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2020 (3) TMI 918 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate debtor failed to make repayment of its debt - existence of debt and dispute or not - HELD THAT - Financial Creditor has proved existence of debt and default. Moreover, the Corporate Debtor (Developer) admitted and acknowledged an advance payment of ₹ 6,65,184 received from the Financial Creditor (Purchaser) vide para 2(i) of the construction agreement. But, the Corporate Debtor (Developer) had not adhered to the terms and conditions as per construction agreement and failed to handover the constructed apartment at Appur Village within the prescribed time. This Bench is inclined to admit this application - application admitted - moratorium declared.
Issues:
Insolvency and Bankruptcy Application u/s 7 of the Insolvency and Bankruptcy Code, 2016 for initiation of Corporate Insolvency Resolution Process (CIRP) against a Corporate Debtor. Analysis: The Financial Creditor filed an Insolvency and Bankruptcy Application under section 7 of the Insolvency and Bankruptcy Code, 2016 against the Corporate Debtor for defaulting in repayment. The Financial Creditor, a home buyer, claimed that the debt falls under the definition of Financial Debt as per the Code. The Construction Agreement between the Financial Creditor and the Corporate Debtor specified completion within 36 months. The Corporate Debtor admitted receiving an advance payment but failed to adhere to the agreement's terms by not delivering the constructed apartment within the agreed time frame. Despite several opportunities, the Corporate Debtor did not repay the dues, leading the Financial Creditor to approach the adjudicating authority. The Financial Creditor provided various documents to establish the debt and default, including the Construction Agreement, payment receipts, and the Corporate Debtor's financial statements. The Bench found that the Financial Creditor successfully proved the existence of debt and default. The Corporate Debtor's absence during multiple hearings indicated a lack of willingness to repay the outstanding dues. Consequently, the Bench decided to admit the Insolvency and Bankruptcy Application, appointing an Interim Resolution Professional (IRP) based on the Financial Creditor's consent to cover the IRP's remuneration and expenses until the constitution of the Committee of Creditors (CoC). The judgment included specific directions following the admission of the application. It declared a moratorium prohibiting certain actions against the Corporate Debtor, ensured the continuation of essential supplies, and specified the effect of the moratorium until the completion of the insolvency resolution process. Additionally, the judgment appointed a specific IRP and directed the Registry to communicate the order promptly to the relevant parties.
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