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2020 (4) TMI 206 - 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 - Having gone through all the documents placed on record by the Financial Creditor, it is found that the Financial Creditor has been able to prove its case. The Ld. Counsel for the Financial Creditor has taken us through all the documents placed on record. It has been shown from the record that the recovery certificate to the tune of ₹ 4,02,64,296.75 was issued by the DRT, Ranchi in favour of the Financial Creditor on 17th May, 2017 in the O.A. No. 371 of 2015 filed on 20th July, 2015 after the date of NPA dated 23rd November, 2014. The Financial Creditor had pursued its legal rights and remedies without any delay and the present petition was filed on 2nd August, 2019. In view of the fact that the claim of the Financial Applicant have already been crystallised by DRT in its proceedings and the Recovery Certificate issued, followed by admission of the claim by the ld. Counsel appearing on behalf of the Corporate Debtor, we have no hesitation in admitting the petition and initiating Corporate Insolvency Resolution Process against the Corporate Debtor - application admitted - moratorium declared.
Issues:
Initiation of Corporate Insolvency Resolution Process under section 7 of the Insolvency & Bankruptcy Code based on default by the Corporate Debtor. Analysis: The judgment delivered by the National Company Law Tribunal, Kolkata Bench involved the application under section 7 of the Insolvency & Bankruptcy Code filed by the State Bank of India, the Financial Creditor, seeking initiation of Corporate Insolvency Resolution Process against M/s. Sri Bir Ispat Private Limited, the Corporate Debtor. The Financial Creditor had granted loans and credit facilities to the Corporate Debtor, who subsequently failed to comply with the terms and conditions of the agreements, leading to default. Despite multiple reminders and legal notices, the Corporate Debtor did not make the payments, resulting in the account being declared as Non-Performing Asset (NPA). The Financial Creditor pursued legal actions, including initiating proceedings before the Debts Recovery Tribunal, which issued a Recovery Certificate in favor of the Financial Creditor. The Financial Creditor submitted various documents to substantiate the default, including statements of accounts, AUCA Statements, CIBIL Report, and Balance Sheets of the Corporate Debtor. The Corporate Debtor, in response, disputed the allegations, claiming that the Financial Creditor had adjusted the sanctioned amount in another account without consent, leading to financial losses. The Corporate Debtor alleged high-handedness and mala fide intentions on the part of the Financial Creditor, stating that the claim was exorbitant and baseless. After hearing arguments from both parties, the Tribunal found that the Financial Creditor had proven its case, especially with the issuance of the Recovery Certificate by the DRT. The Corporate Debtor's counsel did not oppose the petition, and the claim was admitted by the Tribunal. Consequently, the Tribunal admitted the application, declared a moratorium under section 14 of the Insolvency & Bankruptcy Code, and appointed an Interim Resolution Professional to oversee the process. The Tribunal directed the IRP to convene a meeting of the Committee of Creditors and identify a prospective Resolution Applicant within a specified timeline. In conclusion, the judgment upheld the application for initiating Corporate Insolvency Resolution Process against the Corporate Debtor based on the default and non-compliance with loan agreements. The Tribunal's decision to declare a moratorium and appoint an Interim Resolution Professional aims to facilitate the resolution process and protect the interests of creditors and stakeholders involved in the insolvency proceedings.
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