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2021 (5) TMI 640 - Tri - Companies LawMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and dispute or not - HELD THAT - The loan amount was duly disbursed to the Corporate Debtor and the documents of mortgage/guarantee/hypothecation were duly executed by the Corporate Debtor through their authorized representative. The requisites of an application under section 7 of IBC are available on record and duly proved. The date of default the account of the Corporate Debtor having been declared as NPA on 29th July 2017 is also proved, which is the date of default as per Annexure 'E' at page 61 of the petition. A submission was made on the date of hearing (22.02.2021), that time be granted for filing a detailed reply. The IBC does not envisage two stages of reply. An opportunity was afforded to the Corporate Debtor to file a reply, and it has done so. This is a petition pertaining to the year 2019 and it cannot be kept pending. It a fit case for admitting the petition, and for initiation of Corporate Insolvency Resolution Process in respect of the Corporate Debtor - petition admitted - moratorium declared.
Issues involved:
1. Application under section 7 of the Insolvency and Bankruptcy Code, 2016 for initiation of Corporate Insolvency Resolution Process. 2. Allegations of default and non-payment by the Corporate Debtor. 3. Submission of the Corporate Debtor claiming the application as an abuse of law. 4. Examination of documents and pleadings by the Tribunal. 5. Appointment of Interim Resolution Professional and initiation of the resolution process. Detailed Analysis: 1. The Tribunal received an application under section 7 of the Insolvency and Bankruptcy Code, 2016 from the Financial Creditor, seeking initiation of Corporate Insolvency Resolution Process against the Corporate Debtor. The Financial Creditor provided details of the loan amount sanctioned and the default amount owed by the Corporate Debtor, leading to the account being declared as Non-Performing Asset (NPA). 2. The Corporate Debtor, in response, claimed that the application was an abuse of law, alleging that the loan disbursement delays caused construction interruptions and financial difficulties. The Corporate Debtor also mentioned plans to appeal a judgment from the Debt Recovery Tribunal. However, the Tribunal found the reply to lack substance and valid grounds for non-payment. 3. Upon careful examination of the pleadings and documents submitted by both parties, the Tribunal concluded that the loan amount was disbursed to the Corporate Debtor as per records. The Tribunal also verified the date of default and the necessary requisites for an application under section 7 of the IBC, leading to the decision to admit the petition. 4. The Tribunal declared a moratorium and public announcement as per the provisions of the Insolvency and Bankruptcy Code, 2016. The moratorium prohibits various actions against the Corporate Debtor and ensures the continuation of essential goods and services during the resolution process. 5. Furthermore, the Tribunal appointed an Interim Resolution Professional (IRP) to manage the resolution process, convene the Committee of Creditors, and identify potential Resolution Applicants within the specified timeline. The Financial Creditor was directed to deposit a certain amount with the IRP for initial expenses, and the Registry was instructed to communicate the order to all relevant parties. This detailed analysis covers the key issues addressed in the judgment, providing a comprehensive overview of the Tribunal's decision and the subsequent steps to be taken in the Corporate Insolvency Resolution Process.
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