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2022 (7) TMI 829 - Tri - Insolvency and BankruptcyMaintainability 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 - Upon perusal of the records of the Reply by the Corporate Debtor, it is undisputed that the credit facility/loan was disbursed by the SBI to the Corporate Debtor and the Corporate Debtor defaulted in repayment of such debts. The account of the Corporate Debtor was declared as the NPA on 29 March, 2012. However, vide Assignment Agreement dated 18 July, 2014, the SBI assigned the debt to the Financial Creditor. Time Limitation - HELD THAT - As per the letter dated 20 April, 2022 from the Corporate Debtor to the Financial Creditor, it is apparent that the Corporate Debtor was very much aware of the assignments of debt to the Financial Creditor. In the said letter, the Corporate Debtor has categorically stated that the revised settlement amount was Rs.180 Lakhs, out of which the Corporate Debtor had paid Rs.27,00,000 to the SBI. Further, the assignment of debt of debt happened after the payment of Rs.27,00,000 to the SBI. Hence, the rest of the amount could not be deposited. However, the Corporate Debtor undertakes to pay the balance amount i.e., Rs.153 Lakhs - Further, from the Financial Statements for Financial years 2014-2015, 2015-2016, 2016-2017 and 2017-2018 of the Corporate Debtor it is clear that the Corporate Debtor has unconditionally acknowledged the debt. It is clear that the Financial Creditor has successfully satisfied this Adjudicating Authority of the existing debt and default - Application admitted - moratorium declared.
Issues Involved:
1. Maintainability and Limitation 2. Authorization to Represent Financial Creditor 3. Acknowledgment of Debt and Default 4. Assignment of Debt 5. Corporate Insolvency Resolution Process (CIRP) Initiation Issue-wise Detailed Analysis: 1. Maintainability and Limitation: The Corporate Debtor argued that the application is not maintainable and barred by limitation. The Tribunal, however, noted that the Corporate Debtor had acknowledged the debt multiple times, which extended the limitation period under Section 18 of the Limitation Act. The Tribunal referenced the Supreme Court's decision in *Laxmi Pat Surana v. Union Bank of India & Anr*, which clarified that acknowledgment of debt before the expiration of the limitation period renews the limitation. The Tribunal found that the application was within the extended limitation period. 2. Authorization to Represent Financial Creditor: The Corporate Debtor contended that the petition was filed by an unauthorized person. However, the Tribunal confirmed that the petition was filed by Mr. Ashis Vora, Chief Manager of Asset Reconstruction Company (India) Limited, who was duly authorized by a Power of Attorney dated 21 February 2018. 3. Acknowledgment of Debt and Default: The Tribunal observed that the Corporate Debtor had admitted its liability and defaulted on repayment. The account was declared as NPA on 29 March 2012. The Corporate Debtor had also acknowledged the debt in financial statements for the years 2014-2018 and through various correspondences, including a settlement proposal on 22 November 2017. 4. Assignment of Debt: The Tribunal noted that the State Bank of India (SBI) had assigned its debt to the Financial Creditor on 18 July 2014. The Corporate Debtor was informed about this assignment and had acknowledged the Financial Creditor as the assignee. The Tribunal found that the assignment was valid and the Financial Creditor had the right to initiate CIRP. 5. Corporate Insolvency Resolution Process (CIRP) Initiation: The Tribunal concluded that the Financial Creditor had successfully established the existence of debt and default. Consequently, the application under Section 7 of the Insolvency and Bankruptcy Code, 2016, was admitted. The Tribunal ordered the initiation of CIRP against the Corporate Debtor, imposed a moratorium under Section 14 of the Code, and appointed Mr. Soumitra Lahiri as the Interim Resolution Professional (IRP). Order: The Tribunal ordered the following: - Admission of the CIRP application. - Imposition of a moratorium. - Public announcement of the CIRP. - Appointment of Mr. Soumitra Lahiri as IRP. - Management of the Corporate Debtor to vest in the IRP. - Financial Creditor to deposit Rs.5,00,000/- for CIRP expenses. - Communication of the order to relevant parties and authorities. Conclusion: The Tribunal found that the Financial Creditor had established a case for initiating CIRP against the Corporate Debtor, overcoming objections related to maintainability, limitation, and authorization. The Tribunal ordered the commencement of CIRP, ensuring compliance with the Insolvency and Bankruptcy Code, 2016.
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