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2019 (10) TMI 277 - Tri - Insolvency and BankruptcyAdmissibility of application - initiation of CIRP - Corporate Debtor defaulted in repaying the loan amount - existence of debt and dispute or not - HELD THAT - Since it is not the case of the Corporate Debtor that debt and default are not in existence and there being no settlement between the parties, this case is fit for admission whereby this Bench hereby admits this petition by appointing Mr. L.K. Sivaramakrishnan, as Interim Resolution Professional (IRP) looking at the consent by the IRP with directions - Petition admitted - moratorium declared.
Issues:
Initiation of Corporate Insolvency Resolution Process under Section 7 of the Insolvency & Bankruptcy Code, 2016 based on default in loan repayment. Detailed Analysis: 1. Default in Loan Repayment: The Financial Creditor filed a Company Petition seeking initiation of Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor for defaulting in repaying a loan amount of ?412,42,86,369 as of 09.10.2017. Despite continuous adjournments and promises by the Corporate Debtor to settle the debt, no substantial progress was made. 2. Loan Details and Assignments: The debt in question was assigned to the Petitioner by Central Bank of India, with various loans sanctioned for different projects. The Corporate Debtor had created charges and mortgages over its assets to secure the loans. The Petitioner provided evidence of part-payments made by the Corporate Debtor but highlighted the significant outstanding amount. 3. Existence of Debt and Default: The Petitioner presented documents and evidence to establish the existence of debt and default, including agreements and creation of charges over assets in favor of the Petitioner. The Corporate Debtor contended that proceedings before the Debt Recovery Tribunal (DRT) were pending and claimed an agreement for restructuring, which was disputed by the Petitioner. 4. Admission of Petition: The Tribunal, noting the absence of a settlement between the parties and the existence of debt and default, admitted the petition. An Interim Resolution Professional (IRP) was appointed, and a moratorium was declared to prohibit certain actions against the Corporate Debtor, ensuring the continuation of essential services during the process. 5. Resolution Process: The order of moratorium was set to be in effect until the completion of the corporate insolvency resolution process or until a resolution plan was approved. The public announcement of the corporate insolvency resolution process was mandated, and the IRP was directed to carry out functions as per the Insolvency & Bankruptcy Code. 6. Conclusion: The Tribunal admitted the petition, appointed an IRP, and imposed a moratorium to facilitate the resolution process, ensuring the protection of the interests of both the Financial Creditor and the Corporate Debtor. The decision aimed to address the default situation and initiate the necessary steps for resolving the financial distress faced by the Corporate Debtor.
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