2021 (8) TMI 14 - Tri - Insolvency and Bankruptcy

Maintainability 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 - This Bench is of the considered opinion that there is no dispute regarding the Corporate Debtor having availed the Loan facility from the Financial Creditor. The application made by the Financial Creditor is complete in all respects as required by law. It clearly shows that the Corporate Debtor is in default of a debt due and payable, and the default is in excess of minimum amount of one lakh rupees stipulated under section 4(1) of the IBC. Therefore, the debt and default stands established and there is no reason to deny the admission of the Petition. In view of this, this Adjudicating Authority admits this Petition and orders initiation of CIRP against the Corporate Debtor. Petition admitted - moratorium declared.

Issues:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) under section 7 of the Insolvency and Bankruptcy Code, 2016.
2. Default in repayment by the Corporate Debtor.
3. Admission of liability by the Corporate Debtor.
4. Appointment of Interim Resolution Professional.
5. Moratorium under section 14 of the IBC.
6. Duties and responsibilities during the CIRP period.
7. Financial obligations of the Financial Creditor.

Initiation of CIRP:
The Company Petition was filed by the Financial Creditor seeking to initiate CIRP against the Corporate Debtor under section 7 of the IBC. The Corporate Debtor had availed business loan facilities but defaulted on repayments, leading to the initiation of the insolvency resolution process.

Default in Repayment:
The Corporate Debtor breached the Loan Agreement by failing to make payments as per the repayment schedule, with a specific default date mentioned. The total amount due under the agreement was specified by the Financial Creditor, establishing the debt and default.

Admission of Liability:
The Corporate Debtor, through its counsel, admitted the liability and expressed inability to repay the debt due to the lack of ongoing business operations. This admission, along with the submissions made, confirmed the existence of the debt and default.

Appointment of Interim Resolution Professional:
The Financial Creditor proposed the name of an Interim Resolution Professional, who was duly registered and submitted the necessary documents. The Adjudicating Authority found the application complete and admitted the Petition, ordering the initiation of CIRP against the Corporate Debtor.

Moratorium and Duties During CIRP:
A moratorium was declared under section 14 of the IBC, affecting various actions related to the Corporate Debtor's assets and legal proceedings. The management of the Corporate Debtor was vested in the Interim Resolution Professional during the CIRP period, with specific responsibilities outlined for the officers and managers.

Financial Obligations:
The Financial Creditor was directed to deposit a specified sum with the Interim Resolution Professional to cover expenses related to issuing public notices and inviting claims. These expenses were subject to approval by the Committee of Creditors.

This comprehensive analysis of the judgment highlights the key issues addressed by the Tribunal, including the initiation of CIRP, default in repayment, admission of liability, appointment of the Interim Resolution Professional, moratorium provisions, duties during the CIRP period, and financial obligations of the Financial Creditor.

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