2021 (7) TMI 1014 - Tri - Insolvency and Bankruptcy

Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its debt or not - disbursement of loan and its non-payment is proved by the documents placed on record - Financial Creditors - existence of debt and dispute or not - HELD THAT - Since the disbursement of the loan is proved vide Bank's statement of the Financial Creditor for the period 18/04/2016 to 29/03/2019, issued by the Bank of Maharashtra showing the disbursement of loan to the Corporate Debtor and the amount outstanding has been admitted by the Corporate Debtor vide its confirmation letter duly signed and sealed mentioned above, and since the admitted default of non payment of the outstanding amount is proved on the basis of documents placed on record by the Financial Creditor including various notices and reminders recalling the outstanding debt, the application of the Financial Creditor deserves to be admitted. There are no hesitation to order that the CIRP in respect of the Corporate Debtor be initiated - Petition admitted - moratorium declared.

Summary

Issues:
Initiation of Corporate Insolvency Resolution Process under Section 7 of the Insolvency and Bankruptcy Code, 2016.

Detailed Analysis:

1. Application for Initiation of CIRP:
The application under Section 7 of the Insolvency and Bankruptcy Code, 2016 was filed by M/s. Dhiraj Enterprises Private Limited seeking initiation of Corporate Insolvency Resolution Process against M/s. Janpragti Commodities Private Limited. The Financial Creditor claimed a due amount of ?74,97,874 along with interest, with the default occurring on 1st April, 2019. The Financial Creditor provided a statement of account due, in default, and date of default. The Corporate Debtor admitted the outstanding amount but cited economic recession and losses as reasons for non-repayment.

2. Defence and Counter-arguments:
The Corporate Debtor, in its Reply-Affidavit, disputed the claims stating economic challenges as the cause for non-repayment. The Financial Creditor, in the Rejoinder, argued that the Corporate Debtor's defense was vague and contradictory to its admission of the outstanding debt. The Financial Creditor presented documents including notices and reminders to support its claim.

3. Adjudication and Decision:
After reviewing all pleadings, annexures, and hearing both parties' counsels, the Tribunal found the case for initiation of CIRP against the Corporate Debtor to be valid. The Tribunal admitted the petition and ordered the initiation of CIRP against the Corporate Debtor. A moratorium was declared, and a public announcement was mandated in accordance with the relevant sections of the Insolvency and Bankruptcy Code, 2016.

4. Orders and Appointments:
The Tribunal appointed an Insolvency Resolution Professional and declared a moratorium on certain actions against the Corporate Debtor. Essential goods or services to the Corporate Debtor were protected during the moratorium period. The order specified the effect and duration of the moratorium, along with the appointment of an Interim Resolution Professional and the process for resolution plan submission.

5. Further Directions and Compliance:
The Financial Creditor was directed to deposit a specified amount with the appointed IRP, and the Registry was tasked with communicating the order to relevant parties. The matter was listed for a progress report filing, and provisions were made for the issuance of certified copies of the order upon application and compliance.

This detailed analysis summarizes the legal judgment involving the initiation of Corporate Insolvency Resolution Process under Section 7 of the Insolvency and Bankruptcy Code, 2016, highlighting the key arguments, decisions, and orders made by the Tribunal.