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2019 (7) TMI 786 - Tri - Insolvency and BankruptcyAdmissibility of petition - Initiation of Corporate Insolvency Resolution Process - default in repayment of loans borrowed from various financial creditors - section 10 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - There was sufficient time provided to the Financial Creditors to file their objections if any. However, on 6.3.2019 the counsel on behalf of Kotak Mahindra Bank and Capital First Limited Financial Creditors reported that the they have no objection to admit the petition filed by the Corporate Applicant under Section 10 of Insolvency and Bankruptcy Code, 2016. The current petition is applicable to be admitted - moratorium declared.
Issues:
Initiation of Corporate Insolvency Resolution Process under Section 10 of the Insolvency and Bankruptcy Code, 2016 following default in loan repayment. Analysis: The Petition was filed by Lupin Telepower Private Limited to commence Corporate Insolvency Resolution Process due to default in repayment of loans borrowed from various financial creditors. The Petition outlined the main objects of the Corporate Applicant, its nominal and paid-up capital, and the total outstanding debt amounting to &8377; 8,02,32,677. The debt was owed to banks, private lenders, and sundry creditors, with loans being unsecured and company cheques provided as security. The reasons for bankruptcy included blocked investments with Reliance JIO, Vihan Network Limited, and Himal Futuristic Communication Limited, as well as issues with vendors like Reliance JIO, VNL, and HFCL resulting in rejected works and financial losses. The Petition also highlighted the impact of intense competition, legal challenges, high debt levels, and losses on the Corporate Applicant's business and reputation. It mentioned the failure of investors to provide committed funds, affecting business opportunities with prospective customers. Financial stress and inaction from investors led to a complete stoppage of business, high debt levels, and negative business impact. Litigation matters involving Section 138 Negotiable Instruments Act cases and a case before the Debt Recovery Tribunal were also disclosed. The Counsel for the Corporate Applicant nominated an Insolvency Professional to act as the Interim Resolution Professional. Notices were sent to all financial creditors, with responses received only from Kotak Mahindra Bank and Capital First, who raised no objections to admitting the Petition. The Adjudicating Authority, after hearing both sides and considering the no objection from financial creditors, admitted the Petition under Section 10 of the IBC, 2016, declaring a moratorium. The moratorium included directions prohibiting suits or proceedings against the Corporate Debtor, ensuring the supply of essential goods or services, and appointing an Interim Resolution Professional. The order of moratorium was effective from 13.03.2019 until the completion of the Corporate Insolvency Resolution Process or liquidation approval. In conclusion, the Petition for Corporate Insolvency Resolution was admitted by the Tribunal, with the necessary directions and appointments made to facilitate the resolution process in accordance with the Insolvency and Bankruptcy Code, 2016.
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