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2022 (6) TMI 1183 - Tri - Insolvency and BankruptcyMaintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - petition filed by Corporate Applicant for initiation of Corporate Insolvency Resolution Process (CIRP) against itself - section 10 of the Insolvency and Bankruptcy Code, 2016 - HELD THAT - There is no dispute from any quarter towards the fact that the debt is due and payable by the Corporate Applicant to various creditors and that the Corporate Applicant is unable to pay the same. The application is free from defects and complete in all aspects as required under the law. The Application shows that the Corporate Debtor is in default of a debt that is due and payable, and the default is more than the threshold amount as stipulated under section 4(1) of the Code at the relevant time. The default stands established and there is no reason to deny the admission of the present Application. In the light of the facts stated in the application and the evidence placed on record, this Adjudicating Authority admits this Application and orders initiation of CIRP against the Corporate Debtor - Application allowed.
Issues:
Initiation of Corporate Insolvency Resolution Process (CIRP) under section 10 of the Insolvency and Bankruptcy Code, 2016 by the Corporate Applicant against itself. Analysis: The judgment delivered by the National Company Law Tribunal, Kolkata Bench involved the initiation of Corporate Insolvency Resolution Process (CIRP) by a Corporate Applicant against itself under section 10 of the Insolvency and Bankruptcy Code, 2016. The Corporate Applicant, Kosons Forest Products Private Limited, filed the petition for CIRP due to financial difficulties, defaulting on payments to creditors, and facing operational challenges. The debt owed by the Corporate Applicant to Financial Creditors and Operational Creditors was detailed in the application. The Corporate Applicant had initially received support from the Government of India for setting up a bamboo-based manufacturing unit, which faced operational issues leading to financial losses and eventual closure. The reasons cited for initiating CIRP included defaulting on loan payments, being declared as a Non-Performing Asset (NPA), and receiving demand notices from relevant authorities. The application for CIRP was supported by necessary documents such as Memorandum and Articles of Association, financial statements, lists of creditors, and resolutions passed by shareholders. The Corporate Applicant proposed the name of an Interim Resolution Professional (IRP) for the process, and the proposed IRP had provided written consent. The Tribunal found that all requirements under section 10 of the Code were met, including the establishment of debt default, submission of books of accounts, and shareholder resolutions. The application was deemed complete and free from defects, leading to the admission of the petition for initiating CIRP against the Corporate Debtor. The Tribunal's order included the admission of the application for CIRP, imposition of a moratorium under section 14 of the IBC, appointment of the proposed IRP, transfer of management to the IRP during the CIRP period, and the requirement for the Corporate Applicant to pay initial costs to the IRP. Additionally, directions were given for communication of the order to relevant parties, submission of periodical reports by the IRP, and conducting the CIRP in a time-bound manner. The judgment set specific terms and conditions for the CIRP process, emphasizing compliance with regulations and timely reporting. The case was scheduled for a follow-up hearing to file the first periodical report, and provisions were made for issuing a certified copy of the order upon formalities' completion.
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