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2019 (11) TMI 445 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor defaulted in making repayment of loan - Section 7 of Insolvency and Bankruptcy Code, 2016 - HELD THAT - The banks give loans out of the money collected from depositors, share holders etc. The notional loss as pleaded by the Respondent is prima facie not tenable. The Ld. Counsel for the Petitioner has stated that credit facility of ₹ 2 Crore was not disbursed as the Respondent failed to fulfil the Terms of the sanction. Keeping in view the circumstances of the case, the Application of the Petitioner is admitted. Petition admitted - moratorium declared.
Issues:
1. Recovery of outstanding amount under Section 7 of Insolvency and Bankruptcy Code, 2016. 2. Counter claim by Respondent against Petitioner. 3. Admittance of Application and appointment of Interim Resolution Professional. 4. Implementation of moratorium under Section 14 of the Code. Issue 1: Recovery of outstanding amount under Section 7 of Insolvency and Bankruptcy Code, 2016 The Financial Creditor filed a petition seeking recovery of a total outstanding amount from the Corporate Debtor, including a Cash Credit and a Term Loan. The Corporate Debtor failed to maintain accounts as per agreed terms, leading to the account being declared as NPA. Despite repeated notices, the Corporate Debtor did not pay the outstanding amount. Issue 2: Counter claim by Respondent against Petitioner The Respondent argued a counter claim against the Petitioner, alleging that a loan applied for was not disbursed, resulting in a significant loss. The Respondent claimed a counter amount, including factors like loss of goodwill and profitability. However, the Petitioner contended that the notional loss claimed by the Respondent was not valid, as the credit facility was not disbursed due to the Respondent's failure to meet the terms of sanction. Issue 3: Admittance of Application and appointment of Interim Resolution Professional The Petitioner proposed an Interim Resolution Professional (IRP) for the case. The Application under Section 7 of the Code was admitted, and the moratorium provisions under Section 14 were set to come into effect. The IRP was appointed as per the proposal, and necessary communications were to be made to all relevant parties and authorities. Issue 4: Implementation of moratorium under Section 14 of the Code Upon the admission of the Application, the moratorium provisions under Section 14 were to be enforced, restricting actions like institution of suits, disposal of assets, and recovery of property against the Corporate Debtor. Essential supplies to the Corporate Debtor were to continue uninterrupted during the moratorium period, as specified. The moratorium would remain in effect until the completion of the Corporate Insolvency Resolution Process, subject to certain conditions mentioned in the Code. This detailed analysis covers the key issues addressed in the legal judgment delivered by the National Company Law Tribunal, New Delhi Bench-III, involving the recovery of outstanding amounts, counter claims, appointment of an IRP, and the implementation of moratorium provisions under the Insolvency and Bankruptcy Code, 2016.
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