2022 (6) TMI 1220 - 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 - Upon perusal of the records and documents annexed with the Petition, it is observed that the amount was disbursed to the Corporate Debtor and the default subsists. Thus, the amount is legally due and payable to the Corporate Debtor. The application made by the Financial Creditor is complete in all respects as required by law. It clearly shows that the Corporate Debtor is in default of a debt due and payable, and the default is in excess of minimum amount stipulated under section 4(1) of the IBC. Therefore, the debt and default stands established and there is no reason to deny the admission of the Petition. In view of this, this Adjudicating Authority admits this Petition and orders initiation of CIRP against the Corporate Debtor - Petition admitted - moratorium declared.

Issues:
- Initiation of Corporate Insolvency Resolution Process under section 7 of the Insolvency and Bankruptcy Code, 2016.
- Default in repayment of loan by the Corporate Debtor.
- Jurisdiction of the Adjudicating Authority.
- Completeness of the application by the Financial Creditor.
- Appointment of Interim Resolution Professional.
- Moratorium under section 14 of the IBC.

Initiation of Corporate Insolvency Resolution Process under section 7 of the Insolvency and Bankruptcy Code, 2016:
The Financial Creditor filed a Company Petition seeking to initiate Corporate Insolvency Resolution Process (CIRP) against the Corporate Debtor for defaulting on a Rupee Term Loan facility. The total amount claimed to be in default was Rs.10,41,74,783, with the default date stated as 01.04.2017. The Adjudicating Authority found that the amount disbursed to the Corporate Debtor was legally due and payable, leading to the admission of the Petition.

Default in repayment of loan by the Corporate Debtor:
The Financial Creditor provided detailed submissions, including documents like the Rupee Term Loan Facility agreement, Board Resolution, Demand promissory note, Deed of Guarantees, and Deed of Hypothecation, to establish the default by the Corporate Debtor. Despite failed attempts at service, the Corporate Debtor did not appear, leading to an ex-parte order against them.

Jurisdiction of the Adjudicating Authority:
The Corporate Debtor, being a public company limited by shares incorporated under the Companies Act, 1956, fell within the jurisdiction of the Adjudicating Authority. The Authority had the power to deal with the petition filed by the Financial Creditor based on this jurisdiction.

Completeness of the application by the Financial Creditor:
The application made by the Financial Creditor was deemed complete as per the requirements of the law. It demonstrated that the Corporate Debtor was in default of a debt due and payable, exceeding the minimum amount stipulated under section 4(1) of the IBC. This completeness led to the admission of the Petition by the Adjudicating Authority.

Appointment of Interim Resolution Professional:
The Financial Creditor proposed the name of Mr. Manoj Kulshrestha as the Interim Resolution Professional of the Corporate Debtor. Mr. Kulshrestha, having filed the necessary communication and certificate of registration, was appointed as the IRP to carry out the functions as per the IBC.

Moratorium under section 14 of the IBC:
Upon admitting the Petition, the Adjudicating Authority ordered a moratorium under section 14 of the IBC, which included restrictions on suits or proceedings against the Corporate Debtor, alienation of assets, enforcement of security interests, and more. The moratorium would be in effect until the completion of the CIRP or until a resolution plan was approved or liquidation ordered.

This detailed analysis of the judgment highlights the key issues involved and the comprehensive findings and orders made by the Adjudicating Authority in the case.

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