2020 (3) TMI 703 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - corporate debtor committed default in repayment of debt - existence of debt and dispute or not - HELD THAT - According to the Ld. Counsel for the financial creditor the loan sanction letter also issued to the corporate debtor on 23-11-2013 and to prove that produced Annexure F, to prove that the debt due to the financial creditor. The information utility certificate not at all produced however, produced statement of bank account. So also produced the Form 26AS of corporate debtor to show that TDS has been deducted which shows that the corporate debtor has deducted tax for the financial years 2013, 2014 and 2018 - The above said evidence led on the side of the financial creditor proves that the amount of ₹ 25,99,296.85 is due as claimed by the financial creditor and the corporate debtor does not dispute the liability and there is no challenge as to the confirmation of account relied upon by the financial creditor. Nothing shows that the claim is barred by limitation and being satisfied that there is no disciplinary proceedings pending against the proposed resolution professional. The application filed under section 7 of the Code is otherwise complete and it is liable to be admitted. Application admitted - moratorium declared.

Summary

Issues:
Application under Sec.7 of the Insolvency & Bankruptcy Code, 2016 for default in loan repayment.

Detailed Analysis:

1. Nature of Debt and Default:
The financial creditor filed an application under Sec.7 of the Insolvency & Bankruptcy Code, 2016 against the corporate debtor for defaulting in repayment of a loan amount of ?25,99,296.85 borrowed with interest. The loan was initially granted for 120 days and renewed till a later date upon verbal request by the corporate debtor.

2. Admission of Liability:
The corporate debtor did not dispute its liability regarding the loan and paid timely interest until a certain date. Despite issuing confirmations of accounts, the corporate debtor failed to pay the outstanding balance, leading to the application for initiating corporate insolvency resolution process.

3. Evidence Presented by Financial Creditor:
The financial creditor presented evidence including loan sanction letters, receipts, balance confirmation accounts, and bank statements to establish the debt due. The corporate debtor did not challenge the confirmation of accounts or the amount claimed by the financial creditor.

4. Adjudication and Order:
After hearing both sides and perusing the evidence, the Tribunal found the claim of the financial creditor to be valid and admitted the application under Sec.7 of the Code. A moratorium was declared, and an Interim Resolution Professional (IRP) was appointed to ascertain creditors' particulars and convene a Committee of Creditors for a resolution plan.

5. Further Directions and Compliance:
Various orders were issued, including the deposit of a sum in an escrow account, conducting the Corporate Insolvency Resolution Process (CIRP) in a time-bound manner, and communication of the order to all concerned parties. A progress report filing date was set, and certified copies of the order were to be issued upon compliance.

6. Conclusion:
The judgment detailed the process of admitting the application for insolvency resolution due to default in loan repayment, establishing the liability of the corporate debtor, and initiating the necessary steps for resolution under the Insolvency & Bankruptcy Code, 2016.