2022 (7) TMI 1249 - 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 - The applicant clearly comes within the definition of Financial Creditor. The material placed on record as stated in the paras above further confirms that respondent has debt due and has committed default in repayment of the outstanding financial debt. On a perusal of Form-I filed under Section 7 of the Code read with Rule 4 of the Rules shows that the form is complete and there is no infirmity in the same. It is also seen that there is no disciplinary proceeding pending against the proposed Interim Resolution Professional - the present application is complete in all respect. The applicant financial creditor is entitled to move the application against the corporate debtor in view of admitted outstanding financial debt and default of the same by the corporate debtor. The default in repayment of the financial debt is not refuted by the Corporate Debtor. In terms of Section 7(5)(a) of the Code, the present application is hereby, admitted - Moratorium declared.

Summary

Issues:
- Application under Section 7 of the Insolvency and Bankruptcy Code, 2016 for Corporate Insolvency Resolution Process.
- Jurisdiction of the National Company Law Tribunal, New Delhi Bench.
- Financial facility availed by the corporate debtor and default in repayment.
- Appointment of Interim Resolution Professional.
- Documents submitted to prove the claim.
- Respondent's reply regarding reasons for non-payment.
- Admissibility of the application under Section 7.
- Declaration of moratorium and its implications.
- Duties and obligations of the Interim Resolution Professional.

Analysis:
- The application was filed under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process against the respondent company, a corporate debtor. The applicant, a financial creditor, claimed default in repayment of a substantial sum by the corporate debtor, supported by relevant documents such as loan agreements, bank statements, reminder letters, and legal notices.

- The Tribunal established its jurisdiction over the matter due to the registered office of the respondent corporate debtor being in New Delhi. The applicant's claim was based on a loan agreement, asserting a significant outstanding amount owed by the corporate debtor, which was not refuted by the respondent's submissions regarding market conditions and pending litigations affecting its operations.

- The Tribunal found the application complete and admissible under Section 7 of the Code, as the debt was proven to be due and default had occurred. The applicant was deemed a financial creditor, and the appointment of an Interim Resolution Professional was approved, ensuring compliance with all necessary regulations and disclosures.

- Upon admission of the application, the Tribunal declared a moratorium under Section 14 of the Code, prohibiting certain actions against the corporate debtor during the Corporate Insolvency Resolution Process. The Interim Resolution Professional was tasked with specific duties outlined in the Code, Rules, and Regulations, emphasizing the protection and preservation of the corporate debtor's assets.

- Additionally, the Tribunal directed the financial creditor to deposit a specified sum with the Interim Resolution Professional to cover expenses and comply with Resolution Process costs. The order was communicated to relevant parties promptly, ensuring transparency and adherence to legal obligations throughout the insolvency resolution proceedings.