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2022 (5) TMI 802 - 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 - time limitation - HELD THAT - In the instant matter, the Corporate Debtor had time and again acknowledged the debt within limitation period in their financial statements for 2018-19 and again 2019-20 and their last offer letter of compromise/one time settlement for outstanding dues dated 30.08.2021 to the State Bank of India through their deputy general manager. Present application is filed on 02.11.2021, therefore, the present Application is within the period of limitation and not barred by law - The Registered Office of the Corporate Debtor is situated in Union Territory of Dadra Nagar Haveli and therefore this Adjudicating Authority has jurisdiction to entertain and try this Application. The present Application being complete in terms of Section 7(5) of the Code we admit the application and initiate Corporate Insolvency Resolution Process of the Corporate Debtor - Application admitted - moratorium declared.
Issues:
1. Application filed by Financial Creditor under Section 7 of the Insolvency and Bankruptcy Code, 2016 for initiation of Corporate Insolvency Resolution Process against Corporate Debtor. 2. Debt acknowledged by Corporate Debtor within limitation period. 3. Jurisdiction of Adjudicating Authority. 4. Appointment of Interim Resolution Professional. 5. Declaration of moratorium and its implications. 6. Directions for the Interim Resolution Professional. 7. Deposit of funds by Financial Creditor for expenses. 8. Duty of Interim Resolution Professional to protect and preserve the value of the Corporate Debtor's property. Analysis: 1. The Financial Creditor, a public sector banking and financial services body, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process against the Corporate Debtor, a company limited by shares. The debt owed by the Corporate Debtor to the Financial Creditor amounted to Rs. 147,54,94,853.59 as of 30.09.2021, with a default date before and after restructuring specified. 2. The Corporate Debtor admitted the debt claimed by the Financial Creditor, citing genuine financial difficulties due to the COVID-19 pandemic. The acknowledgment of debt was evident from the Corporate Debtor's financial statements for the financial years 2018-19 and 2019-20, along with a one-time settlement offer dated 30.08.2021. The application was filed within the limitation period, as per the timeline of events. 3. The Adjudicating Authority had jurisdiction to entertain and try the application as the Registered Office of the Corporate Debtor was located in a specific Union Territory. The acknowledgment of debt by the Corporate Debtor and the completeness of the application under Section 7(5) of the Code led to the admission of the application for initiating the Corporate Insolvency Resolution Process. 4. The Interim Resolution Professional, proposed by the Financial Creditor, was appointed by the Tribunal to oversee the Corporate Debtor's resolution process. The appointed professional was required to carry out various functions as mandated by the Code, ensuring cooperation from all relevant personnel associated with the Corporate Debtor. 5. A moratorium was declared following the admission of the application, prohibiting certain actions against the Corporate Debtor, including suits, asset transfers, and recovery of property. The moratorium was subject to specific provisions of the Code and was to remain in effect until the completion of the Corporate Insolvency Resolution Process. 6. The Interim Resolution Professional was directed to make a public announcement of the initiation of the Corporate Insolvency Resolution Process, inviting claims from stakeholders. Additionally, the Financial Creditor was instructed to deposit funds with the Interim Resolution Professional to cover expenses related to the resolution process. 7. The Interim Resolution Professional was obligated to safeguard the Corporate Debtor's property value and manage its operations as a going concern, in line with the requirements of the Insolvency and Bankruptcy Code, 2016. The Tribunal communicated its order to all relevant parties and regulatory bodies for compliance and record-keeping purposes.
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