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2019 (10) TMI 694 - Tri - Insolvency and BankruptcyMaintainability of application - Initiation of CIRP - Corporate Debtor defaulted in paying an amount - HELD THAT - Since the Corporate Debtor has not even repaid the amount ordered to be recovered from the debtor even after lapse of almost two years, the Financial Creditor has now filed this Company Petition u/s. 7 of the Code on 10.04.2019 for initiation of CERP against the Corporate Debtor for making a claim of ₹ 135,65,99,352 as on 31.03.2019. The Corporate Debtor has stated that they have already submitted One Time Settlement proposal to the Financial Creditor (State Bank of India) authorities, thereby, the Corporate Debtor needs time to remain waiting for answer from the Creditor Bank (State Bank of India) - this Bench being satisfied that the Financial Creditor has proved the existence of debt of ₹ 135,65,99,352 and default as on 31.03.2019 against this Corporate Debtor. The Financial Creditor has also filed consent letter in form-2 given by the Insolvency Resolution Professional, In view of the same, we hereby admit this Company Petition. Petition admitted - moratorium declared.
Issues:
1. Initiation of Corporate Insolvency Resolution Process under Section 7 of the Insolvency and Bankruptcy Code, 2016. 2. Default in payment by the Corporate Debtor leading to the application for CERP. 3. Admittance of the Company Petition by the Tribunal. 4. Appointment of Interim Resolution Professional and declaration of moratorium. Analysis: Issue 1: Initiation of Corporate Insolvency Resolution Process under Section 7 of the Insolvency and Bankruptcy Code, 2016 The Financial Creditor filed an Insolvency Bankruptcy Application under Section 7 of the Code against the Corporate Debtor for defaulting on a substantial amount. The Tribunal noted that the Financial Creditor had sanctioned various credit facilities to the Corporate Debtor, which eventually became non-performing assets (NPA) leading to debt recovery proceedings. Issue 2: Default in payment by the Corporate Debtor leading to the application for CERP Despite restructuring of the loan and debt recovery proceedings initiated by the Financial Creditor, the Corporate Debtor failed to repay the outstanding amount. The Financial Creditor filed the Company Petition under Section 7 of the Code for the initiation of Corporate Insolvency Resolution Process against the Corporate Debtor for a significant sum. Issue 3: Admittance of the Company Petition by the Tribunal After reviewing the application and submissions by both parties, the Tribunal found that the Financial Creditor had established the existence of debt and default by the Corporate Debtor. The Tribunal admitted the Company Petition and appointed an Interim Resolution Professional, directing the initiation of the insolvency resolution process. Issue 4: Appointment of Interim Resolution Professional and declaration of moratorium The Tribunal appointed Mr. Mathur Sabhapathy Viswanathan as the Interim Resolution Professional and declared a moratorium to prohibit certain actions against the Corporate Debtor. The moratorium included restrictions on legal proceedings, asset transfers, and recovery actions. Essential supplies to the Corporate Debtor were to continue uninterrupted during this period. In conclusion, the Tribunal admitted the Company Petition, appointed an Interim Resolution Professional, and declared a moratorium to facilitate the Corporate Insolvency Resolution Process against the Corporate Debtor.
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