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2022 (6) TMI 385 - 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 letters which were issued by the Corporate Debtor to the Financial Creditor clearly highlight the existence of Debt due and Corporate Debtor s willingness to settle the same - It is clear from the records that the Corporate Debtor has time and again acknowledged the debt which was due and payable to the Financial Creditor. The corporate Debtor has admitted his liability. On perusal of the documents submitted by the Applicant, it is clear that financial debt amounting to more than Rs.1,00,00,000/- (Rupees One Crore Only) is due and payable by the Corporate Debtor to the Applicant. There is default by the Corporate Debtor in payment of debt amount. Therefore, we find that it is a fit case for initiation of CIRP against the Corporate Debtor, and that the petition is filed within the limitation period. This Tribunal has jurisdiction to adjudicate the Company Petition filed by the Financial Creditor and that there is a Debt due payable by the Corporate Debtor. Therefore, the Application filed by the Financial Creditor is liable to be admitted. Application admitted - moratorium declared.
Issues:
1. Application under Section 7 of the Insolvency & Bankruptcy Code, 2016 for initiating Corporate Insolvency Resolution Process (CIRP). 2. Default amount and date of default by the Corporate Debtor. 3. Security provided by the Corporate Debtor. 4. Financial Creditor's claims and actions. 5. Corporate Debtor's defense and counterclaims. 6. Admissions and submissions by both parties. 7. Tribunal's findings and observations. 8. Admission of the application and consequential orders. Analysis: Issue 1: Application under Section 7 of the Insolvency & Bankruptcy Code The application CP (IB) No.1442/MB/2020 was filed by a Financial Creditor against the Corporate Debtor under Section 7 of the I&B Code seeking initiation of the CIRP. The Financial Creditor claimed a total default amount of Rs. 3,87,20,058.79. Issue 2: Default amount and date of default The Financial Creditor detailed the default amount and date, with the total outstanding amount from the Corporate Debtor being Rs. 3,87,20,058.79 as of 30.11.2020. The Corporate Debtor's account was classified as an NPA on 31.03.2018 due to default. Issue 3: Security provided by the Corporate Debtor The Financial Creditor had secured cash credit facilities with various documents like Mortgage Deeds and Notices of Intimation of Mortgage. Despite the security, the Corporate Debtor continued to default. Issue 4: Financial Creditor's claims and actions The Financial Creditor took multiple actions to recover the outstanding amount, including sending notices and possession requests. The Corporate Debtor failed to remedy the default despite various approaches made by the Financial Creditor. Issue 5: Corporate Debtor's defense and counterclaims The Corporate Debtor claimed that it tried to settle the dues with the Financial Creditor but faced challenges due to the high-interest rates. They also highlighted attempts to settle the dues with another bank, which were allegedly obstructed by the Financial Creditor's inaction. Issue 6: Admissions and submissions by both parties Both parties submitted their written submissions, with the Corporate Debtor admitting its liability in certain instances. The Corporate Debtor also emphasized the need for a specific board resolution for initiating the CIRP. Issue 7: Tribunal's findings and observations The Tribunal found that the Corporate Debtor had acknowledged the debt and admitted liability. The default amount exceeded Rs. 1,00,00,000, justifying the initiation of CIRP. The Tribunal declared the application complete and admitted it, appointing an Interim Resolution Professional. Issue 8: Admission of the application and consequential orders The Tribunal admitted the application, declared a moratorium under Section 14 of the I&B Code, and issued directions regarding the prohibition of suits, asset transfers, and essential services supply. The order included the appointment of an Interim Resolution Professional and deposit requirements for expenses. This comprehensive analysis covers all the issues involved in the judgment, detailing the arguments, actions, and decisions made by the Tribunal in the case.
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