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2022 (5) TMI 991 - 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 applicant has submitted that Balance Sheet of the Corporate Debtor for the financial year 2018-19 at Annexure P22 (pages 195-287) shows acknowledgement of debt by the Corporate Debtor. On perusal of the same it is seen that at page 230 it is stated that the company has default in the repayment of dues of banks and the banks have filed suit before DRT for following dues including inter alia due of Rs. 34,82,63,123 to PNB, the Financial Creditor - Further the Financial Creditor has filed certificate alongwith Bank Statement under Section 2A of the Bankers' Books Evidence Act 1891 and containing the transactions relating to the account of Corporate Debtor from 01.01.2014 to 15.03.2020 which is evidence of default as per Section 7(3)(a) r/w. Regulation 2A of IBBI (Resolution Process for Corporate Persons) Regulation, 2016. Application admitted - moratorium declared.
Issues:
1. Application under section 7 of Insolvency and Bankruptcy Code, 2016 for declaring the Corporate Debtor as insolvent. 2. Allegations of debt default and non-repayment by the Corporate Debtor. 3. Examination of the acknowledgment of debt by the Corporate Debtor. 4. Consideration of the period of limitation for filing the application. 5. Appointment of Interim Resolution Professional (IRP) and initiation of Corporate Insolvency Resolution Process. 6. Implementation of moratorium and compliance with relevant provisions of the IBC, 2016. Analysis: 1. The application was filed under section 7 of the Insolvency and Bankruptcy Code, 2016 by the Financial Creditor, Punjab National Bank, seeking to declare the Corporate Debtor insolvent due to non-repayment of a substantial debt amounting to Rs. 96,59,24,446. The Corporate Debtor, engaged in the business of Gold & Diamond jewelry, was classified as a Non Performing Asset (NPA) in 2014 after failing to meet repayment obligations. 2. The Financial Creditor issued demand notices under the SARFAESI Act, 2002, but the Corporate Debtor failed to pay the outstanding debt, leading to the initiation of insolvency proceedings. The application highlighted the acknowledgment of debt by the Corporate Debtor in its balance sheet for the financial year 2018-19, extending the period of limitation under Section 18 of the Limitation Act, 1963. 3. The Corporate Debtor raised objections regarding the limitation period and the lack of specific details in the application related to debt disbursement and court orders. However, the Tribunal considered the acknowledgment of debt in the Corporate Debtor's balance sheet and the evidence of default presented by the Financial Creditor, leading to the admission of the application under Section 7 and the initiation of Corporate Insolvency Resolution Process against the Corporate Debtor. 4. The Tribunal appointed an Interim Resolution Professional (IRP) and directed the IRP to make a public announcement regarding the admission of the petition. The moratorium period under Section 14 of the IBC, 2016 was implemented, and the IRP was tasked with complying with various provisions of the Code, with the Directors and management of the Corporate Debtor required to cooperate with the IRP during the resolution process. 5. The Tribunal instructed the petitioner to deposit funds with the IRP to cover expenses, subject to adjustment by the Committee of Creditors. Additionally, the registry was directed to communicate the order to relevant parties promptly, ensuring compliance with procedural requirements and the effective commencement of the insolvency resolution process.
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