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2022 (3) TMI 755 - Tri - Insolvency and BankruptcyMaintainability 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 - In the lights of Judgement in the case of SWISS RIBBONS PVT. LTD. AND ANR. VERSUS UNION OF INDIA AND ORS. 2019 (1) TMI 1508 - SUPREME COURT wherein the Hon'ble Supreme Court held that in section 7 of the Petition when the debt and default is proved the Adjudicating Authority bound to admit the Petition. Unlike section 9 where the scope to look into, disputes which is necessary to be considered before admission of the Petition. In view of the above, the facts and present Petition reveals that the Corporate Debtor has admitted the debt and the same is due and payable. 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 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. Jurisdiction of the Tribunal to hear the Company Petition under section 7 of the Insolvency and Bankruptcy Code, 2016. 2. Admissibility of the Company Petition based on debt and default. 3. Appointment of Interim Resolution Professional and initiation of Corporate Insolvency Resolution Process (CIRP). 4. Moratorium under section 14 of the IBC and its implications. 5. Management of the Corporate Debtor during the CIRP period. 6. Financial obligations of the Financial Creditor towards the IRP for expenses. 7. Communication and compliance requirements post-order issuance. Jurisdiction of the Tribunal: The Tribunal established its jurisdiction to hear the Company Petition under section 7 of the Insolvency and Bankruptcy Code, 2016, filed by the Financial Creditor against the Corporate Debtor. The Corporate Debtor, a Public company, falls within the jurisdiction of the Tribunal as it was incorporated under the Companies Act, 1956, with its registered office in Mumbai. Admissibility of the Company Petition: The Financial Creditor presented evidence of debt and default by the Corporate Debtor, supported by a loan agreement and reminder notices. The Corporate Debtor acknowledged the liability but proposed a payment plan. Relying on the judgment in a relevant case, the Tribunal admitted the Petition as the debt and default were established, ordering the initiation of CIRP against the Corporate Debtor. Appointment of Interim Resolution Professional and CIRP Initiation: The Financial Creditor proposed an Interim Resolution Professional, complying with the necessary rules and regulations. The Tribunal approved the appointment and ordered the initiation of the Corporate Insolvency Resolution Process, entrusting the IRP with the management of the Corporate Debtor during the CIRP period. Moratorium and Implications: A moratorium was declared under section 14 of the IBC, impacting various actions related to the Corporate Debtor's assets and legal proceedings. Essential supplies were protected during this period, with exceptions as notified by the Central Government in consultation with sectoral regulators. Management of Corporate Debtor: During the CIRP period, the management of the Corporate Debtor was vested in the IRP, who was mandated to collect necessary information and documents from the Corporate Debtor's officers and managers promptly. Financial Obligations of the Financial Creditor: The Financial Creditor was directed to deposit a specified sum with the IRP to cover expenses related to public notices and claims, subject to approval by the Committee of Creditors. Communication and Compliance Requirements: The Registry was instructed to communicate the order to relevant parties promptly, and the IRP was directed to update the Registrar of Companies about the appointment. Compliance reports were expected within specific timelines to ensure procedural adherence post-order issuance.
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