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2019 (1) TMI 1315 - Tri - Insolvency and BankruptcyCorporate insolvency process - debt due payable by the Corporate Debtor - Held that - Tribunal observes that there is a debt due payable by the Corporate Debtor and that a default has occurred for which the Corporate Debtor was responsible to pay. Therefore, we are of the opinion that the Applicant has established that the amount in default committed by the Corporate Debtor is a fact and it is supported by the documentary evidence placed before this Adjudicating Authority. Therefore, the instant petition is admitted and we order the commencement of the Corporate Insolvency Resolution Process which shall ordinarily get completed within 180 days, reckoning from the day this order is passed.
Issues Involved:
1. Validity of the debt and default by the Corporate Debtor. 2. Limitation period applicability. 3. Calculation and breakup of the claimed amount. 4. Appointment and eligibility of the Interim Resolution Professional (IRP). 5. Moratorium and its implications. Issue-wise Detailed Analysis: 1. Validity of the Debt and Default by the Corporate Debtor: The Tribunal considered a petition filed by the Financial Creditor (FC) against the Corporate Debtor (CD) under Section 7 of the Insolvency and Bankruptcy Code, 2016. The FC claimed that the CD had defaulted on various credit facilities totaling ?59.35 crores, which were renewed and enhanced over time. The account was declared a Non-Performing Asset (NPA) on 30.09.2015, with the total default amounting to ?73,08,54,170 as of 15.03.2018. The CD acknowledged the loan but disputed the default amount, claiming the FC had not provided a clear calculation. The Tribunal found sufficient documentary evidence supporting the FC's claim of default. 2. Limitation Period Applicability: The CD argued that many documents filed by the FC were beyond the three-year limitation period as per the Limitation Act, 1963. However, the Tribunal noted that the CD had executed a Revival Letter on 20.02.2016 and a Balance Confirmation on 22.02.2016, which acknowledged the debt and extended the limitation period. Additionally, the last payment was made by the CD on 14.11.2017, further establishing that the claim was within the limitation period. 3. Calculation and Breakup of the Claimed Amount: The CD contended that the FC had not provided a detailed breakup of the claimed amount. The FC refuted this, stating that a detailed statement of accounts was filed, and the figures matched the claimed amount. The Tribunal found that the FC had provided adequate documentation and that the CD had admitted its liability by securing the loan with immovable assets. The Tribunal dismissed the CD's arguments regarding excessive interest and charges, citing the CD's acknowledgment of liability in various documents. 4. Appointment and Eligibility of the Interim Resolution Professional (IRP): The CD raised concerns about the eligibility of the proposed IRP, Mr. R. Venkatakrishnan, under Section 29A of the Insolvency and Bankruptcy Code, 2016. The Tribunal found no disciplinary proceedings pending against the IRP and confirmed his eligibility. Mr. Venkatakrishnan was appointed as the IRP, with directions to take charge of the CD's management and make the necessary public announcements. 5. Moratorium and Its Implications: The Tribunal declared a moratorium effective from the date of the order until the completion of the Corporate Insolvency Resolution Process (CIRP). The moratorium prohibits: - The institution or continuation of suits or proceedings against the CD. - Transferring, encumbering, or disposing of any of the CD's assets. - Actions to foreclose, recover, or enforce any security interest. - Recovery of property occupied by the CD. The supply of essential goods or services to the CD shall not be terminated during the moratorium period. The IRP was directed to comply with relevant sections of the Code and to receive cooperation from the CD's management. Conclusion: The Tribunal admitted the petition, initiating the CIRP and appointing Mr. R. Venkatakrishnan as the IRP. The moratorium was declared, and the IRP was instructed to take immediate charge of the CD's management. The Tribunal directed the registry to communicate the order to all relevant parties.
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