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2022 (1) TMI 401 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Existence of dispute between parties - absence of grant of leave by this Tribunal while disposing of IA 1162/2019 - HELD THAT - Execution of this MOU besides part compliance of the terms of this MOU since not in dispute, the MOU indisputably binds both the parties. When the Corporate Debtor under the above MOU had categorically agreed that in the event of any default in payment of any instalment by the Corporate Debtor, the Operational Creditor is entitled to initiate both civil and criminal proceedings against the Corporate Debtor including the reopening of the CP(IB) No. 463/9/HDB/2018 before the NCLT or filing of the fresh CP as the case may be , the Corporate Debtor is precluded under law from contending that as under the order in IA 1162/2019 this Tribunal did not expressly grant leave to the Operational Creditor, the present application is not maintainable. It may be stated that once the MOU is made a part of the Order it does not matter whether leave, if any, is expressly granted or not. Since the Operational Creditor has satisfied this Tribunal as to the existence of default and has been ensured that the present application is complete and no disciplinary proceedings are pending against the Proposed Interim Resolution Professional (IRP), the application is liable to be admitted. Application admitted - moratorium declared.
Issues:
Initiation of Corporate Insolvency Resolution Process under Section 9 of the Insolvency and Bankruptcy Code, 2016 based on default by the Corporate Debtor in a Memorandum of Understanding (MOU). Analysis: 1. The Operational Creditor filed a petition seeking admission of the Petition, initiation of Corporate Insolvency Resolution Process, granting moratorium, and appointment of an Interim Resolution Professional against the Corporate Debtor. The Operational Creditor alleged that the Corporate Debtor defaulted on an amount, including principal and interest, as per the terms of the MOU dated 16.12.2019. 2. The petition was filed due to a breach of the MOU dated 16.12.2019 between the parties. The MOU allowed the Operational Creditor to initiate civil and criminal proceedings against the Corporate Debtor in case of default. A previous CIRP process initiated by the Operational Creditor was withdrawn, leading to the current petition. 3. The key issue was whether the present petition was maintainable without express leave granted by the Tribunal in a previous order. The Tribunal found that the debt and default by the Corporate Debtor were established, and the MOU was binding on both parties. The Tribunal clarified that once the MOU was made part of the order, the need for express leave did not affect the maintainability of the present application. 4. The Corporate Debtor argued that the Operational Creditor inflated the claim to fall under the Tribunal's jurisdiction. However, since the debt and default were already adjudicated in a previous proceeding, the Tribunal did not revisit this aspect. The Operational Creditor demonstrated the existence of default and the completeness of the application, leading to the admission of the petition. 5. The Tribunal admitted the petition under Section 9 of the IBC, 2016, declaring a moratorium and issuing specific directions regarding the prohibition of suits against the Corporate Debtor, protection of essential services, appointment of an Interim Resolution Professional, and initiation of the Corporate Insolvency Resolution Process. 6. The Tribunal appointed Mr. Ritesh Mittal as the Interim Resolution Professional and directed the immediate public announcement of the Corporate Insolvency Resolution Process. The Registry was instructed to inform the Registrar of Companies for updating the status of the Corporate Debtor accordingly. This detailed analysis of the judgment provides a comprehensive understanding of the legal issues involved and the Tribunal's decision in the matter.
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