2022 (6) TMI 782 - Tri - Insolvency and Bankruptcy

Maintainability 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 case of the applicant precisely is that the corporate debtor had availed financial facility from the financial creditor, Remotebullion And Jewels Private Limited by way of loan agreement. The corporate debtor has agreed to repay the amount but the corporate debtor has defaulted in payment of the said loan. Therefore, as per part IV of the application it is claimed that a sum of Rs. 2,03,39,000/- is due and payable by the respondent company. Needless to say, that an application under Section 7 of the Code is maintainable if the debt is proved to be due and there is default. In view of the Section 4 of the Code, the moment default is of Rupees one hundred lakhs or more, an application to trigger Corporate Insolvency Resolution Process under the Code is maintainable - The applicant clearly comes within the definition of Financial Creditor. The material placed on record as stated in the paras above further confirms that respondent has debt due and has committed default in repayment of the outstanding financial debt. On a perusal of Form - I filed under Section 7 of the Code read with Rule 4 of the Rules shows that the form is complete and there is no infirmity in the same. It is also seen that there is no disciplinary proceeding pending against the proposed Interim Resolution Professional. The present application is complete in all respect. The applicant financial creditor is entitled to move the application against the corporate debtor in view of admitted outstanding financial debt and default of the same by the corporate debtor. The default in repayment of the financial debt is not refuted by the Corporate Debtor - Application admitted - moratorium declared.

Issues:
1. Application under Section 7 of the Insolvency and Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process.
2. Jurisdiction of the Adjudicating Authority.
3. Default in repayment of financial debt by the corporate debtor.
4. Appointment of Interim Resolution Professional.
5. Proof of debt and default.
6. Maintenance of application under Section 7 of the Code.
7. Admission of the application and declaration of moratorium.
8. Directions for the Interim Resolution Professional.

Analysis:

1. The applicant, Remotebullion and Jewels Private Limited, filed an application under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking the initiation of Corporate Insolvency Resolution Process against the respondent company, MHG Land Stockist Private Limited, due to default in repayment of a loan agreement.

2. The Tribunal established its territorial jurisdiction over the matter as the respondent company's registered office is in New Delhi, falling under the NCT of Delhi's jurisdiction as per Section 60 of the Code.

3. The applicant provided evidence of default, including financial statements, bank account statements, and a demand letter sent to the corporate debtor. The respondent failed to appear, leading to an ex-parte order against them.

4. An Interim Resolution Professional, Mr. Anil Tayal, was proposed by the applicant and appointed by the Tribunal in compliance with Section 7(3)(b) of the Code.

5. The Tribunal found the applicant to be a financial creditor with a due debt and default by the respondent, meeting the criteria for initiating the insolvency resolution process under Section 7 of the Code.

6. The completeness of the application, absence of infirmities, and compliance with necessary regulations led to the admission of the application under Section 7(5)(a) of the Code.

7. Following the admission, a moratorium was declared under Section 14 of the Code, imposing restrictions on certain transactions and ensuring the protection of the corporate debtor's assets during the resolution process.

8. Detailed directions were provided for the Interim Resolution Professional, emphasizing adherence to legal obligations, cooperation from involved parties, and the preservation of the corporate debtor's assets as per the provisions of the Code, Rules, and Regulations.

In conclusion, the Tribunal admitted the application, appointed an Interim Resolution Professional, declared a moratorium, and issued specific directives for the resolution process, ensuring compliance with the Insolvency and Bankruptcy Code, 2016.

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