2019 (11) TMI 730 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor defaulted in repayment of amount - reliefs sought under Section 7(5)(a) and Section 13(l)(a)(b)(c) of the Code - existence of dispute or not - HELD THAT - The unsecured loan sanctioned by the applicant has been acknowledged by the respondent company from time to time. Record available is the acknowledgement of loan, interest accrued thereon and balance of the loan account, issued by the respondent company from 17.07.2011 to 05.04.2019. In the instant application, from the material placed on record by the Applicant, this Authority is satisfied that the Corporate Debtor committed default in paying the financial debt to the Applicant and the respondent company has acknowledged the debt - In the instant case, the documents produced by the Financial Creditor clearly establish the debt and there is default on the part of the Corporate Debtor in payment of the financial debt . There is existence of default and that the application under Section 7 (2) of the Code is also complete in all respect - the petitioner/financial creditor having fulfilled all the requirements of Section 7 of the Code, the instant petition deserves to be admitted - petition admitted - moratorium declared.

Issues involved:
1. Application under section 7 of The Insolvency and Bankruptcy Code, 2016 seeking reliefs under Section 7(5)(a) and Section 13(l)(a)(b)(c)
2. Default in payment of financial debt by the Corporate Debtor
3. Admission of liability by the Corporate Debtor
4. Appointment of an interim resolution professional
5. Declaration of moratorium

Analysis:
1. The applicant, a financial creditor, filed a petition under section 7 of The Insolvency and Bankruptcy Code, 2016 seeking reliefs under Section 7(5)(a) and Section 13(l)(a)(b)(c). The applicant provided details about both parties involved, highlighting the loan amount, interest rate, and the total payable amount by the respondent. The respondent company acknowledged the loan and interest accrued, with no dispute raised regarding the claim made by the financial creditor. The Tribunal found that the corporate debtor admitted and acknowledged the liability of the debt.

2. The Tribunal examined the documents submitted by the financial creditor and concluded that there was a default in payment of the financial debt by the Corporate Debtor. The Corporate Debtor had acknowledged the debt through letters of acknowledgement of debt/balance confirmation letters issued from time to time. The Tribunal found that the financial creditor had established the existence of default and completeness of the application under Section 7(2) of the Code.

3. The respondent company admitted the liability of the debt payable to the financial creditor towards the unsecured loan. The Tribunal noted that the respondent had filed an affidavit admitting the liability of the specified amount. The documents produced by the financial creditor clearly established the 'debt,' and the Corporate Debtor had defaulted in payment of the 'financial debt.'

4. The Tribunal appointed an interim resolution professional as per the application filed by the financial creditor. The prescribed fee was paid, and the Resolution Professional was appointed to act as an interim resolution professional. The Tribunal found the application to be complete in all respects and appointed the proposed Resolution Professional.

5. The Tribunal admitted the petition and declared a moratorium, prohibiting certain actions against the Corporate Debtor as per the provisions of Section 14 of the Code. The order of moratorium was to be effective from the date of receipt of the order till the completion of the corporate insolvency resolution process or until a resolution plan was approved or an order for liquidation was passed. The supply of goods and essential services to the Corporate Debtor was not to be terminated during the moratorium period. The order concluded the petition with no order as to costs and directed communication of the order to the relevant parties.

This detailed analysis covers the key issues addressed in the judgment, providing a comprehensive overview of the Tribunal's decision and the legal implications involved.

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