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2022 (4) TMI 569 - 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 - The fact of disbursement of a sum of ₹ 40 Lakhs is not in dispute. It is also not in dispute that a sum of ₹ 60 Lakhs had to be paid after thirty months from the date of execution of the agreement between the parties on 25.05.2015, in case the Corporate Debtor failed to discharge its obligations thereunder. It is also noted that the Corporate Debtor has failed to provide the sale deed in terms of said agreement. A sum of ₹ 25 Lakhs has been acknowledged by the Financial Creditor to have been returned though the Corporate Debtor has claimed that a sum of ₹ 10 Lakhs have been paid back by the Corporate Debtor. However, no proof thereof has been brought on record to substantiate such claim - Be that as it may, even after taking into consideration said sum of ₹ 10 Lakhs, the amount claimed to be in default would remain more than ₹ 1 Lakh, considering both principal amount of ₹ 40 Lakhs given by the Financial Creditor or amount to be returned by the Corporate Debtor which was fixed at ₹ 60 Lakhs. Thus, this claim of the Corporate Debtor does not help the cause of the Corporate Debtor in any manner. In the reply the Corporate Debtor has not disputed the validity of the agreement dated 25.05.2015 and has merely taken pleas which is of commercial solvency of the Corporate Debtor or pressure tactic adopted by the Financial Creditor to extract maximum money, which are not relevant considerations as an application filed U/s. 7 of IBC, 2016 can be admitted once there is a debt which is due and payable and there occurred a default in repayment thereof. These conditions are satisfied in the present case. Application admitted - moratorium declared.
Issues:
1. Initiation of Corporate Insolvency Resolution Process under the Insolvency and Bankruptcy Code, 2016. Detailed Analysis: 1. The application was filed by a Financial Creditor seeking the initiation of Corporate Insolvency Resolution Process against a Corporate Debtor for defaulting on a payment agreement. The Financial Creditor provided a substantial amount to the Corporate Debtor, who failed to fulfill the agreement terms, leading to the default. The Financial Creditor claimed that despite partial repayments, a significant outstanding amount remained unpaid, justifying the initiation of insolvency proceedings. 2. The Corporate Debtor, in response, argued that it was a going concern and had executed sale deeds with other customers. However, the Financial Creditor alleged that the Corporate Debtor failed to return the due amount and that the company was not a going concern as claimed. The Corporate Debtor's defense included assertions of additional payments made, which were disputed by the Financial Creditor. 3. The Tribunal analyzed the submissions from both parties and the evidence on record. It found that the disbursement of funds and the terms of the agreement were not in dispute. The Corporate Debtor failed to provide the sale deed as per the agreement, and despite some repayments acknowledged by the Financial Creditor, a substantial default amount remained outstanding. The Tribunal emphasized that the validity of the agreement was not disputed by the Corporate Debtor, and arguments regarding commercial solvency or pressure tactics were deemed irrelevant for admitting the application under Section 7 of the Insolvency and Bankruptcy Code, 2016. 4. The Tribunal further noted that the proposed Interim Resolution Professional (IRP) met the necessary criteria, and there were no pending disciplinary proceedings against the IRP. Consequently, the Tribunal admitted the application, declared a moratorium, and appointed the IRP to oversee the Corporate Insolvency Resolution Process. The Tribunal issued specific directions regarding the moratorium, public announcement, and the role of the IRP, ensuring compliance with the Insolvency and Bankruptcy Code, 2016. 5. Additionally, the Tribunal directed the Financial Creditor to deposit a specified amount with the appointed IRP and set deadlines for various actions to be taken during the insolvency resolution process. The order was communicated to all relevant parties, and a progress report filing date was scheduled for monitoring the proceedings. The comprehensive order aimed to facilitate the resolution of the financial dispute between the Financial Creditor and the Corporate Debtor through the structured insolvency resolution process.
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