2019 (10) TMI 623 - Tri - Insolvency and Bankruptcy

Maintainability of petition - initiation of CIRP - Fast Track Resolution of the Corporate Debtor - Default in repayment - HELD THAT - The Applicant has been able to successfully make out its case for Fast Track Resolution of the Corporate Debtor as per section 57(a) (b) of the Code. Application admitted.

Summary

Issues:
Admission of application under Sections 55-58 of the Insolvency and Bankruptcy Code, 2016 for Fast Track Insolvency Resolution Process.

Analysis:
The Financial Creditor filed an application against the Corporate Debtor under Sections 55-58 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of the Corporate Resolution Process. The Financial Creditor, a company incorporated in 1985, had sanctioned a loan of &8377; 110,00,00,000/- to the Corporate Debtor, a company incorporated in 2007. The loan agreement, demand promissory note, and financial statements were submitted as evidence of the default by the Corporate Debtor in repayment. Despite being directed to file a reply, the Corporate Debtor did not respond. An intervening application was filed alleging collusion, but it was later withdrawn. The Financial Creditor provided all relevant documents, and an affidavit confirmed the eligibility for Fast Track Insolvency Resolution Process due to the Corporate Debtor's asset value. No reply affidavit was filed by the Corporate Debtor.

The Tribunal considered the facts and documents presented by the Financial Creditor and found that a case for Fast Track Resolution of the Corporate Debtor had been successfully established under section 57(a) & (b) of the Code. Consequently, the Tribunal admitted the application and declared a moratorium, initiating the Corporate Insolvency Resolution Process. The appointed Interim Resolution Professional was tasked with public announcements, claims submission, and convening a Committee of Creditors. The moratorium prohibited various actions against the Corporate Debtor, and essential goods/services supply was protected. The order of moratorium would remain in effect until the completion of the resolution process or approval of a resolution plan. The Tribunal directed the Financial Creditor to deposit a specified amount in an ESCROW Account for preliminary expenses. The order was communicated to the relevant parties, and the application was admitted and disposed of, with a progress report filing scheduled for a future date.