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2021 (10) TMI 1184 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - Financial Creditors - existence of debt and default or not - time limitation - HELD THAT - There are force in the submissions made on behalf of the petitioner, since the respondent-corporate debtor failed to show any valid proof that the debt due and payable to the petitioner in his individual capacity is paid to him in his individual capacity. The facts of the case further shows that the CP is filed within the period of limitation. 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 allowed.
Issues:
1. Initiation of Corporate Insolvency Process under Section 7 of IBC 2. Jurisdiction of the Adjudicating Authority 3. Default in payment and debt amount 4. Appointment of Interim Resolution Professional 5. Declaration of moratorium and its implications Analysis: Issue 1: Initiation of Corporate Insolvency Process under Section 7 of IBC The petition was filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 by the Financial Creditor, seeking Corporate Insolvency Process against the Corporate Debtor. The Financial Creditor provided evidence of the unsecured loan advanced to the Corporate Debtor, including dishonored cheques and bank statements. Issue 2: Jurisdiction of the Adjudicating Authority The Corporate Debtor, a Limited Liability Partnership, fell within the jurisdiction of the Adjudicating Authority in Jaipur. The total obligation of contribution by the partnership was specified in the petition, establishing the Authority's jurisdiction over the matter. Issue 3: Default in payment and debt amount The Financial Creditor claimed a total debt amount, including the principal sum and interest, which the Corporate Debtor failed to repay. The Corporate Debtor disputed the amount due, alleging repayment to another entity. However, the Tribunal found no valid proof of repayment to the Financial Creditor, leading to the admission of the petition due to established default. Issue 4: Appointment of Interim Resolution Professional An Interim Resolution Professional was proposed in the petition, and the Tribunal appointed Mr. Prashant Sharma to fulfill the responsibilities under the IBC. The IRP was directed to take necessary steps as mandated under various sections of the IBC. Issue 5: Declaration of moratorium and its implications Upon admitting the petition and establishing default, the Tribunal declared a moratorium under Section 14 of the Code. Various prohibitions were imposed, including the institution of suits, asset disposal, and recovery actions. The moratorium was to remain in effect until the completion of the insolvency resolution process. In conclusion, the Tribunal admitted the petition, declared a moratorium, appointed an Interim Resolution Professional, and directed the IRP to constitute a Committee of Creditors and provide progress reports regularly. The judgment ensured compliance with the IBC provisions and safeguarded the interests of the parties involved in the insolvency process.
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