2019 (5) TMI 1141 - Tri - Insolvency and Bankruptcy

Initiation of Corporate Insolvency Resolution Process (CIRP) against the Debtor - Section 7 of the Insolvency Bankruptcy Code, 2016 - HELD THAT - For there being no defence from the Debtor side, since this Bench having found the material furnishing the existence of debt and default against the Debtor, we are of the view that this petition is fit for admission, therefore, for the Creditor have filed Consent Form of the proposed Resolution Professional, we admit this petition - Moratorium declared.

Summary

Issues:
1. Default in loan repayment by the Corporate Debtor leading to the initiation of Corporate Insolvency Resolution Process (CIRP) under Section 7 of the Insolvency & Bankruptcy Code, 2016.

Analysis:
The Financial Creditor filed a Company Petition under Section 7 of the Insolvency & Bankruptcy Code, 2016, stating that the Corporate Debtor defaulted in repaying a loan amount of ?7,90,71,611 as of 06.03.2018, seeking initiation of CIRP against the Debtor. The Creditor detailed the loan agreement dated 08.10.2014, where the Debtor received funds from three separate accounts at an interest rate of 14% per annum. Various documents, including the Loan Agreement, Memorandum of Title Deeds, Pledge Agreement, and financial records, were submitted to support the claim of default. The Debtor failed to repay the principal and interest amounts since 31.05.2016, leading to the initiation of the CIRP on 24.04.2018. The Creditor provided evidence of the charge created on assets, balance sheets, notes, and statement of accounts to substantiate the claim.

Decision:
The Tribunal found no defense from the Debtor's side and acknowledged the evidence presented by the Creditor, establishing the existence of debt and default. As a result, the petition was deemed fit for admission. The Tribunal declared a moratorium, prohibiting various actions against the Corporate Debtor, appointed an Interim Resolution Professional, and directed the public announcement of the insolvency resolution process. The order of moratorium was effective from 20.03.2019 until the completion of the CIRP or approval of a resolution plan. The Registry was instructed to communicate the order to the parties involved promptly.

This detailed analysis outlines the legal proceedings, evidence presented, and the Tribunal's decision regarding the default in loan repayment by the Corporate Debtor, leading to the initiation of the Corporate Insolvency Resolution Process under the Insolvency & Bankruptcy Code, 2016.