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2022 (5) TMI 1023 - 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 Corporate Debtor has no substance in its pleas raised in the reply affidavit. The Corporate Debtor has clearly admitted its liability, the account was declared as an NPA because the Corporate Debtor failed and defaulted in repayment of its financial debt. The petition is otherwise complete in all respects - the petition under section 7 of the Code filed by the Financial Creditor deserves to be admitted - moratorium declared.
Issues Involved:
1. Initiation of Corporate Insolvency Resolution Process (CIRP) 2. Financial Creditor's claims and evidence 3. Corporate Debtor's defense and objections 4. Appointment of Interim Resolution Professional (IRP) 5. Declaration of moratorium and its implications Issue-wise Detailed Analysis: 1. Initiation of Corporate Insolvency Resolution Process (CIRP): The petition under section 7 of the Insolvency and Bankruptcy Code, 2016, was filed by the Financial Creditor (UCO Bank) for initiating the CIRP against the Corporate Debtor (M/s Bhumya Tea Company Private Limited). The petition was deemed complete, and the tribunal was satisfied with the grounds for initiation of the CIRP. 2. Financial Creditor's Claims and Evidence: The Financial Creditor provided detailed submissions, including: - The Corporate Debtor had availed credit facilities amounting to Rs. 48.30 crores, which were enhanced and renewed over time. - The Corporate Debtor executed security documents and acknowledged the debt through letters of confirmation. - The account was classified as a Non-Performing Asset (NPA) due to the Corporate Debtor's failure to repay the loan. - The Financial Creditor issued a notice under Section 13(2) of the SARFAESI Act, 2002, demanding repayment. - Despite a one-time settlement offer, the Corporate Debtor failed to repay the dues, leading to the outstanding amount of Rs. 57,57,15,416.13 as on 22.09.2020. 3. Corporate Debtor's Defense and Objections: The Corporate Debtor, in its reply affidavit, raised several objections: - The application was incomplete and did not mention the date of default. - Alleged suppression of material facts by the Financial Creditor. - Claimed lack of knowledge regarding the NPA declaration and absence of a hearing opportunity. - Argued that the outstanding amount was inflated and unreasonable. - Asserted that the application was premature and no default as per section 3(12) of the Code. 4. Appointment of Interim Resolution Professional (IRP): The Financial Creditor proposed Mr. Santanu Brahma as the IRP, who consented to the appointment. The tribunal confirmed his appointment, noting that no disciplinary proceedings were pending against him. The IRP was tasked with ascertaining the particulars of creditors and convening a Committee of Creditors (CoC). 5. Declaration of Moratorium and Its Implications: The tribunal declared a moratorium under Section 14 of the Insolvency & Bankruptcy Code, 2016, prohibiting: - Institution or continuation of suits or proceedings against the Corporate Debtor. - Transfer, encumbrance, or disposal of the Corporate Debtor's assets. - Actions to foreclose, recover, or enforce any security interest. - Recovery of property by owners or lessors. The moratorium would remain effective from the date of admission till the completion of the CIRP, ceasing upon approval of a resolution plan or liquidation order. Orders: - The petition under Section 7 was admitted, initiating the CIRP. - A moratorium was declared, and a public announcement was mandated. - Mr. Santanu Brahma was appointed as the IRP. - The Financial Creditor was directed to deposit Rs. 3,00,000 with the IRP. - The registry was instructed to communicate the order to relevant parties. - The matter was listed for a progress report on 25/05/2022. - Certified copies of the order were to be issued upon compliance with formalities. This comprehensive analysis captures the essence and legal terminology of the judgment while maintaining the privacy of the involved parties.
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