2019 (8) TMI 1141 - Tri - Insolvency and Bankruptcy

Maintainability of petition - initiation of Corporate Insolvency Resolution Process - Corporate Debtor failed to repay an amount - existence of Debt and Default - section 7 of Insolvency and Bankruptcy Code, 2016 - HELD THAT - When we have asked the Corporate Debtor counsel as to whether any defence is lying with the Corporate Debtor, he has not disputed the existence of debt and default. Since no defence has come from the Corporate Debtor side regarding existence of debt and default, we are of the considered view that it is a fit case for admission, whereby, this Bench hereby admits this Company Petition to initiate CIRP against the Corporate Debtor with the following directions by appointing Mr. R. Ragavendran as Interim Resolution Professional basing on the consent given by him. This Petition is admitted.

Summary

Issues Involved:
1. Application filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process due to non-repayment by Corporate Debtor to Financial Creditor.

Detailed Analysis:
1. The Financial Creditor, State Bank of India, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process against the Corporate Debtor for failing to repay an amount of ?149,36,46,297.17.
2. A consortium of Banks, led by State Bank of India, had granted financial assistance to the Corporate Debtor in the form of credit facilities amounting to ?159.94 crores, comprising various working capital limits.
3. The Financial Creditor submitted various documents executed by the Corporate Debtor, including Deeds of Hypothecation, Declarations, Undertakings, and Lenders Agent Agreement, confirming the creation of charge or mortgage over the secured assets.
4. Despite the issuance of legal notices and the account being declared as Non-Performing Asset (NPA), the Corporate Debtor failed to repay the outstanding dues, leading to the initiation of insolvency proceedings.
5. The Corporate Debtor did not dispute the existence of debt and default, and hence, the Tribunal admitted the Company Petition to initiate Corporate Insolvency Resolution Process against the Corporate Debtor.
6. The Tribunal declared a moratorium prohibiting various actions, appointed an Interim Resolution Professional, and directed the continuation of essential supplies to the Corporate Debtor during the moratorium period.
7. The moratorium was to be in effect until the completion of the insolvency resolution process, approval of a resolution plan, or liquidation of the Corporate Debtor, as per the provisions of the Insolvency and Bankruptcy Code, 2016.
8. The Tribunal directed immediate communication of the order to the Financial Creditor, Corporate Debtor, and the appointed Interim Resolution Professional via email, thereby admitting the petition and commencing the insolvency resolution process.