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2022 (4) TMI 1164 - 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 - There is no reason to deny the Petition under section 7 filed by the Financial Creditor to initiate the CIRP against the Corporate Debtor as the Corporate Debtor himself has admitted its liability. On perusal of the documents submitted by the Applicant, it is clear that financial debt amounting to more than ₹ 1,00,000/- is due and payable by the Corporate Debtor to the Applicant. There is default by the Corporate Debtor in payment of debt amount. Therefore, there are no objection on record against the application filed for initiation of CIRP against the corporate debtor. Hence, the Application filed by the Financial Creditor is liable to be admitted. The application is complete and has been filed under the proper form. The debt amount is more than Rupees One Lakh and default of the Corporate Debtor has been established - application admitted - moratorium declared.
Issues Involved:
- Application under section 7 of Insolvency & Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process (CIRP). - Default amount claimed by the Financial Creditor against the Corporate Debtor. - Admissions and defenses presented by the Corporate Debtor. - Analysis of the evidence and arguments by the Tribunal. - Decision on the admission of the application and appointment of Interim Resolution Professional. - Declaration of moratorium and consequential directions. Issue 1: Application under section 7 of Insolvency & Bankruptcy Code, 2016 for initiating CIRP: The application (C.P. (IB) No. 4479/MB/C-IV/2019) was filed by Inventure Finance Private Limited, the Financial Creditor, against Mahabali Innovative Technologies Private Limited, the Corporate Debtor, seeking to initiate the Corporate Insolvency Resolution Process (CIRP) under section 7 of the I&B Code. The Financial Creditor claimed a total default amount of ?55,60,031, including principal and interest, with the Date of Default mentioned as 31.03.2018. The Financial Creditor provided details of the loan agreement, default, and subsequent communications demanding payment from the Corporate Debtor. Issue 2: Default amount claimed by the Financial Creditor against the Corporate Debtor: The Financial Creditor claimed a default amount of ?55,60,031 against the Corporate Debtor, including the principal amount of ?35,00,000 and interest of ?20,60,031. The Corporate Debtor admitted its liability and inability to pay the dues of the Financial Creditor. The Financial Creditor submitted evidence such as bank statements and ledger accounts to support the claim of default by the Corporate Debtor. Issue 3: Admissions and defenses presented by the Corporate Debtor: The Corporate Debtor, in its reply, admitted its financial difficulties and inability to repay the debts owed to both Financial Creditors and Operation Creditors. The Corporate Debtor detailed its business history, challenges faced, and steps taken to address financial distress, including initiating the Corporate Insolvency Resolution Process by filing a Section 10 Petition due to the inability to pay debts. The Corporate Debtor acknowledged the default and expressed its inability to repay the loan amounts. Issue 4: Analysis of the evidence and arguments by the Tribunal: After hearing the arguments of both parties and examining the records, the Tribunal found that the Corporate Debtor admitted its liability and inability to pay the dues. The Tribunal observed that the Financial Creditor's application under section 7 was valid as the debt amount was due and payable, with a clear default by the Corporate Debtor. The Tribunal concluded that there was no reason to deny the application for initiating CIRP against the Corporate Debtor based on the evidence and admissions presented. Issue 5: Decision on the admission of the application and appointment of Interim Resolution Professional: The Tribunal admitted the application filed by the Financial Creditor and declared a moratorium under Section 14 of the I&B Code. The Tribunal approved the appointment of Mr. Kairav Anil Trivedi as the Interim Resolution Professional to carry out the functions under the I&B Code. The Tribunal directed the Financial Creditor to deposit a sum for expenses related to issuing public notices and inviting claims, subject to approval by the Committee of Creditors. Issue 6: Declaration of moratorium and consequential directions: The Tribunal issued directions under the moratorium, prohibiting certain actions against the Corporate Debtor, ensuring the supply of essential goods or services, and specifying exceptions to the moratorium. The order of moratorium was to remain in effect until the completion of the corporate insolvency resolution process or liquidation. The Tribunal also instructed the Registry to communicate the order to relevant parties and authorities for compliance. This detailed analysis covers the key issues involved in the judgment delivered by the National Company Law Tribunal, Mumbai Bench, regarding the application under the Insolvency & Bankruptcy Code, 2016, and the subsequent admission of the application for initiating the Corporate Insolvency Resolution Process against the Corporate Debtor.
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