2022 (3) TMI 863 - 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 - The registered office of corporate debtor is situated in Delhi and therefore, this Tribunal has jurisdiction to entertain and try this application. The application is complete which is filed in the proforma prescribed under Rule 4 (1) of the Insolvency and Bankruptcy (Application to Adjudicating Authority) Rules, 2016 read with Section 7 of the IBC. From the narration as above, we are satisfied that a default has occurred, and the debt has remained unpaid. Thus, the application warrants admission as it is complete in all aspects and is admitted, initiating CIRP as prescribed under the IBC. Application admitted - moratorium declared.

Summary

Issues:
Application under Section 7 of IBC for CIRP, moratorium, and appointment of IRP due to default in repayment.

Analysis:
The application was filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking Corporate Resolution Process (CIRP), moratorium declaration, and appointment of Interim Resolution Process (IRP) against the Corporate Debtor for defaulting in repayment of a substantial amount, including interest. The financial Creditor provided an unsecured demand loan to the Corporate Debtor, which led to the default. The Corporate Debtor confirmed the loan receipt and defaulted on interest payments, leading to the account being declared as a Non-performing Asset (NPA). The Petitioner sent a recall notice for debt repayment.

The Corporate Debtor contested the application, claiming that the loan documents were forged and unauthorized, challenging the authority of the Director who signed the MoU and addendum. The Corporate Debtor also argued that the claim was exaggerated and time-barred under the Limitation Act 1963. However, the Petitioner refuted these claims, asserting the legitimacy of the loan documents and the authority of the Director to sign on behalf of the Corporate Debtor.

The Tribunal found the application timely and within the limitation period, rejecting the Corporate Debtor's arguments regarding the loan documents and authorization of the Director. The Tribunal held that a default had occurred, and the debt remained unpaid, warranting admission of the application for initiating CIRP. The Tribunal appointed an Insolvency Resolution Professional and directed the commencement of the moratorium period as per the provisions of the IBC.

Moreover, the Tribunal ordered the Petitioner to deposit a specified sum with the Interim Resolution Professional for expenses and directed the registry to notify all relevant parties about the admission of the application. The Registrar of Companies was instructed to update the status of the Corporate Debtor accordingly. The judgment ensured compliance with the procedural requirements and safeguards under the IBC for the effective resolution of the insolvency matter.