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2021 (3) TMI 473 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor is unable to pay its debt - existence of debt and dispute or not - application is filed by the competent person or not - documents filed by the Financial Creditor is having the common seal or not - Creditor-Debtor relationship between the Financial Creditor and Corporate Debtor or not. Whether the application is filed by the competent person? - HELD THAT - Smt. Maya C. is the Assistant Vice President/ Branch Head of the Financial Creditor has the proper authority to file the present application, and the objection raised by the counsel for the Corporate Debtor is merely incongruous, and therefore, holds no water - the contention will not stand now, and it is only to be rejected. Whether the documents filed by the Financial Creditor is having the common seal? - HELD THAT - This Tribunal verified original documents produced by the Financial Creditor in compliance with the order passed by this Tribunal dated 16.02.2021 and made sure that the documents alleged by the Corporate Debtor having the impressed seal of the Financial Creditor. Whether there is a Creditor-Debtor relationship between the Financial Creditor and Corporate Debtor herein? - HELD THAT - There is Creditor- Debtor relationship between them, since the Financial Creditor admitted that they received money from the Financial Creditor and the Corporate Debtor has no case that he has repaid the money received from the Financial Creditor - As there is a default in the payment of the financial debt, which has been confirmed by them in the counter affidavit that the Financial Creditor paid the money to the Corporate Debtor. This Tribunal is of the view that, the present application filed by the Financial Creditor is satisfies all the definitions of Financial Creditor , Default and Financial Debt and qualifies for filing an application under Insolvency and Bankruptcy Code. By making various technical snags the Corporate Debtor cannot wash its hands in repaying the amount borrowed which is a financial debt owed by them. Hence, there is a Creditor-Debtor relationship with them. This Tribunal is on the view that the application is filed in the capacity of a Financial Creditor for a Financial Debt of ₹ 6,39,13042/-, recoverable from the Corporate Debtor viz Platino Classic Motors (India) Pvt Ltd is a fit case for admission and initiation of CIRP against the Corporate Debtor. The documents produced on record prove the disbursement of various loan facilities granted by the Financial Creditor to the Corporate Debtor - Corporate Debtor committed default in repayment of the loan amount to the Financial Creditor, and hence its Loan account was declared as NPA. In the light of above facts and circumstances, the existence of debt and default is reasonably established by the Financial Creditor as a major constituent for admission of an application under Section 7(4) of the I B Code - Application under Sub-Section (4) of Section 7 of I B Code, 2016 is complete in all respects. Application admitted - moratorium declared.
Issues Involved:
1. Competency of the person filing the application. 2. Presence of the common seal on the documents filed by the Financial Creditor. 3. Existence of a Creditor-Debtor relationship between the Financial Creditor and Corporate Debtor. Issue-wise Detailed Analysis: 1. Competency of the person filing the application: The Corporate Debtor argued that the application was filed by an incompetent person, Maya C., who lacked specific authorization from the Financial Creditor's Board of Directors. The Tribunal found that Maya C., the Assistant Vice President/Branch Head of the Financial Creditor, had proper authority to file the application. This issue had already been decided by the Tribunal in IA/105/KOB/2020 and affirmed by the NCLAT, making the objection incongruous and without merit. Therefore, the contention was rejected. 2. Presence of the common seal on the documents filed by the Financial Creditor: The Corporate Debtor contended that the documents lacked the common seal, making them unenforceable. The Tribunal verified the original documents on 26.02.2021 and confirmed that they bore the impressed seal of the Financial Creditor. Thus, the documents were deemed compliant and the objection was dismissed. 3. Existence of a Creditor-Debtor relationship between the Financial Creditor and Corporate Debtor: The Corporate Debtor denied the existence of a Creditor-Debtor relationship, arguing that no valid financial debt existed due to the lack of proper documentation and authorization. However, the Tribunal found that the Corporate Debtor had admitted to receiving money from the Financial Creditor and had not repaid it. The documents provided by the Financial Creditor supported the existence of a financial debt. The Tribunal concluded that there was indeed a Creditor-Debtor relationship, and the Corporate Debtor's technical objections could not negate this fact. Findings and Order: The Tribunal determined that the application met all the criteria for a "Financial Creditor," "Default," and "Financial Debt" under the Insolvency and Bankruptcy Code. The Corporate Debtor's arguments were found to be technical snags that did not absolve it of its repayment obligations. Consequently, the application for initiating the Corporate Insolvency Resolution Process (CIRP) was admitted. Order Details: - The Tribunal declared a Moratorium under Section 14 of the Code, prohibiting the institution of suits, transferring assets, etc. - Mr. Sathiq Buhari was appointed as the Interim Resolution Professional (IRP). - The Financial Creditor was directed to deposit ?2,00,000 with the IRP for expenses. - The IRP was instructed to perform duties under Sections 15, 17, 18, 19, 20, and 21 of the IBC and submit progress reports. - The commencement of the CIRP was effective from the date of the order. - The management of the Corporate Debtor was vested in the IRP/RP during the CIRP period. - The Registry was directed to communicate the order to relevant parties and update the Master Data of the Corporate Debtor. Conclusion: The application IBA/25/KOB/2020 was admitted on 8th March 2021, initiating the Corporate Insolvency Resolution Process against the Corporate Debtor.
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