2021 (4) TMI 721 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors or not - existence of debt and dispute or not - HELD THAT - The application filed in the prescribed Form No. 1 is found to be complete. The present petition being complete and having established the default in payment of the Financial Debt for the default amount being above ₹ 1,00,000/-, the petition is admitted in terms of Section 7(5) of the IBC and accordingly, moratorium is declared in terms of Section 14 of the Code. Application admitted - moratorium declared.

Summary

Issues:
1. Jurisdiction of the Adjudicating Authority
2. Default in payment by the Corporate Debtor
3. Completeness of the application under Section 17 of the Insolvency and Bankruptcy Code, 2016
4. Appointment of Interim Resolution Professional (IRP)
5. Declaration of moratorium and its implications

Jurisdiction of the Adjudicating Authority:
The petition was filed under Section 17 of the Insolvency and Bankruptcy Code, 2016, seeking to initiate the Corporate Insolvency Resolution Process against the Corporate Debtor. The Corporate Debtor, a company incorporated under the Companies Act, 1956, falls within the jurisdiction of the Adjudicating Authority, the National Company Law Tribunal, Chandigarh Bench.

Default in payment by the Corporate Debtor:
The petition detailed the default by the Corporate Debtor, including dishonored cheques and a legal notice demanding repayment. The financial creditor provided evidence of default, such as cheque return memos, bank statements, and the legal notice, establishing the default in repayment of the debt by the Corporate Debtor.

Completeness of the application under Section 17 of the Insolvency and Bankruptcy Code, 2016:
The application filed in the prescribed Form No. 1 was found to be complete, meeting the requirements under Section 7(5)(a) of the Code. The Adjudicating Authority admitted the petition, declaring a moratorium under Section 14 of the Code due to the established default in payment by the Corporate Debtor.

Appointment of Interim Resolution Professional (IRP):
Mr. Vikas Garg was proposed as the Interim Resolution Professional (IRP) in the application. The Tribunal appointed Mr. Vikas Garg as the IRP, directing him to undertake necessary steps mandated under the IBC, specifically under Sections 15, 17, 18, 20, and 21 of the Insolvency and Bankruptcy Code, 2016.

Declaration of moratorium and its implications:
The Tribunal declared a moratorium under Section 14 of the Code, imposing various prohibitions on actions against the Corporate Debtor, including suits, asset transfers, and recovery proceedings. The moratorium would remain in effect until the completion of the corporate insolvency resolution process or until other specified events occur. The Interim Resolution Professional was directed to constitute a Committee of Creditors and provide regular progress reports to the Tribunal.

In conclusion, the judgment addressed the jurisdiction of the Adjudicating Authority, the default in payment by the Corporate Debtor, the completeness of the application under the Insolvency and Bankruptcy Code, the appointment of the Interim Resolution Professional, and the declaration of a moratorium with its associated implications. The Tribunal admitted the petition, appointed the IRP, and imposed restrictions during the moratorium period to facilitate the corporate insolvency resolution process effectively.