2022 (6) TMI 1045 - 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 - time limitation - HELD THAT - It is a well settled law that the limitation period begins from the date when the cause of action arises. Hence, the cause of action arises on 16.12.2016, which is the date of default. Thus, the present petition is within limitation. It is observed from the records that CD has been given multiple opportunities to appear before this tribunal and plead his case including vide order dated 22-03-2022. In compliance of the order of this Tribunal dated 22-03-2022, FC had issued a notice to CD intimating the next date of hearing that is 02-05-2022 annexed as Exhibit B to Affidavit of Service (Pg 5). However, The CD chose not to appear and plead the case though the CD had filed his reply on record on 15-02-2020. Hence, the matter is taken on merits as is to be decided ex-parte. It is observed that there was debt, there was default and the petition has been filed within the period of limitation - the petition deserves admission. Petition admitted - moratorium declared.

Summary

Issues involved:
Initiation of Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code, 2016 (IBC) against a Corporate Debtor (CD) for non-payment of outstanding dues by the CD.

Detailed Analysis:

1. Factual Background and Jurisdiction:
The petition was filed by a Financial Creditor (FC) seeking to initiate CIRP against the CD for non-payment of dues. The CD was incorporated in Mumbai, falling under the jurisdiction of the Tribunal.

2. Debt Confirmation and Default:
The FC presented evidence including a promissory note, confirmation of accounts, and cheques issued by the CD towards repayment of the loan. However, the cheques were dishonored due to the account being closed, leading to a default situation.

3. Cause of Action and Limitation Period:
The cause of action was determined to have arisen on the date of default, which was within the limitation period. The petition was filed when an amount of Rs. 90,39,584 was due from the CD towards the loan and interest.

4. Legal Proceedings and Ex-Parte Decision:
Despite multiple opportunities given to the CD to present their case, including issuing notices and orders, the CD failed to appear for the proceedings. As a result, the matter was decided ex-parte based on the evidence and submissions on record.

5. Admission of the Petition and Moratorium Order:
The Tribunal admitted the petition under Section 7 of the IBC and imposed a moratorium under Section 14. The moratorium included restrictions on legal actions against the CD, disposal of assets, and enforcement of security interests.

6. Appointment of Interim Resolution Professional (IRP):
An IRP was appointed to manage the CIRP process, with specific functions and responsibilities outlined in accordance with the IBC and relevant regulations. The management of the CD during the CIRP period was vested in the IRP.

7. Financial Provisions and Communication:
The Financial Creditor was directed to deposit a sum for expenses related to public notices and inviting claims, subject to approval by the Committee of Creditors (CoC). The Registry was instructed to communicate the order to relevant parties promptly.

8. Compliance and Reporting Requirements:
Various compliance measures were outlined, including updating the Master Data of the CD with the Registrar of Companies and reporting back to the Tribunal within specified timelines.

In conclusion, the Tribunal admitted the petition, imposed a moratorium, appointed an IRP, and issued directives for the management and financial aspects of the CIRP process, ensuring compliance and communication among all involved parties.