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2021 (4) TMI 1120 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate DEbtor failed to make repayment of its dues - Operational Creditor - existence of debt and dispute or not - HELD THAT - It is apparent from the record that parties have filed the consent terms dated 24.10.2019. However, Corporate Debtor failed to honor the said consent term and further expressed its inability to pay the said debt - This Adjudicating Authority is further satisfied that the Operational Creditor has proved its case by placing evidence that default has occurred for which the Corporate Debtor was liable to pay. The Operational Creditor has also placed on record of proof of sending notices to the Respondent/Corporate Debtor for their appearance and for making submissions also along with the requirements as stipulated under the provisions of the IB Code, 2016 for the purpose of initiating Corporate Insolvency Resolution Process. In these circumstances, having satisfied with the submissions made by the Petitioner/Operational Creditor, this Adjudicating Authority is inclined to admit the instant Application. Application admitted - moratorium declared.
Issues Involved:
Initiation of Corporate Insolvency Resolution Process under section 9 of the Insolvency and Bankruptcy Code, 2016 against a Corporate Debtor. Detailed Analysis: Issue 1: Filing of Company Application for CIRP The Company Application was filed by an Operational Creditor under section 9 of the Insolvency and Bankruptcy Code, 2016 against the Corporate Debtor for initiation of Corporate Insolvency Resolution Process. The Operational Creditor had issued a Demand Notice to the Corporate Debtor regarding unpaid Operational Debt, which the Corporate Debtor failed to pay within the stipulated time frame. Issue 2: Facts Leading to the Application The Operational Creditor, a South Korea based company, had assigned all rights and claims from an unpaid Operational Debt transaction to the Operational Creditor through a Letter of Assignment. The Corporate Debtor failed to pay the debt despite reminders and communication. The Operational Creditor issued a Demand Notice under section 8 of the Code, which was also not honored by the Corporate Debtor, leading to the application for initiation of CIRP. Issue 3: Hearing and Adjudication During the hearings, it was revealed that the matter was not settled between the parties, and the Corporate Debtor expressed its inability to pay the debt. The Adjudicating Authority found that the Operational Creditor had provided evidence of default and had followed the necessary procedures under the IB Code, 2016. Consequently, the Authority admitted the Company Application and ordered the commencement of the Corporate Insolvency Resolution Process. Issue 4: Appointment of IRP and Moratorium The Adjudicating Authority appointed an Insolvency Resolution Professional (IRP) and declared a moratorium on various actions against the Corporate Debtor, as per the provisions of the IB Code, 2016. The IRP was directed to take charge of the Corporate Debtor's management immediately and initiate necessary steps for the resolution process. Issue 5: Compliance and Directions The IRP was instructed to comply with specific sections of the Code and manage the affairs of the Corporate Debtor accordingly. Directors, Promoters, and other associated persons were directed to cooperate with the IRP. The Registry was tasked with communicating the orders to all relevant parties and updating the status of the Corporate Debtor with the Ministry of Corporate Affairs. This detailed analysis outlines the key aspects of the judgment, including the filing of the Company Application, facts leading to the application, adjudication process, appointment of IRP, declaration of moratorium, and compliance directives for the resolution process.
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