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2020 (10) TMI 911 - 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 - The Corporate Debtor has defaulted in making repayment of financial facilities/debt to the Petitioner and the date of default is from 10.04.2016 and onwards as per Annexure-IV/27 Colly. The Statement of accounts and the CIBIL Reports submitted by the applicant confirm the default committed by the Corporate Debtor. This Adjudicating Authority is satisfied that, (a) The Corporate Debtor availed Financial Facilities from the Petitioner. (b) Existence of debt is above Rs. One Lac; (c) Debt is due and defaulted. (d) Default has occurred on various dates starting from 10.04.2016 onwards as per Annexure IV/27 Colly. (e) Petition has been filed on 13.11.2017 i.e. within the limitation period. (f) Copy of the Application filed before the Tribunal has been sent to the Corporate Debtor and the application filed by the Petitioner under Section 7 of IBC is found to be complete for the purpose of initiation of Corporate Insolvency Resolution Process against the Corporate-Debtor-Company. Petition admitted - moratorium declared.
Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) 2. Allegations of fraudulent and malicious initiation of proceedings 3. Default in repayment of financial facilities 4. Appointment of Interim Resolution Professional (IRP) 5. Declaration of moratorium Issue-wise Detailed Analysis: 1. Initiation of Corporate Insolvency Resolution Process (CIRP): The Financial Creditor, BMW India Financial Services Private Limited, filed an I.B. Petition under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking the initiation of CIRP against the Corporate Debtor, Parsoli Motor Works Private Limited, for defaulting on financial facilities amounting to ?58,10,00,000 as of 31 October 2017. The petition was filed by a duly authorized officer, and the financial facilities included Floor Plan Financing, Spare Part Financing, and Working Capital Demand Credit Facility. 2. Allegations of Fraudulent and Malicious Initiation of Proceedings: The Corporate Debtor filed Interlocutory Application No. 300 of 2018, alleging that the CP (Insolvency and Bankruptcy) No. 161 of 2017 was a fraudulent and malicious initiation of proceedings by the Financial Creditor in collusion with BMW India Private Limited. The Corporate Debtor claimed that dealers from outside Gujarat were allowed to sell to customers in Gujarat, causing territory infringement. However, the Tribunal found no merit in these allegations, noting that customers are free to purchase vehicles from any dealer, and rejected the IA No. 300 of 2018. 3. Default in Repayment of Financial Facilities: The Corporate Debtor defaulted on various financial facilities provided by the Financial Creditor. The total amount in default as of 31 October 2017 was ?54,48,54,249.97, including principal and interest. The defaults occurred on various dates starting from 10.04.2016 onwards. The Corporate Debtor acknowledged the defaults in multiple communications and meetings but failed to make the necessary repayments. 4. Appointment of Interim Resolution Professional (IRP): The Tribunal appointed Mr. Anish Niranjan Nanavaty as the Interim Resolution Professional (IRP) as proposed by the Financial Creditor. The IRP was directed to make a public announcement of the moratorium and follow the relevant provisions of the Insolvency and Bankruptcy Code. 5. Declaration of Moratorium: The Tribunal declared a moratorium with effect from the date of the order, prohibiting the institution or continuation of suits or proceedings against the Corporate Debtor, transferring or disposing of assets, actions to enforce security interests, and recovery of property by owners or lessors. The moratorium will remain in effect until the completion of the CIRP. Judgment: The Tribunal found that: (a) The Corporate Debtor availed financial facilities from the Petitioner. (b) The existence of debt is above ?1 lakh. (c) The debt is due and defaulted. (d) The default occurred on various dates starting from 10.04.2016 onwards. (e) The petition was filed within the limitation period. (f) The application filed by the Petitioner under Section 7 of IBC is complete. The Tribunal admitted the IB Petition CP(IB) No. 161 of 2017 and directed the appointment of the IRP, declaration of moratorium, and adherence to the CIRP process. The Registry was instructed to communicate the order to relevant parties immediately.
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