2022 (10) TMI 430 - Tri - Insolvency and Bankruptcy

Maintainability of petition - 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 03.05.2019 and the present petition is filed vide Diary No. 93 dated 06.01.2020. Therefore, the present petition is filed within limitation. Whether there is default in payment or not? - HELD THAT - It is observed from the record that in the present case, the default is evidenced by the copy of the loan agreement (Annexure-VI), promissory note (Annexure-VIII), three cheques issued by CD (Annexure-X), Cheque returning memo (Annexure-XI), ledger account (Annexure-XIV) are attached with the main petition. The respondent corporate debtor has been proceeded ex parte, thus, there is no rebuttal to the claim of petitioner. 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 the proposed Resolution Professional. In the present case, in Part III of Form 1, Mr. Satyendra 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. Accordingly, moratorium is declared in terms of Section 14 of the Code. Petition admitted - moratorium declared.

Issues:
1. Filing of the petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 by the Financial Creditor against the Corporate Debtor.
2. Determination of default in payment and completeness of the application.
3. Appointment of Interim Resolution Professional and declaration of moratorium.
4. Constitution of Committee of Creditors and deposit by Financial Creditor for expenses.

Analysis:
1. The petition was filed by the Financial Creditor under Section 7 of the Insolvency and Bankruptcy Code, 2016, seeking initiation of Corporate Insolvency Resolution Process against the Corporate Debtor. The petition was supported by relevant documents, including loan agreement, promissory notes, and cheques issued by the Corporate Debtor, establishing the default in payment.

2. The Tribunal examined the completeness of the application and found it in order. The Corporate Debtor failed to respond, leading to ex parte proceedings. The Tribunal confirmed the default in payment based on the evidence provided by the Financial Creditor, and there were no pending disciplinary proceedings against the proposed Resolution Professional.

3. The Tribunal appointed Mr. Satyendra Sharma as the Interim Resolution Professional after verifying his credentials. The Tribunal declared a moratorium under Section 14 of the Code, imposing various restrictions to protect the Corporate Debtor's assets and interests during the insolvency resolution process.

4. The Interim Resolution Professional was directed to constitute a Committee of Creditors, submit regular progress reports to the Tribunal, and manage the expenses related to the insolvency resolution process. The Financial Creditor was instructed to deposit a specified amount to cover the Interim Resolution Professional's initial expenses, subject to adjustment by the Committee of Creditors.

In conclusion, the Tribunal admitted the petition, declared a moratorium, appointed the Interim Resolution Professional, and outlined the necessary steps for the insolvency resolution process. The Financial Creditor's deposit for expenses and communication of the order to all relevant parties were also addressed in the judgment.

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