2022 (3) TMI 1265 - 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 evidence placed by the financial creditor is sufficient to ascertain the existence of a default on the part of the Corporate Debtor and same is admitted by the counsel of the corporate debtor during oral submission. The Financial Creditor has fulfilled all the requirements of law. Accordingly, this Adjudicating Authority is inclined to admit this application and initiate the process of CIRP of the Corporate Debtor. Application admitted - moratorium delcared.

Summary

Issues Involved:
Application under section 7 of IBC for initiating CIRP against the Corporate Debtor.

Detailed Analysis:

1. Default and Admittance by Corporate Debtor:
The Financial Creditor filed an application under section 7 of the IBC against the Corporate Debtor for initiating Corporate Insolvency Resolution Process (CIRP). The Corporate Debtor had availed a loan facility from the Bank, defaulted on repayments, and subsequently submitted a settlement proposal which it failed to fulfill. The Corporate Debtor admitted the default, and the Adjudicating Authority found the evidence presented sufficient to establish the default. The Financial Creditor fulfilled all legal requirements, leading to the admission of the application for initiating CIRP.

2. Appointment of IRP and Moratorium:
The Adjudicating Authority appointed a Resolution Professional proposed by the Financial Creditor to manage the Corporate Debtor's affairs during the CIRP. The appointed IRP was directed to take charge immediately, initiate the public announcement, and call for claim submissions. A moratorium was declared from the date of the order till the completion of CIRP, prohibiting various actions against the Corporate Debtor, including legal proceedings, asset transfers, enforcement of security interests, and recovery of property. Essential supplies to the Corporate Debtor were protected during the moratorium.

3. Compliance and Cooperation:
The IRP was instructed to comply with specific sections of the Insolvency and Bankruptcy Code (IBC). Directors, promoters, and management-associated individuals of the Corporate Debtor were mandated to provide assistance and cooperation to the IRP for the effective discharge of duties during the CIRP process. The Financial Creditor was directed to promptly communicate the order to the IRP and the Corporate Debtor for necessary actions.

4. Administrative Directives:
Administrative directives included sending a copy of the order to the Registrar of Companies for updating the Corporate Debtor's status, ensuring compliance with the IBC provisions. The order was pronounced through virtual hearing, emphasizing the procedural adherence and efficiency in handling the insolvency resolution proceedings.

This detailed analysis encapsulates the legal judgment's core aspects, encompassing the default admission, appointment of IRP, imposition of moratorium, compliance requirements, and administrative directives for effective CIRP initiation and management.