the allowed cure period. On this ground, the Corporate Debtor cannot claim that restructuring period is still persistent. However, for the purpose of IBC 2016, in the case of Financial Creditor, it has to be proved by them that there is an outstanding debt and default has occurred in payment towards the loan. This has been clearly established by the various agreements among the Financial Creditor, Corporate Debtor and the Guarantors to the Corporate Debtor. The documents enclosed with the petition clearly proved that the outstanding loan is due to the Financial Creditor and there has been a default in servicing of the debt by the Corporate Debtor. This Tribunal hereby admit application and order initiation of Corporate Insolvency Resolution Process against the Corporate Debtor - moratorium declared.
Issues:
Initiation of Corporate Insolvency Resolution Process based on default in repayment by Corporate Debtor. Analysis: The Financial Creditor filed a Company Petition against the Corporate Debtor for defaulting on a substantial amount. The Financial Creditor, an Asset Reconstruction Company, acquired rights from UCO Bank through an assignment agreement. The Corporate Debtor availed credit facilities under the UCO Rent Scheme, with the Financial Creditor holding securities valued at ?26.77 crores. The Corporate Debtor defaulted, leading to the loan being classified as a Non-Performing Asset (NPA) since 2011. The Financial Creditor sent a Demand Notice under the SARFAESI Act, leading to symbolic possession of mortgaged property. The Corporate Debtor claimed a restructured liability, but the Financial Creditor cancelled the restructuring due to continuous defaults. The Financial Creditor established the outstanding debt and default through various agreements. Despite the Corporate Debtor's objections and claims of payments made, the Tribunal found evidence of default and admitted the petition. Mr. Pankaj Shrivastav was appointed as the Interim Resolution Professional (IRP) to manage the Corporate Debtor's affairs. A moratorium was declared, prohibiting legal actions against the Corporate Debtor and preserving its assets. The IRP was directed to comply with the provisions of the Insolvency and Bankruptcy Code, protect the Corporate Debtor's property, and ensure essential services continued. The directors and promoters were instructed to cooperate with the IRP. The Registry was tasked with communicating the order to relevant parties, ensuring compliance with the Code. The details of the appointed Insolvency Resolution Professional were provided for communication and further actions.
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