2022 (7) TMI 201 - 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 - whether the present application is filed within limitation? - HELD THAT - It can be seen from the records that the date of default is 01.04.2019 and the present petition is filed vide Diary No. 01959 dated 24.12.2020. Therefore, the present petition is filed within limitation. Whether there is default in payment or not? - HELD THAT - In the present case, the occurrence of default is evidenced by the copy of the loan agreement and arbitration award and the same are attached as Annexure-A-5 and Annexure-A-7 respectively of the petition. The respondent-corporate debtor has also filed a reply wherein it has been admitted that there is default in respect of financial debt and amount mentioned in the petition is due towards the petitioner and shown its incapacity to pay the liability. The application filed in the prescribed Form No.1 is found to be complete. Another condition is that there are no disciplinary proceedings pending against proposed Resolution Professional. In the present case, in Part III of Form 1, Mr. Pawan Sharma has been proposed as Interim Resolution Professional. The present petition being complete and having established the default in payment of the Financial Debt for the default amount being above threshold limit, the petition is admitted in terms of Section 7(5) of the IBC. Moreso, the respondent has admitted the claim and expressed its inability to pay back the debt - Petition admitted - moratorium declared.

Issues:
1. Filing of petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process (CIRP).
2. Determination of default in payment and consideration of limitation period.
3. Appointment of Interim Resolution Professional (IRP) and verification of credentials.
4. Admission of petition, declaration of moratorium, and imposition of prohibitions.
5. Constitution of Committee of Creditors and directions to the IRP.
6. Direction for deposit by Financial Creditor and conclusion of Corporate Insolvency Resolution Process (CIRP).

Issue 1: Filing of petition under Section 7 for CIRP
The petition was filed under Section 7 of the Insolvency and Bankruptcy Code, 2016 by the Financial Creditor to initiate the Corporate Insolvency Resolution Process against the Corporate Debtor. The petition included necessary details such as the loan agreement, default in payment, and the request for initiation of CIRP.

Issue 2: Determination of default and limitation
The petition established the occurrence of default through the loan agreement and arbitration award. The Corporate Debtor admitted the default and expressed incapacity to pay the liability. The petition was found to be complete, filed within the limitation period, and the conditions for admission under Section 7(5)(a) were satisfied.

Issue 3: Appointment of Interim Resolution Professional
Mr. Pawan Sharma was proposed as the Interim Resolution Professional (IRP) in the petition. The credentials of Mr. Pawan Sharma were verified, and no adverse information was found. Therefore, Mr. Pawan Sharma was appointed as the IRP to undertake the necessary steps mandated under the Insolvency and Bankruptcy Code, 2016.

Issue 4: Admission of petition and declaration of moratorium
The petition was admitted as it established the default in payment of the Financial Debt, and the Corporate Debtor admitted the claim while expressing inability to repay the debt. Consequently, a moratorium was declared under Section 14 of the Code, imposing specific prohibitions to be followed by all parties involved.

Issue 5: Constitution of Committee of Creditors and directions to IRP
The Interim Resolution Professional was directed to collate all claims, determine the financial position of the Corporate Debtor, constitute a Committee of Creditors, and file reports to the Tribunal regularly. Additionally, the Financial Creditor was directed to deposit a sum with the IRP to cover expenses, subject to adjustment by the Committee of Creditors.

Issue 6: Deposit by Financial Creditor and conclusion of CIRP
The Financial Creditor was directed to deposit a specified amount with the Interim Resolution Professional to meet expenses. The petition was admitted, and all parties were directed to be informed accordingly. The Interim Resolution Professional was required to be provided with a copy of the order promptly.

This detailed analysis covers the legal judgment delivered by the National Company Law Tribunal, Chandigarh Bench, addressing various issues related to the filing of the petition, determination of default, appointment of the Interim Resolution Professional, admission of the petition, declaration of moratorium, constitution of the Committee of Creditors, and directions for the conclusion of the Corporate Insolvency Resolution Process.

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